Tesla signs an agreement with Fiat Chrysler to consolidate its fleet in accordance with EU emissions standards

Tesla signed a multi-hundreds-of-a-million dollar deal with Fiat Chrysler to consolidate their fleet in Europe to avoid fines related to issuance requirements.

The European Commission is putting in place an average CO2 emission requirement of 95 g per kilometer in the automakers' fleets next year.

This means that on average, vehicles sold by a builder throughout the year must not exceed 95 g per kilometer, otherwise they expose themselves to significant fines.

Of course, adding zero-emission vehicles, like all-electric vehicles, can help bring down the average significantly, but Fiat Chrysler is considered a latecomer to the sector when it's a big deal. is to market all-electric vehicles.

As in the case of the ZEV mandate in California, where late automakers in electric vehicle sales can buy credits from other excess manufacturers, the EU allows automakers to pool their fleet to avoid fines.

Tesla has sent an invitation to automakers who could use its large zero-emission fleet in Europe and, according to an update posted on the European Commission's website, Fiat Chrysler has accepted this offer.

Neither company has disclosed the financial results of the operation, but its value is estimated at hundreds of millions of euros.

Electrek's Take

Tesla's emission credit sales have been extremely useful in boosting its finances over the years, but their impact has been somewhat limited by the availability of credits and the small number of markets that implement them.

Now, this new system in Europe, which represents an important market for Tesla, should have a bigger impact.

This is also timely: Tesla would suffer from a significant lack of cash after a gloomy first quarter in 2019.

That said, Tesla should not expect this to last too long, as builders do not like to send money to their competitors.

Even though they have lagged behind the rest of the industry, Fiat Chrysler plans to build its own line of electric vehicles and will probably no longer need the Tesla fleet in a few years.

But that's exactly the purpose of these regulations. The more electric vehicles there are, the better.

Subscribe to Electrek on YouTube for exclusive videos and podcast