Fiat Chrysler to pay Tesla for Carbon dioxide emissions credits

Irving Hamilton
April 9, 2019

In a rather creative way to raise money, Tesla has "opened up its pool (fleet)" so that any automaker can join its "open pool" and count their vehicles alongside Tesla's to offset its potential for fines. Who's dirtier for having done this deal? Under this option, it will be able to pool its fleets together with Tesla's to meet the targets.

Renowned auto giant, Fiat Chrysler (FCA) recently announced that it has agreed on a deal with US electric automaker Tesla, pool their fleet together in Europe in a bid to avoid paying fines for violating the European Union's new emissions rules.

There is no indication of the specific amount that FCA has agreed to pay Tesla. The Financial Times, which revealed the deal with Fiat Chrysler, said it could be worth hundreds of millions of Euros.

To meet the strict emissions standards, the rules allow carmakers to pool models within their own groups, or form "open pools" with other carmakers.

The practice is not without controversy, as it allows automakers to continue producing high-emissions vehicles while meeting standards set by the authorities.

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It will effectively sell the credits from its zero emissions vehicles to other auto makers who have been slow to respond to the new standards. FCA is now readying the second-generation Fiat 500 2.0 for the European market, and it has confirmed that the model would be powered entirely by electricity.

Current regulations in the US allow the company to earn credits for producing zero-emission vehicles and sell any extra credits to a rival automaker. This has significantly helped the company increase its revenue and avert possible losses.

Toyota and Mazda have also applied to the European Union to form an emissions pool, as have Citroen, Peugeot, and Opel.

Fiat recently released a statement in response to reports of the deal and mentioned that it was simply finding the most optimal way to comply with the EU's regulations.

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