Photo by SCREEN POST
In a deal worth "hundreds of millions of euros", Italian-American car manufacturer Fiat Chrysler is pooling its car fleet with Tesla in a bid to avoid large fines from the European Union according to a report by the Financial Times.
By pooling their fleets, Tesla's electric cars will be counted as part of Fiat's fleet of vehicles when it comes to CO2 emission measurements, thereby allowing Fiat to meet strict EU emission targets due to come into force next year.
Under the new EU rules, any manufacturer's car fleet must not exceed an average of 95 grams of CO2 per kilometre. If the average exceeds that amount, the company has to pay excess emissions premiums for each car registered. The fines start at €5 for the first extra g/km to €25 for the third g/km and €95 for each subsequent g/km.
Pooling fleets is allowed under the EU rules.
Fiat Chrysler has announced it is planning to add more hybrid and electric cars to its roster. Analysts have speculated however that this is not enough. Last year, the company's average was estimated at 123 g/km, making it one of the worst emitters in the industry.
Tesla has been selling emissions credits in the US where rules allow zero-emission vehicles to earn credits. These credits can then be sold on as excess to other manufacturers. The company has made more than $1-billion since 2016 by selling its emissions credits, which also allows it to post quarterly profits.
In a statement, Fiat Chrysler said that the company "is committed to reducing emissions of all our products."
"The purchase pool provides flexibility to deliver products our customers are willing to buy while managing compliance with the lowest cost approach," it added.
Back to Homepage
Back to Transportation