Author: Jack
POSTED ON 10 Apr 2019

Fiat Chrysler Automobiles Paying Millions To Tesla In EU Emissions Loophole

Big business thrive to find a good loophole to avoid legal obligations that could result in a hefty fines if those obligations aren’t met. One example of this is the EU’s emission law that states that the average across a manufacturing group’s entire model range is 95g/km or less between 2020 and 2021.

In 2018, Fiat Chrysler Automobiles (FCA) fleet average was 123g/km – a far cry away from the 95g/km obligation. The fine for failing this threshold is €92 (103 USD) per gram for every car sold. FCA sold just shy of one million cars in the EU in 2018 meaning that they would be fined €2.7 billion ($3B USD) if the penalty was applied for 2018. Seeing that the FCA doesn’t have a feasible game plan on reducing their emissions by 2020, a work-around was in dire need. This is where Tesla comes in.

FCA has agreed to pay Tesla millions of dollars so that all Model Ss, Model 3s, and Model Xs will count towards their pool of vehicles upon which its fleet average emissions are calculated. If everything goes according to plan, the Teslas entering the EU should lower the FCA overall average to below 95g/km without really having to change their own line up. All Tesla had to do was sign paperwork to earn millions of dollars. Now that is one serious loophole.