FCA joins hands with Tesla to meet stricter EU emissions regulations

Fiat Chrysler Automobiles (FCA) has agreed a deal with Tesla to help avoid paying fines for exceeding new European Union emissions limits.

FCA, whose brands include Alfa Romeo, Fiat, Jeep and Maserati, will pay for the right to count Tesla’s electric vehicles as part of its fleet, under an ‘open pool’ option allowed by EU regulations. Under EU rules, the average emissions of a firm’s new car fleet in 2021 must be 95g/km or less, down from the current 130g/km.

The EU fleet averages are based on cars sold. While Tesla remains a minor player in Europe in terms of total car sales, its EVs could have a significant impact on FCA’s total fleet average, because they don’t emit any CO2.

The European Commission website shows that FCA formed the pool with Tesla on February 25. Neither firm has commented on how much FCA is paying Tesla, but the Financial Times, which first reported the story, said it totalled “hundreds of millions of euros”.

In a statement, FCA said the deal would “optimise the options for compliance that the regulations offer”. It added: “FCA is committed to reducing the emissions of all our products. The purchase pool provides flexibility to deliver products our customers are willing to buy while managing compliance with the lowest cost approach.”

FCA has recently begun a major push towards electrification, unveiling a number of Jeep and Alfa Romeo plug-in hybrid models at last month’s Geneva motor show, along with the electric Fiat Centoventi concept. The firm is also developing a new electric Fiat 500; although, this is not due to arrive until next year.

Tesla has yet to comment on the deal but, as it only produces electric cars that don’t emit any CO2, it would not have been affected by the EU regulations. The firm currently sells the Model S and Model X in Europe, with the Model 3 recently arriving in selected markets.