FCA To Pay Tesla 'Hundreds Of Millions’ In EU Emissions Fine Dodge
Fiat Chrysler Automobiles has agreed a deal to pay Tesla a nine-figure sum for the privilege of being able to use Tesla’s vehicles to lower FCA’s European fleet average, according to a report in the Financial Times. Forgive us for marvelling not just at the audacity of the move, but also at how it’s even legal.
In a deal said to be worth hundreds of millions of euros without Tesla really having to do anything other than some paperwork, all Model Ss, Xs and 3s sold in the EU will count towards FCA’s ‘pool’ of vehicles upon which its fleet average emissions are calculated.
In 2018 FCA’s fleet average emissions were 123g/km, thanks in part to higher-polluting models from the likes of Alfa Romeo, Jeep and Maserati. The legally-binding emissions average across a manufacturing group’s entire model range is 95g/km or less by between 2020 and 2021, and without help FCA simply won’t make it.
The thousands of Teslas now pouring into Europe should, FCA hopes, ensure that its figures are pulled down below that golden 95g/km in time. Failure to meet the threshold will trigger fines of €95 (£82) for every gram the target is missed by, for every car sold by the offending company in a preceding 12-month period.
In 2018 FCA sold just over a million cars in the EU, meaning that missing the targets by 10g/km could lead to fines totalling almost €958.5m. Miss them by 15g/km and it’s over €1.4bn. In that context, throwing a few hundred million at Tesla suddenly seems like a brilliant idea. We bet Tesla agrees.
Comments
It’s the result of years after years of FCA not bothering developing hybrid or electric cars. Doesn’t come as a surprise
They’re being smart. Why develop entirely new electric and hybrid systems when you could just buy the already existing and proven product.
Why should they?
Chrysler has a plug in hybrid version of the Pacifica, and the Ram V6 has a standard mild-hybrid system that does some neat work. They also had a hybrid SUV back in 2009, though it didn’t really make much of a difference in that application. It seems more like they’ve weighed the pros and cons from a business side, and it doesn’t make sense for them to be investing heavily in hybrid technology at this time.
Completely agree, about a year ago I was going to do a deep dive on FCA for a blog post (until I realized I bit off more than I could chew). There are plans to electrify part of their range but they are behind the ball. They are loosing out of first mover advantages and will require one of two things to bring these products into fruition. Either heavy research and development which will require significant investment and high initial cost or licensing of existing technology which will increase the cost per vehicle. It all comes down the late Sergio Marchionne’s beliefs that electrified cars just could not be profitable.
I’m fine with this
More fire breathing sports cars from FCA!
Agreed!
7.0L Dodge Challenger, anyone?
Or not
They might have paid out the development budget of their new RWD platform which they desperately need on many of their vehicle.
I though only vehicles produced by the company counted towards their emissions pool? As stated in the text, how is this even legal?
Because it hasn’t been made illegal yet
good lawyers
How can Tesla do this? Its not even part of the FCA
They use F1 loophole trickery for emissions now…isnt that what F1 was about? Tech that comes down the vehicular food chain…
Imo its good that they can “buy and sell this stuff
Overall pollution remains the same yet we can enjoy the glorious Maserati V8
They will turn Maserati into an EV-brand regardless…
This should be illegal. This is quite literally playing the law to your advantage.
Maybe they should simply sell off the dodge chrysler arm instead.
Worldwide emissions stay the same (as the FCA cars are still the same) yet they escape fines for not meeting targets because of a giant fudge.
money talks.
No problem with it.
Otherwise it’s communism
well, the money they pay to Tesla might give Tesla more financial boosts that can help them develop more EV in the future. which is also help save the environment eventhough FCA didn’t do it directly.
most people seem to miss this part.
My boy elon getting that dough
‘..In EU Emissions Fine DODGE’ - get it?
But seriously, I supose this is the most inventive and correct thing for FCA to do, since they couldn’t afford to develop hybrid wnd electric powertrains when they were rebranding
Hopefully they get on it though. Even if it’s a mild hybrid like the Ram 1500
isn’t the Aston Martin Cygnet have the similar goals like this
The Cygnet had a similar idea behind it, yes. That was under a different rule set, though.