The notifications did not contain details of GM or FCA`s agreements with Tesla. But the deal shows the growing challenge automakers face in meeting U.S. fuel efficiency requirements. FCA plans to sell hybrid and electric vehicles in the future, but it is considered to be behind most other automakers in this part of the market. Weak sales of electric cars make it almost impossible to achieve EU targets without the Tesla agreement. Last spring, FCA reached a deal with Tesla that could cost FCA $1.8 billion by 2023. That`s about $150 million to $200 million a quarter and will restore Tesla`s profit margins from the first three months of this year, according to Ben Kallo, an analyst at Robert W. Baird and Co. The agreement for FCA is that pooling essentially “dilutes” the company`s emissions by integrating Tesla vehicles into the count. This allows CO2 exposure to be distributed across more vehicles, reducing the total emissions footprint, at least on paper. According to FCA, Tesla`s vehicles, along with the planned introduction of an electric Fiat 500 and plug-in hybrid versions of the Jeep Compass, Wrangler and Renegade, should help the company comply with emissions requirements in a timely manner. Although this is a bit of creative accounting for FCA, the agreement will circumvent a fine of 700 million euros for failing to achieve emission targets by 2021. Last August, we reported on an agreement between Fiat Chrysler Automobiles (FCA) and Tesla, which allowed the two companies to legally aggregate their CO2 emissions.
The agreement will help the ACF avoid the large fines imposed by the European Union on the car manufacturer due to the introduction of stricter pollution rules. Tesla also does not receive a crude agreement on the deal, since we now learn that FCA`s payments are effectively financing the construction of its much-anticipated new gigafactory outside Berlin. GM and Fiat Chrysler Automobiles announced earlier this year to the state of Delaware that they had entered into agreements to purchase federal greenhouse gas credits from electric car maker Tesla, Bloomberg reported. The move will prompt the Italian automaker to offset carbon dioxide emissions from its cars against teslas and reduce its average greenhouse gas emissions to an authorized level, as reported by the Financial Times, which first reported the deal. . Of course, the addition of emission-free vehicles, such as all-electric vehicles, can help significantly reduce the average, but Fiat Chrysler is seen as a backpost in the industry when it comes to bringing all-electric vehicles to market. “FCA is committed to reducing emissions from all of our products… The purchasing pool offers flexibility in the supply of products that our customers are willing to buy, while managing compliance with the cheapest approach,” FCA added in its statement. These loan sales agreements to automakers are certainly not the source of the money that Tesla CEO Elon Musk wants to promote, said Jon Gabrielsen, an economist and adviser to automakers.