Fiat to pool with Tesla in bid to avoid European Union fines

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It paid a $105 million US penalty, conducted additional recalls and agreed to buy back hundreds of thousands of vehicles.

Fiat Chrysler (FCA) and Tesla have drawn up a plan to avoid the former having to pay fines for violating European Union emissions rules, the FT has reported.

As an automaker that produces only zero emissions electric vehicles, Tesla is in a unique position to take advantage of a little known rule-selling emission credits to other automakers.

The move will allow FCA to offset its comparably high average Carbon dioxide figure from across its fleet against Tesla's.

It will be interesting to find out exactly how much Fiat Chrysler are paying Tesla to pool their resources and meet the new emissions targets.

According to the FT, the FCA/Tesla open pool was formed on February 25.

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.

Although FCA has huge electrification plans, with a number of Jeeps to gain plug-in technology, they've lagged behind most other companies and as such, could be in serious trouble.

So flow for the calculation of the CO2-limit-average of the FCA-a fleet in the future also the CO2-neutral vehicles in the electric auto pioneer Tesla. The company has made more than $1-billion since 2016 by selling its emissions credits, which also allows it to post quarterly profits. According to The Financial Times, Tesla sold $103.4 million ($145.3 million) credits in 2018 and $279.7 million ($393 million) in 2017. "The purchase pool is providing flexibility for delivering products that FCA's customers are willing to purchase while managing compliance using the lowest cost approach", said an FCA spokesperson in a statement (source).

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