Fiat Chrysler to pay Tesla to pool Carbon dioxide emissions, paper says

Mae Love
April 9, 2019

According to its latest report to the US Securities and Exchange Commission, Telsa made over US$1 billion in the past three years from simply selling its emission credits to other US-based automotive manufacturers.

It's rumored Fiat will pay the electric auto company in the order of hundreds of millions of dollars for the privilege.

Fiat Chrysler Automobiles (FCA) has formulated a deal with Californian electric carmaker Tesla that will help it dodge fines for high emissions that could be charged by the European Union under its strict emissions regulations.

Sources close to the move claim that Fiat Chrysler, under the deal, will pay for the priviledge to count Tesla's EVs as part of its fleet.

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It could also be a significant boost to Tesla's finances, pulling in a major fee for allowing its vehicles to be used to help meet one of its great rivals meet its production targets. In 2018, FCA's average was 123 grams, or about 2.5 grams above the industry average.

Tesla continues to sell Californian emissions credit to other automakers to bolster its bottom line.

The Italian carmaker formed an open pool with Tesla on February 25, the report added, citing a declaration with the European Commission.

The emission rules in Europe allow pooling of emissions internally, allowing carmakers like Volkswagen to offset Seat, Skoda and VW emissions against those from Porsche and Audi. FCA did not comment on the amount mentioned in the FT report but said in a statement to Reuters on April 7 that the purchase pool would allow it to deliver products its customers want while managing compliance. This being a very popular model for the manufacturer across the pond, it will allow FCA to reduce the average its fleet produces of Carbon dioxide per km below the 95-gram mark, thus making the company compliant with European norms for 2020.

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