FCA to pay Tesla to allow the EVs to be counted in its fleet

According to a media report, Fiat Chrysler Automobiles (FCA) will pay Tesla hundreds of millions of euros to allow the electric carmaker’s vehicles to be counted in its fleet to meet new EU emission norms.

FCA formed an open pool with Tesla on February 25, 2019. This will allow the Italian carmaker to bring down its average CO2 level with the help of Tesla’s electric cars to a permissible level.  The European Union (EU) will target an average of 95 gm / km of CO2 emissions from the next year. The 2018 average was 120.5 gm / km, while FCA averaged 123 gm / km.

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. While the rules also allow rival companies to form pools, there have been no pool agreements until now. Reports suggest that Toyota and Mazda are also likely to form an open pool.

It is also reported that Tesla generates significant revenue by selling EV credits in the US. In 2018 and 2017, the company earned US$ 103.4 million and US$ 279.7 million respectively by selling credits.

Source: Financial Times