But this is, obviously, not a solid long-term plan.
With the European Union set to tighten its emissions regulations significantly in the coming years, carmakers like Fiat-Chrysler may be caught in the lurch. As a firm that’s kept its focus on North America, they make their money selling large, fuel-guzzling machines that just don’t sit well in Europe. And as a result, their fleet-wide CO2 figures are rather unhealthy and so to combat it, they’re sort of ‘cheating.’
No no, not cheating like Volkswagen. What they’re going to do is tap Tesla for their CO2 credits, given that all of their cars have no exhaust pipes, and pay them handsomely to dodge EU fines. We’re made to understand that the fines that FCA would have to pay would amount to some billions of Euros, and so the “hundreds of millions of Euros” that Tesla will receive by selling their CO2 credits to FCA works out to a pretty alright bargain.
The EU wants carmakers to achieve an average CO2 emission level of just 95g/km, and it’s reported that Fiat-Chyrsler’s fleet are averaging at somewhere around 123g/km.
While the “hundreds of millions” that FCA will pay Tesla will likely make little to no difference to the latter’s bottom line, the Silicon Valley company will most certainly appreciate the cash injection. Analysts speaking to the Financial Times have suggested in the past that Tesla may need to raise more cash this year to keep operations running, something that CEO Elon Musk has vehemently denied. Musk has been wrong in the past; Hopefully FCA’s money will see him land on the right side of truth this time.