Fiat Chrysler and Tesla have a deal where Tesla will sell carbon emission credits to Fiat Chrysler. The deal could be worth over $500 million to Tesla over 2 to 3 years. This will enable Fiat Chrysler to meet strict European vehicle emissions legislation.
Tesla qualifies for EU super-credits which allow a trade-off of electric car sales against ICE vehicles. Tesla has already sold $280 million dollars in 2017 in California.
Fiat Chrysler previously had an $8000 million fine in the USA for using software to falsely pass emission tests. Fiat Chrysler was looking at billions in EU fines without the Tesla deal.
Beginning in 2020, 95% of automotive fleet-wide emissions in the EU must average under 95g of CO2 per kilometer and have a fuel efficiency of about 57 mpg for internal combustion vehicles. In 2021, the vehicle full fleets must be compliant.
Fiat Chysler’s fleet is about 30 gram of CO2 per kilometer too polluting.
“We assume that compensation to Tesla could be in excess of $500m relating to 2020 and 2021 each with payments possibly starting earlier (2019) to spread costs”.
— Patrick McGee (@PatrickMcGee_) April 8, 2019
SOURCES- Wall Street Journal, Twitter
Written By Brian Wang, Nextbigfuture.com