Fiat Chrysler Plan To Avoid EU Emissions Fines By Paying Tesla

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It appears that environmental regulations can establish strange bedfellows as the Financial Times revealed that Fiat Chrysler Automobiles is set to pay Tesla hundreds of millions of euros to pool the cars of the EV brand with its own fleet and avoid the fines for violating the stricter emissions rules of the European Union in 2020. The specific numbers are not yet available as of the writing, however, it is assumed that the said move should help the FCA meet the CO2 emissions target of the European Union amounting to 95g per kilometre by reducing its average from a higher-than-usual 123g. Relatively, Fiat Chrysler has been considered to be slow to adopt electric and hybrid cars — the move then buys the company some time to catch up without having to take some radical steps, if necessary.

It was anticipated that many car makers would be pooling their own sub-brands together. For example, Volkswagen can use improving emissions with its regular brands in order to offset exotic brands such as Lamborghini and Porsche. However, this, along with a deal between Toyota and Mazda, is the first time that two wholly separate car firms have agreed to pool their emissions in Europe. It also reveals the pressure on firms to electrify their lineups.

This sort of deal is not completely unusual for Tesla. Last year alone, it was able to make $103.4 million by selling zero-emissions credits, and it made approximately $279.7 million the year before that. The pact of the European Union could significantly pad the bottom line of Tesla, though, and it is coming at a good time. The sales of Tesla plunged sharply early this year as reduced the EV tax credits and the typical early-year slowdown took their toll. While the firm is not facing a crisis, it probably would not mind an influx of cash while it attempts to improve sales and prepare for future cars such as the Model Y.