Fiat Chrysler is teaming with Tesla to avoid stiff penalties in Europe for failing to meet emissions guidelines.
FCA isn’t really in the business of efficient fuel management. They make trucks, SUVs, and loud muscle cars that love turning gas into burnt rubber and noise. They also make a lot of carbon emissions, which in today’s climate environment, is becoming a financial burden.
Last December, the NHTSA released a report that essentially said that Fiat Chrysler paid $77 million in fines last year for failing to meet emissions guidelines. Next year, the fine could be as much as $1.2 billion. That’s a lot.
In Europe it’s not much better, but rather than paying European regulators millions of dollars for making fuel inefficient cars, they’ve decided to pool their emissions with Tesla and just pay them instead.
According to a new report from the Financial Times, FCA will pay Tesla "hundreds of millions of euros" to offset their carbon emissions with Tesla’s zero-emissions fleet of electric vehicles. What this does is essentially pools the two fleets together and brings down the average carbon emissions so that they collectively meet EU regulations.
It’s unknown just how much Tesla is being paid, but selling carbon offsets has been a part of their financial strategy for some time. Last year, Tesla received $100 million in carbon offset payments, while the year before it was closer to $300 million.
As part of EU’s carbon regulations, Tesla created an open pool on February 25th and invited fossil-fuel-burning carmakers to pay them to offset their carbon emissions. FCA jumped at the chance since paying off Tesla would be a lot cheaper than paying the EU’s fines.
According to Julia Poliscanova, a senior director at the Transport & Environment lobbying group, the agreement would be valid for several years so that FCA can enjoy some comparatively low fines as they get started on making their fleet into hybrids.
Toyota and Mazda also reportedly opened up their fleets for carbon pooling, but they don’t offer nearly as much offset as Tesla does with its entire fleet of electric vehicles.