Fiat Chrysler Automobiles and Tesla have become unlikely bedfellows in circumventing European Union emissions violations because of a loophole in the regulations.
FCA will pay Tesla for permission to count its EVs in FCA's own fleet under an option in the regulations known as the “open pool,” the Financial Times (subscription required) reported on Saturday.
Under current EU regulations, major automakers will need to have a fleet-wide average for carbon dioxide emissions of no more than 95 grams per kilometer by 2021, down from a current limit of 130 g/km.
It would seem that by counting Teslas cars, which produce zero emissions, FCA will be able to bring down its average to a permissible level. The amount to be paid by FCA to Tesla was reported to be in the hundreds of millions of dollars.
In a statement made on Sunday to Reuters, FCA said the loophole provides it with the “flexibility to deliver products our customers are willing to buy while managing compliance with the lowest cost approach.”
The practice is similar to Tesla selling emissions credits to major automakers here in the United States, something that has netted the EV manufacturer over $1 billion in the last three years.
FCA isn't ignoring the EV trend, though. While the company has been selling limited numbers of an electric Fiat 500 in some states for compliance reasons in the past few years, it will in 2020 launch a next-generation electric 500 as a volume model. It also plans to expand the number of plug-in hybrids it sells by adding some to its premium Alfa Romeo and Maserati brands, as well as Jeep. FCA is also planning electric models for Maserati.