Tesla Just Lost One Of Its Biggest Emissions Credits Customers

Tesla Just Lost One Of Its Biggest Emissions Credits Customers

Illustration for article titled Tesla Just Lost One Of Its Biggest Emissions Credits Customers

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Since 2012 Tesla has made several billion dollars in emissions offset credits sold to other automakers, with FCA having bought the lion’s share of those. According to a report from Reuters, the automaker formerly known as Fiat Chrysler Automobiles N. V. purchased around $2.4 billion in European and U.S. CO2 credits from Tesla just in the period from 2019 to 2021. Tesla shifted half a billion in credits within just the first quarter of 2021, in fact.

European emissions regulations are much stricter than those of the U.S. market, and continue getting stricter all the time. Starting this year new vehicles sold in Europe must not emit more than 95 grams per kilometer of CO2, or else it will be subject to pollution fees. As it stands, corporate fuel economy of light vehicles must exceed about 68 miles per gallon. FCA was particularly short on these emissions standards, and thus paid hundreds of millions of dollars to Tesla in order to have its cars considered part of the company’s “pool” in Europe. Because the fine would have been much larger than whatever FCA paid to Tesla, it was a win-win for both.

Now that FCA has merged with PSA to form Stellantis, the new company has received a significant upgrade in its electrified car range thanks to serious EV sales from Peugeot and Citroen. According to Stellantis boss Carlos Tavares, the company no longer needs Tesla’s regulatory credits to pass the CO2 test.

“With the electrical technology that PSA brought to Stellantis, we will autonomously meet carbon dioxide emission regulations as early as this year,” Stellantis boss Carlos Tavares said in the interview with French weekly Le Point. “Thus, we will not need to call on European CO2 credits and FCA will no longer have to pool with Tesla or anyone.”

“As a result of the combination of Groupe PSA and FCA, Stellantis will be in a position to achieve CO2 targets in Europe for 2021 without open passenger car pooling arrangements with other automakers,” he added.

The European Commission is already meeting to propose its next emissions tightening phase of operations, setting a new lower regulations target for 2030, with a sliding scale from now until then getting stricter every year. The current discussions include a new target for 2030 potentially as low as 43 grams per kilometer, or the equivalent of roughly 155 miles per gallon.

A Stellantis spokesperson told Reuters that it was currently in discussions with Tesla as to the financial ramifications of the decision to stop the pooling agreement in Europe.

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