Fiat Chrysler is planning to strike a deal with rival automaker Tesla in order to avoid paying EU emissions fine. Fiat will include Tesla EVs in its fleet, thereby decreasing the average emission amounts and helping the company remain beyond the reach of EU fines.
The EV revolution
Electric vehicles have slowly started catching the fancy of several car buyers who are finding the EVs to be as smart, sleek, and powerful as their regular combustion engine vehicle. With the entry of Tesla and its dynamic yet flamboyant CEO Elon Musk in the mix, the EV sector becomes a whole lot interesting. However, it is not just the EV revolution that automakers have to think about.
The auto sector is at the center of a huge controversy regarding emissions, and the EU is making sure that all manufacturers remain compliant to their emission standards. Pollution is a real problem, but automakers can’t suddenly make a shift to more environment-friendly options. Some automakers have gone the wrong way and faked emission reports, leading to massive recalls and public scandals.
Fiat Chrysler doesn’t want to get hit by emission standards, and that’s why it is teaming up with Tesla to avoid fines. Fiat will be using a provision by Tesla Motors under which other automakers can display Tesla cars and count them as their own fleet. Doing this could be helpful for Fiat, which will be able to reduce its average emissions. The EU will adopt stricter emission norms from 2020, where car manufacturers will have to cut down emissions from 123 grams per kilometer to 95 grams per kilometer.
Tesla makes money
Tesla’s cars are breaking records in European markets. Recently, it became the no. 1 bestselling car in the Netherlands, leaving other EVs behind by a huge margin. Its provision to allow other manufacturers to count Tesla cars as part of their own fleet also comes at a hefty price, and Musk’s company likes to revel in its riches. In 2018 alone, the company accrued about $103.4 million via the sale of zero-emission credit.
Regardless of the price, Fiat will have no other choice but to pay for reducing emissions as soon as possible. The carmaker hasn’t been able to move at the same pace at its peers when it comes to hybridizing or electrifying cars. It is expected that the American EV maker will gain hundreds of millions of euros.
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