The Fiat Chrysler group will pool its fleet of cars with Tesla Motors in order to meet EU CO2 emission targets, the Financial Times reported on Sunday.
The loss-making American manufacturer of luxury electric vehicles will be paid hundreds of millions by the Italian group to avoid large EU fines for breaking environmental regulations. According to sector specialists, FIAT-Chrysler runs the highest risk of not meeting the target by 6.7 grammes of CO2 per kilometre.
EU regulations that kick in in 2020 mean that Fiat could face fines of up to €2 billion a year, Bloomberg reports. The cost of cooperating with Tesla runs in the hundreds of millions. The deal is unique in that this is the first time in Europe that manufacturers from different groups pool their fleets.
Pooling car fleets to avoid sanctions is quite common but often happens within manufacturing groups. For instance, Volkswagen offsets higher emissions by VW, SEAT, and Skoda with Porsche and Audi models. Mazda is also forming a common pool with Toyota; however, Toyota owns a 5% share in Mazda.
In 2018 Tesla generated $103.4 million by selling zero-emission vehicle credits in the US. Revenues fluctuate widely depending on when contracts are executed. FIAT-Chrysler is also said to be considering a more comprehensive deal with the French PSA group for a “super-platform.” The French group is considering acquiring a major stake in the Italian auto-maker over the next two years.