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Transportation Businesses EU The Almighty Buck

Fiat Chrysler Will Pay Tesla To Dodge Billions In Emissions Fines (theverge.com) 155

MDMurphy writes: While people have good and bad things to say about Tesla, one consistent thing has been that the cars emit zero emissions when operating. But in Europe, in exchange for cash, Tesla is merging its fleet with that of Fiat Chrysler Automobiles (FCA). The amount FCA is paying Tesla is presumably less than they would in fines if they were on their own. With this merging of the fleets, in Europe at least, a Tesla is no more clean than a diesel Fiat. "The Italian-American carmaker is behind on meeting the new standard, and the so-called open pool option available at the EU allows automakers to group their fleets together to meet the targets," reports Bloomberg. "Payments to Tesla, whose electric cars don't produce CO2 emissions, may amount to over 500 million euros, according to Jefferies."

Ars Technica reports on the strict new EU regulations: "From 2020, 95 percent of an automaker's new cars sold in the EU have to meet this target, with the remaining 5 percent falling under the law in 2021. And the penalties for failing are draconian: a $107 'excess emissions premium' per gram of CO2 over the target, for every single car registered in the EU that year. For some OEMs, this has the potential to be ruinous; if FCA's portfolio were the same in 2021 as it was in 2018, the automaker would have to pay some $3.12 billion, out of total net global profits of $4.1 billion."
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Fiat Chrysler Will Pay Tesla To Dodge Billions In Emissions Fines

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  • by Anonymous Coward

    Betcha didn't see that one coming

    • by Anonymous Coward

      LOL, no shit.

      Coal powered cars for the win.

  • by SuperKendall ( 25149 ) on Monday April 08, 2019 @08:12PM (#58407330)

    So, with Tesla being the only automaker who can realistically deliver cars and charging stations for fleets around the globe needing to meet standards in this way, perhaps it starts to become clear just how incredibly valuable Tesla is becoming...

    • by Anonymous Coward

      Sure, the ridiculous regulations are keeping them in business with government interference in the marketplace instead of,them competing on their own merits.

      If the average car buyer was so concerned about CO2 emissions they would only buy electric or maybe hybrid. The fact that they,do not speaks volumes about what buyers want. So instead the government steps in, creates an artificial market in CO2 credits and hey guess what? The air has just as much new CO2 as before. Pollution levels unchanged but than

      • by Anonymous Coward

        Sometimes regulation is required if the market is making bad decisions for the safety of the public. Let me guess, you think the Clean Air Act and Clean Water Act were terrible because if "the market" wanted clean air they would buy power from coal plants that voluntarily installed scrubbers? Or "the market" would move to places where industries were not dumping toxic shit into waterways?

        The EU decided they want less carbon output from transportation. And they adopted a market-based solution akin to cap

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        Go eat some meat tainted with salmonella because it wasn't inspected by the FDA. Follow that with a side of botulism from improperly canned foods because they weren't inspected either.

        Then drive your Ford Pinto down the road and pray you don't get rear-ended because nobody recalled them for turning info fireballs.

        If you survive your day, you can go home to your asbestos-filled home (ignore that mild cough... it's surely nothing). Eat a nice dinner dinner with loads of FD&C #2 food coloring (not banned

      • by Dunbal ( 464142 ) *
        Buyers want affordable. Otherwise we'd all be driving Rolls Royce. The volume in sales is at the bottom end of the market for any given category where lower price is more important than value for money.
      • what buyers want

        Buyers don't give a crap about anybody but themselves. How did our right to pursue happiness turn into an outright reverence for unrestrained self-indulgence?

      • nox and deisel pollutes and kills people, good luck chuck.

        Oil companies have HUGE govt tax incentives.

        Anon OIL SHILL

      • by Socguy ( 933973 )
        How is this comment insightful? The author didn't even bother to put his/her name behind it. Clear ideological drive-by.
      • Sure, the ridiculous regulations are keeping them in business with government interference in the marketplace instead of,them competing on their own merits.

        You mean a government, representing the people, forcing a company to pay the costs of externalities that had previously been paid for by everyone?

    • The Italian-American carmaker

      Is that a bit like an "Italian-American businessman"? "Nice emission-free car youse got dere, be a shame iff'n something wuz to happen to it".

    • this is just going to shift a bunch of money around at the top without actually impacting emissions all that much in the short or long term.
      • his is just going to shift a bunch of money around at the top

        Yes that is true.

        What is also true is a bunch of that money is in fact shifting to Tesla, a company that not that long ago it was claimed was not viable.

        Now it's the only company that can fulfill fleet requirements for large numbers of electric cars and infrastructure.

      • The European system was apparently *deigned* to allow and *encourage* this.

        It's the same notion as "emission credits" that tend to create more economic output for the same amount of pollution by allowing the "right" to emit to be sold to someone who can make better use out of those emissions.

        Here, it changes the industry incentives: when an electric can "sell" in this way, it creates a subsidy from the polluting producer to the clean company. This is *no* different than a reduction in the cost of steel or

    • RTFA. They're not buying Tesla cars. FIAT is buying emissions credits from Tesla.
  • by fozzy1015 ( 264592 ) on Monday April 08, 2019 @08:21PM (#58407372)
    The pool was setup over a month ago. The timing of the announcement now amounts to a stock pump given the incredibly weak Q1 delivery numbers. It's all speculation at this point how much money these credits will net them, and it's not like they're going to be the only player. Many Chinese companies are going to be selling BEVs starting next year. $1 - $500M, over the course of 3 years, with very little credits needed to be bought this year. At most, FCA may have given Tesla some money immediately as a call, in the tens of millions, but if something like this has happened, where is the 8K that should be filed to show this? At most it may have helped payroll for a week, but does nothing to alleviate Tesla's immediate, existential threats.
    • Another idiot

      First Q1 is shorter than Q2 has more holidays etc...

      You cant count cars already ON A SHIP on its way to Europe, even tho if you did the true 'shipped' products are HIGHER.

      Why not count SHIPPED cars, like APPLE counts SHIPPED IPHONES.

      FOzzy idiot.

    • given the incredibly weak Q1 delivery numbers

      There's nothing weak about Q1 delivery numbers other than people (typically accountants) who stare at the current number and don't look at it in relation to anything which has recently happened ... such as a concerted effort to boost Q4 deliveries on account of the end of the tax breaks.

      Now if you remove the distortion that occured due to an arbitrary external factor (say by looking at combined Q1/4 and combined Q2/3 you continue to see a normal and stead upwards trend.

  • Indulgences, indulgences for sale! Buy your indulgences, get them quick! Yeah, the CO2 you're generating will kill us all, but if you pay someone else because they didn't produce CO2, you're absolved of your sins! Indulgences, indulgences for sale!
  • by Gravis Zero ( 934156 ) on Monday April 08, 2019 @09:20PM (#58407626)

    I see little reason why Tesla should be taking accepting anything less than a billion euros. It's in the best interest of the world (and Tesla) if they make Fiat Chrysler really bleed to pay to avoid such a massive fine.

    • by AmiMoJo ( 196126 )

      Even better would be if they did a deal with the EU to invest the fine money in EV R&D and building charging infrastructure, with a requirement to have X new EV sales and X new charging stations open by 2021.

  • Those who were going to buy Teslas, bought Teslas.

    Those who were going to buy Fiats, bought Fiats.

    Fiat effectively paid a fine to Tesla instead of a larger fine to the government.

    The "combined fleet" emitted exactly the same amount of CO2 both before and after the money changed hands.

    Hooray?

    • by vux984 ( 928602 ) on Monday April 08, 2019 @09:37PM (#58407678)

      " So what in the world was accomplished? "

      Two things actually:

      1) We got to see corporate lobbying in action. They effectively got themselves a loophole that would let them reduce their fines by 70% or whatever.

      2) Even so, an electric car company got a big cash infusion paid for by a big polluter; helping increase the competitiveness of Tesla at the expense of Fiat.

      It's effectively subsidizing electric car research, development and production, paid for by fiat ... which really means it's paid for by the people who chose to buy chryslers and fiats.

      It also seems like this, at least, is precisely the desired outcome.

    • If FCA wants to maintain their profits, they'll have to raise prices to offset the money they're paying Tesla.

      If Tesla wants to maintain their profits, they can lower prices.

      If FCA prices are higher and Tesla prices are lower, there are probably some people who will decide to buy a Tesla instead of an FCA.
  • Pride of America (Score:5, Interesting)

    by Shane_Optima ( 4414539 ) on Monday April 08, 2019 @09:50PM (#58407714) Journal
    It's surreal how bad and stupid political polarization has become, that we could have right wingers shunning and harassing [slashdot.org] Teslas and Tesla owners to make an anti-Democrat statement. It's not about being anti-science; it's just anti-Democrat, anti-left.

    This is an AMERICAN car company that's spearheading this revolution. I happen to think that Elon Musk is annoyingly overrated, but I can't deny that he is basically the embodiment of every single pro-entrepreneur, pro-privatization, American dream cliche. American jobs. American pride. He's the same guy sending our satellites into space now; so why can't someone just drape an American flag over his shoulders and run with it?

    I say this through grit teeth... personally, the hero worship of this guy really gets under my skin, sometimes it's even worse than Jobs, but that's just a pet peeve... from the standpoint of ushering in this revolution why aren't they calling Musk the next Henry Ford? It's in America's best interest for him to be leading this charge.

    And yes, I said revolution. This SHOULD be a big deal, far exceeding its ecological implications. This really should be the biggest thing to happen to cars since the Model T. If battery technology can significantly improve and/or existing batteries come down in price a lot more, electric cars would offer huge advantages over the vast majority of diesel and gasoline vehicles on the road today. Electric cars should be significantly cheaper to build and maintain: lower operating temps, simple transmission, just fewer moving parts across the board.... I wouldn't be so surprised if in fifty years time we had electric cars capable of going millions of miles without needing a total rebuild.

    And Tesla is also leading the charge with the other major automobile revolution--autopilot--which some day is going to lead to safer and much more efficient (i.e. fast) roads Which is a really big deal in a country as sprawling as America.

    Also: the less the world relies on oil, the less money and power OPEC has. Aren't there still millions of voters out there who remember the oil crisis in the 70s? Is no one concerned about the prospect of the Salafi government in Saudi Arabia pulling even more money out of the ground? I for one wouldn't shed a tear if the wealth and power of the OPEC countries diminished. A couple years back even ISIS was managing to get their hands on oil money for a while there. Why can't oil independence be spun as a national security issue? So-called "Islamophobia" harnessed for a good cause, you might say.

    But no... this would-be pride of American capitalism and security and optimistic futurism is instead just another pawn in the cultural proxy war.

    Instead of something positive and bipartisan-y, liberals invariably lead with the negatives: First, by making some lazy and crazy comments implying human extinction (Don't go wildly exaggerating something that ordinary people already have a tough time perceiving! Sure, many species will go extinct, maybe some cities go underwater and we may have to switch crops and maybe worst case we lose a lot of seafood, but we're obviously never going to see mass starvation and human extinction unless something really far-fetched happens, like an extreme version of the clathrate gun effect or some other deadly positive feedback loop that for some reason was never triggered in past epochs.)

    Second: the liberals will whine about America's sins and the sins of those running her. I know it's depressing, I know it is, but I really don't give a shit what Trump said. I don't need to see dozens upon dozens of posts trying to single out American carbon emissions as being particularly bad. I don't care if that's true or not; nobody needs to see that shit. It has nothing whatsoever to do with the actual solutions. Nobody wants to hear you whine abou
    • that we could have right wingers shunning and harassing Teslas and Tesla owners to make an anti-Democrat statement.

      From the Reddit thread you linked to:

      It's weird that guys like this think that people who drive expensive electric cars vote differently than they do. I only know 3 Tesla drivers, and they're all Republicans.

      From a comment nearby:

      A lot of guys I work with drive lifted up trucks. You'd think we were all redneck Trump supporters, especially since we are construction tradesmen. We are union and w

      • To me this is way different than right/left, this is car owners just being jerks probably because they see Tesla drivers as elite - could honestly be either conservative or liberal

        Actually, by definition, their actions are conservative. “(of a person or a set of views) opposing political or social liberalization or reform.”

        Rural areas (which it was) are dominated by Republican voters and it happened in a Republican dominated state.

        Could one of them be a closet Democrat? Sure... but it's rather improbable. So what's more likely? Well, I saw one comment sum up their hate for Tesla quite nicely.

        Because Tesla is green and liberals like green so therefore they hate Tesla. Because climate change is a hoax so keep chugging oil. Because Tesla is from California, and California is liberal, so don’t trust Tesla. Because it’s not what their dad and grandad said was good.

        • Actually, by definition, their actions are conservative. âoe(of a person or a set of views) opposing political or social liberalization or reform.â

          Fine, if you want to claim all Democrats are conservative, since they all oppose Trump reforms for example.

          However since we live in the real world perhaps lay off the grammar nazi bit a little, Mkay? It just makes you look petty.

          Rural areas (which it was) are dominated by Republican voters

          If you bothered reading your own link you'd find it happened in

    • I for one hope that FCA doesn't buy Tesla. FCA doesn't have the best track record regarding quality and I think "they don't get it" - it would kill Tesla as they try to move from Jogging to Running.

      People down the middle don't care about your (valid) arguments, many don't know who Tesla is. The two ends are fighting against each other to an unknown end. You can say "told you so" when the water in NYC is knee deep.

      One side feels that it's all about government control. Raising taxes (carbon tax) and try

    • by King_TJ ( 85913 )

      Well .... I, for one, can't think of anything smarter than trying to supply the demand that's out there with a business. Do I think this is just insanity, trying to impose these artificial restrictions on carbon emissions? Why yes .... yes I do.

      I mean, this volcano in Mexico is suddenly erupting over and over after having been dormant for the last half century or more:

      https://www.nytimes.com/2019/0... [nytimes.com]

      That, alone, probably contributes more to emissions than all of the motor vehicles they're so concerned abou

      • Any numbers to back up your hand-waving about the CO2 from the volcano? I know cars alone aren't the biggest source of greenhouse gasses but a while back I thought I'd read they were responsible for over 20%.

        If for the sake of argument you grant that global warming is a serious long term problem and the switch to electric cars would make a dent in that problem, I'm making the point that the switch to electric cars is going to happen anyway. The advantages are too significant for it to not happen. So thi
    • It is American pride to be free. The Land of the Free. Land of opportunity. A land built on distrust of the government with limited government actions. It's a land that very much lead the way in exploitation of workers and resources. That is AMERICAN! Drill baby drill, but only if you're doing so while burning American coal.

      Elon is the antithesis of that vision. It's a company that is built on the opportunity and expectation that competitors cannot continue due to their "freedoms" being reigned in through r

  • by scdeimos ( 632778 ) on Monday April 08, 2019 @11:53PM (#58408068)

    For some OEMs, this has the potential to be ruinous; if FCA's portfolio were the same in 2021 as it was in 2018, the automaker would have to pay some $3.12 billion, out of total net global profits of $4.1 billion.

    That's the point: it's meant to be ruinous. Or you clean up your act by improving the emissions output of your vehicles.

  • by Anonymous Coward

    Because that's the only thing the auto industry knows how to do.

    Disappointing.

  • scandalous (Score:4, Interesting)

    by sad_ ( 7868 ) on Tuesday April 09, 2019 @05:56AM (#58408824) Homepage

    this is just ouragous to me; instead of investing €500m in developing a better engine, they just fool the system.
    ofcourse the system allows it, and they should really close this loophole.
    if they can't make their engines cleaner, well bad luck, plain and simple.
    perhaps they can buy engines from somebody who can actually get their act together to put in their cars, instead of these scandalous tactics. this is nothing new and is done all the time, it can't be more expensive then paying the fines (or €500m).

    • by Hodr ( 219920 )

      It only kicks the bucket down the road, not a complete circumvention. The Tesla fleet is already zero emissions, so unless Tesla suddenly starts selling much better than FCA in Europe (which is possible) this merger was a one time benefit. FCA will still need to improve their own fleet to continue progressing.

    • Re: (Score:2, Informative)

      by Anonymous Coward

      I think this actually makes perfect sense - Tesla doesn't just meet the EU specs, they exceed them. So in return they get cash from an automaker that doesn't meet emission specs. If there weren't this "loophole" then Tesla would get no cash in return for exceeding specs. That cash helps them continue to increase their scale to better compete with current automakers, and subsidize EVs a bit more while scale and performance continues to improve.

      • by sad_ ( 7868 )

        don't know about other EU countries, but how it works here is that your road-tax is tied to the emission your vehicle has.
        tesla would get more 'cash' by increased sales since their cars are cheaper to own (thus more interesting to buy).

  • Whilst paying Tesla may reduced the size of the financial penalty, they are in effect subsidising a competitor. It might be more economic in the long run to pay the EU fine.

  • Chrysler-Fiat is a victim of the pique of its late chairman Sergio Marchionne, who pooh-poohed electric cars for years, not for any substantive reason but just because he took personal offense at the idea of governments telling him what kind of cars he had to produce and sell. He even famously dissed CF's own Fiat 500e, which is actually a pretty nice car, I personally like it better than any of the Teslas. But the point is to subsidize EVs at the expense of large, heavily polluting gas and diesel vehicle
  • > With this merging of the fleets, in Europe at least, a Tesla is no more clean than a diesel Fiat.

    That's total bunk. Tesla is effectively selling the clean energy credits. They have an excessive amount of them. They've been doing this in California for years. This doesn't make a Tesla "no more clean than a diesel Fiat".

  • This is what we call a carbon market. It's the goto proposal by the left for how to fight climate change. American liberals point to these policies as an example for the U.S.

    Why does the title and summary sound so menacing?

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