The deal will enable the auto giants to evade emission fines, by including Tesla EV’s in their fleet, to lower the average emission amounts
The surge in electric vehicles has set the automotive industry on an interesting path. Auto makers have stricter norms to adhere to, especially when it comes to emission standards, for which there is an actual need, as the pollution levels surge. Many automakers have been hit with massive fines over the issue of faking emission reports, which led to massive re-calls worldwide. Fiat Chrysler Automotive (FCA), could be the latest to bear the brunt of such a fine, however the Italian-American auto maker is trying their best to evade being penalized.
Tesla Motors have a provision, under which automakers can display Tesla cars as a part of their own fleet, for a price, and a hefty one at that too. The European Union has laid down much stricter regulations for emission standards, which will be effective from 2020, with maximum possible emission levels being cut down to 95g per kilometer, as opposed to the previous limit of 123g per kilometer.
Tesla have been known to help auto makers out with such problems before too. In 2018, the company accrued US$ 103.4 million through the sale of such zero-emissions credit. FCA have plans for electrification and hybridization of cars themselves, however they have fallen much behind competition as most major automakers are aggressively pursuing the new technology. The details of the deal have not been finalized, but it is expected that Tesla motors is set to gain over hundreds of millions of Euros from the deal with FCA. However, that could be cutting a smaller loss for FCA, as the EU would have imposed a heftier fine on them, if found to be violating the permissible emission standards.