FCA to pay & use Tesla to meet new EU emission norms

blackwasp · 8th April 2019, 17:52

According to a media report, Fiat Chrysler Automobiles (FCA) will pay Tesla hundreds of millions of euros to allow the electric carmaker’s vehicles to be counted in its fleet to meet new EU emission norms.

FCA formed an open pool with Tesla on February 25, 2019. This will allow the Italian carmaker to bring down its average CO2 level with the help of Tesla’s electric cars to a permissible level. The European Union (EU) will target an average of 95 gm / km of CO2 emissions from the next year. The 2018 average was 120.5 gm / km, while FCA averaged 123 gm / km.

The emission rules in Europe allow pooling of emissions internally, allowing carmakers like Volkswagen to offset Seat, Skoda and VW emissions against those from Porsche and Audi. While the rules also allow rival companies to form pools, there have been no pool agreements until now. Reports suggest that Toyota and Mazda are also likely to form an open pool.

It is also reported that Tesla generates significant revenue by selling EV credits in the US. In 2018 and 2017, the company earned US$ 103.4 million and US$ 279.7 million respectively by selling credits.

FCA to pay & use Tesla to meet new EU emission norms-fcatesla.jpg

Source: Financial Times

Link to the Team-BHP News

libranof1987 · 8th April 2019, 18:24

There is no better reaction than l-o-l. What use are regulations and laws when you provide them with such significant loopholes.

As a company, why wouldn't FCA rather spend those hundreds of millions of euros in acquiring/developing EV tech than spend them on this sort of jugaad. While VW can argue that these brands are indeed within the same company, this Tesla-FCA gimmick is very disappointing.

Side note: If FCA merge with Renault - Nissan, that'll fix this? Considering the tech Nissan has already (eg. Nissan Leaf).

HKap · 8th April 2019, 20:34

This makes absolutely no sense. This is going to bring no change as far as the overall emissions are concerned. The law isn't pushing the companies to develop cleaner cars. It's giving them a massive loophole to just meet the requirements on paper but do zilch in the real world. RIDICULOUS!

Jeroen · 8th April 2019, 23:29

I really hope somebody nails both the FCA and Tesla to the proverbial wall.

Let's make one thing clear, I will walk before I go electric, but this arrangement is just ridiculous.

The only thing that is fair is if every individual brand has to make the grade.

This whole pooling thing is just ridiculous. Rival companies pooling is even worse

Might as well give up all together

Jeroen

SmartCat · 9th April 2019, 00:38

Seems fair. This is a bit like EMISSIONS TRADING and is based on sound economics.

Quote:

Emissions trading is a market-based approach to controlling pollution by providing economic incentives for achieving reductions in the emissions of pollutants.

Tesla gets rewarded for making zero emission vehicles. FCA will pay Tesla till it figures out how to continuously reduce their overall emissions, without affecting desirability of products or profitability. Beyond a point, it will start making more sense for FCA to actually reduce their overall emissions than continue paying Tesla higher and higher amounts every year.

BaCkSeAtDrIVeR · 9th April 2019, 07:29

20 or 25 years back, there used to be a system of trading export credit in India.

It worked like this. If an exporter had an assured buyer and product, a non-exporter would pay the exporter to make the exporter do the paper work in the non-exporter's name. This was a win-win for both. The exporter gets more cash / revenue. The party in whose name the export is made gets to count the export as part of turnover, and saved almost 40% corporate tax on export turnover. Additionally, export turnover also means easy imports. The entire seafood industry survived on this business model.

I have my doubts on sustainability of this model - the industry should thrive even without this. Also, newcomers hoping to make big bucks from the credits trade will bring a bad name. Also the old business model loses actual and real incentives to move into EVs - they'll end up buying credits.

Anyway let's see. Something is better than nothing.

Guite · 9th April 2019, 22:58

This is very good business for Tesla. Elon Musk in reaping the fruit of his innovativeness. FCA and others could have developed similar technologies but it would have taken time. Of course as discussed earlier the intent of the law is not achieved.

8th April 2019, 17:52	#1
blackwasp Senior - BHPian Join Date: Apr 2015 Location: Navi Mumbai Posts: 2,974 Thanked: 26,325 Times View My Garage	FCA to pay & use Tesla to meet new EU emission norms According to a media report, Fiat Chrysler Automobiles (FCA) will pay Tesla hundreds of millions of euros to allow the electric carmaker’s vehicles to be counted in its fleet to meet new EU emission norms. FCA formed an open pool with Tesla on February 25, 2019. This will allow the Italian carmaker to bring down its average CO2 level with the help of Tesla’s electric cars to a permissible level. The European Union (EU) will target an average of 95 gm / km of CO2 emissions from the next year. The 2018 average was 120.5 gm / km, while FCA averaged 123 gm / km. The emission rules in Europe allow pooling of emissions internally, allowing carmakers like Volkswagen to offset Seat, Skoda and VW emissions against those from Porsche and Audi. While the rules also allow rival companies to form pools, there have been no pool agreements until now. Reports suggest that Toyota and Mazda are also likely to form an open pool. It is also reported that Tesla generates significant revenue by selling EV credits in the US. In 2018 and 2017, the company earned US$ 103.4 million and US$ 279.7 million respectively by selling credits. Source: Financial Times Link to the Team-BHP News Last edited by blackwasp : 8th April 2019 at 17:55.
	(11) Thanks

8th April 2019, 18:24	#2
libranof1987 Team-BHP Support Join Date: Sep 2010 Location: All over! Posts: 7,616 Thanked: 18,343 Times	re: FCA to pay & use Tesla to meet new EU emission norms There is no better reaction than l-o-l. What use are regulations and laws when you provide them with such significant loopholes. As a company, why wouldn't FCA rather spend those hundreds of millions of euros in acquiring/developing EV tech than spend them on this sort of jugaad. While VW can argue that these brands are indeed within the same company, this Tesla-FCA gimmick is very disappointing. Side note: If FCA merge with Renault - Nissan, that'll fix this? Considering the tech Nissan has already (eg. Nissan Leaf).
	(11) Thanks

8th April 2019, 20:34	#3
HKap BHPian Join Date: Jun 2010 Location: Toronto Posts: 364 Thanked: 422 Times	re: FCA to pay & use Tesla to meet new EU emission norms This makes absolutely no sense. This is going to bring no change as far as the overall emissions are concerned. The law isn't pushing the companies to develop cleaner cars. It's giving them a massive loophole to just meet the requirements on paper but do zilch in the real world. RIDICULOUS!
	(2) Thanks

8th April 2019, 23:29	#4
Jeroen Distinguished - BHPian Join Date: Oct 2012 Location: Delhi Posts: 8,101 Thanked: 50,880 Times View My Garage	I really hope somebody nails both the FCA and Tesla to the proverbial wall. Let's make one thing clear, I will walk before I go electric, but this arrangement is just ridiculous. The only thing that is fair is if every individual brand has to make the grade. This whole pooling thing is just ridiculous. Rival companies pooling is even worse Might as well give up all together Jeroen
	(4) Thanks

9th April 2019, 07:29	#6
BaCkSeAtDrIVeR BANNED Join Date: Jun 2007 Location: Kochi Posts: 2,522 Thanked: 752 Times	20 or 25 years back, there used to be a system of trading export credit in India. It worked like this. If an exporter had an assured buyer and product, a non-exporter would pay the exporter to make the exporter do the paper work in the non-exporter's name. This was a win-win for both. The exporter gets more cash / revenue. The party in whose name the export is made gets to count the export as part of turnover, and saved almost 40% corporate tax on export turnover. Additionally, export turnover also means easy imports. The entire seafood industry survived on this business model. I have my doubts on sustainability of this model - the industry should thrive even without this. Also, newcomers hoping to make big bucks from the credits trade will bring a bad name. Also the old business model loses actual and real incentives to move into EVs - they'll end up buying credits. Anyway let's see. Something is better than nothing. Last edited by BaCkSeAtDrIVeR : 9th April 2019 at 07:32.
	(3) Thanks

9th April 2019, 22:58	#7
Guite BHPian Join Date: Jul 2008 Location: Noida, NCR Posts: 733 Thanked: 630 Times	re: FCA to pay & use Tesla to meet new EU emission norms This is very good business for Tesla. Elon Musk in reaping the fruit of his innovativeness. FCA and others could have developed similar technologies but it would have taken time. Of course as discussed earlier the intent of the law is not achieved.
	() Thanks