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Old 10th January 2020, 20:30   #1
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Default Fiat Chrysler will effectively fund Tesla's German factory

According to investment bank Robert W. Baird & Co, Fiat Chrysler's (FCA) deal with Tesla to meet EU emission rules by pooling Tesla's fleet will effectively pay for the Tesla's German factory. FCA reached an agreement with Tesla in 2019 that could cost FCA an estimated 1.8 billion ($2 billion) through 2023. That breaks out to about $150 million to $200 million per quarter.

Carmakers need to meet average fleet emissions of 95 gm/km from 2020 in EU. Without EVs or very few plug-in hybrids and the high percentage of SUVs in their line up FIAT struggling to meet the emissions targets and need to pay billions of euros in fines.

On the other hand, Tesla just announced a factory in Germany with plans to start production in 2021, where they will be producing Model 3, Model Y along with battery packs and powertrains.

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