Fiat Chrysler teams with Tesla to avoid European Union emissions fines

Fiat Chrysler teams with Tesla to avoid European Union emissions fines

The FCA Group (Fiat-Chrysler Automobiles) will pay out hundreds of millions to California-based EV manufacturer Tesla to help it meet European Union (EU) CO2 emissions standards taking effect in 2020.

A statement by the Italian-US firm confirmed a report in the Financial Times that FCA is paying Tesla, whose electric vehicles have no Carbon dioxide emissions. Furthermore, Tesla actually went so far as to offer the deals to "automakers who could use its important zero-emission fleet in Europe", indicating that Tesla is getting quite savvy regarding emissions legislation.

By 2021, manufacturers need to achieve an average fleet emissions figure of 95g/km or face a fine of 95 Euros multipled by their total volume for every gramme over target.

The agreement means FCA can count Tesla registrations alongside its Alfa Romeo, Jeep and Maserati sales, bringing down its average fleet emissions. This could put the brand in line for fines of up to two billion Euros (£1.72bn) by 2021, when the limits will be enforced. United States regulators now allow companies such as Tesla to sell their emission credits to other automotive manufacturers.

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FCA joined Tesla's so-called open pool on February 25, and according to a senior director at the Transport & Environment lobbying group the partnership will be valid for "several years".

Anyhow, the terms of the deal between Tesla and FCA have not been disclosed however nearly every industry media website reports that hundreds of millions have been paid out by FCA to Tesla. FCA now has only two popular EVs in its lineup: the puny Fiat 500e electric auto available only in the USA and the Chrysler Pacifica plug-in hybrid van. It will also develop new battery electric vehicles (BEVs) by 2022.

"The purchase pool provides flexibility to deliver products our customers are willing to buy while managing compliance with the lowest cost approach", it added. According to The Financial Times, Tesla sold $103.4 million ($145.3 million) credits in 2018 and $279.7 million ($393 million) in 2017.

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