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Tesla and Fiat Chrysler have reached an agreement to help the automaker comply with stringent EU emissions regulations that are expected to come into force next year, according to a report released by the company. Financial Times. This one-of-a-kind deal is estimated by a Wall Street company to be worth more than $ 500 million worth of credit to Tesla by Fiat Chrysler over the next two to three years.
Jefferies on the @You're here @decree open pooling:
"We assume that the compensation paid to Tesla could exceed $ 500 million a year for 2020 and 2021, with payments possibly beginning earlier (2019) to spread the costs."
– Patrick McGee (@PatrickMcGee_) April 8, 2019
As of 2020, 95% of the emissions of the entire EU fleet in the EU must reach an average of less than 95g of CO2 per kilometer, ie an energy efficiency of around 57 mpg for internal combustion vehicles. By 2021, complete fleets must comply, and penalties could add to the financial ruin of companies unable to meet strict standards.
EU rules also allow different companies and divisions in the automotive sector to join together to form an enlarged fleet, allowing for an average of emissions over a larger number of vehicles. vehicles. Companies that already have reduced or zero emissions divisions can combine their higher emissions divisions to meet the standards. If the benefits outweigh the impractical provisions, they can also be associated with companies like Tesla, whose zero-emission all-electric fleets would deliver significant average emission reductions. .
Tesla offered its "open pool" contract to other automakers, but the Italian-American automaker was the only one to have reached an agreement by Tesla's March 25 deadline. Fiat Chrysler has been slower than its counterparts in the sector to adopt an electrification plan for its vehicles sold in the region and needed to gain more time until a strategy could be developed. The company has announced a $ 10.5 billion plan to provide an alternative source of energy for its vehicle lineup, but efforts in this direction will not translate into enough production vehicles to avoid Fines imposed by the EU before the imminent deadline.
According to EU rules, Tesla qualifies for "super credits" that allow a compromise between sales of electric cars and ICE vehicles. The company has already managed similar profitable credit operations in California, which generated $ 280 million in 2017. This figure may well be behind Jeffries Financial's estimated retail value of more than $ 500 million. Group. Overall, the pooling agreement appears to be a temporary win-win for both companies, and the deal would have been reached on Feb. 25.
Tesla has become a recognized leader in the development of zero-emission transportation. Since the release of its model S luxury sedan, the car's appeal has fueled both the company's growth – its fourth electric vehicle produced in series with a fifth en-route – and the new market demand for cars electric. Tesla's competitors have taken note and many have committed billions of dollars to electrify their fleets, even if European regulations are not imminent. For example, US-based automotive giant Ford Motor Company plans to invest $ 11 billion in 40 electrified vehicles by 2022, as announced at last year's Detroit auto show.
Overall, the "Tesla" effect on the global market has only begun and the beginning of the strict EU emission regulation could be the tip of the iceberg of the changes to come in the future. the many industries affected by the upcoming changes in the automotive field.
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