Fiat Chrysler Offsetting Emissions With Credits From Tesla

Public Domain. Old Fiat

This doesn't seem right.

As of next year, the European Union is introducing really tough standards for CO2 emissions, with a requirement for fleet average emissions of 95 grams per kilometre. Fiat Chrysler (FCA) was up there at 123g last year, and could face big fines. But as the Financial Times notes,

Under EU rules, carmakers are allowed to pool emissions internally, allowing Volkswagen, for example, to offset VW, Seat and Skoda emissions against those from Porsche and Audi cars. The rules allow rival companies to form so-called open pools but until now none have agreed to do so.

According to the FT, "Tesla generates significant revenues by selling zero emission vehicle credits in the US. Last year, it earned $103.4m in this way, versus $279.7m the year before."

I suppose that there is really no difference between internal pooling, where they figure out a fleet average, and open pools, where you buy the credits. But it feels wrong. A few years ago I visited Fiat's research facility and back then, the company had put their money into Compressed Natural Gas rather than electric cars, saying:

The electric car still has some sustainability problems, not from the environmental point of view but from the social and economic point of view, because the ranges are too limited, recharging times are too long, and cost too high.

The late Sergio Marchionne was never was crazy about electric cars, complaining that he lost $14,000 on every Fiat he sold in California. “I don’t know of a (business) that is making money selling electric vehicles unless you are selling them at the very, very high end of the spectrum.”

So now they are playing catchup, because "its low sales of electric cars make meeting the EU targets near impossible without the Tesla agreement." Perhaps this was one of his few bad calls.