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Stellantis Won’t Need To Buy Tesla Emission Credits Anymore:

CEO Tells French Newspaper, Automaker Will Meet New co2 Goals...

For a number of years now, former Fiat Chrysler Automobiles (FCA) had purchased co2 credits from Tesla, in order for the company to maintain compliance with environmental regulations. The deal was good for both companies, as FCA could continue producing its vehicles that were generating billions of dollars in revenue and Tesla was lining their pockets with much-needed cash flow.

Now, as a new era is starting with the formation of Stellantis, the merged identity of FCA and Peugeot S.A. (PSA), the partnership with Tesla is about to change.

2022 Tesla Model S Plaid. (Tesla).

In an interview via videoconference with the French newspaper Le Point, Stellantis CEO Carlos Tavares announced that the newly formed Stellantis Group would meet all of its co2 goals in Europe as early as this year, thanks to its portfolio of PSA-based hybrid and electrified vehicle technologies. This means that the FCA part of the company would no longer require the needed credits from Tesla or any automaker to meet regulation standards.

2020 Jeep® Renegade Limited 4xe. (Jeep).
2021 Jeep® Renegade Limited 4xe. (Jeep).

European regulations require all car manufacturers to reduce co2 emissions for private vehicles to an average of 95 G/km (grams per kilometer) this year.

The move may prove easier said than done. According to a report from the Automotive News, FCA reached a multi-year agreement to purchase regulatory credits from the American electric automaker in 2019. Stellantis told the Automotive News that it was in talks with Tesla about the financial implications of backing out of the agreement.

2022 Citroën C5X Plug-In Hybrid. (Citroën).

“As a result of the combination of PSA and FCA, Stellantis will be in a position to achieve co2 targets in Europe for 2021 without open passenger carpooling arrangements with other automakers,” a Stellantis spokesman told the Automotive News

2021 Peugeot 308 Hatchback Hybrid. (Peugeot).
2021 Peugeot 308 Hatchback Hybrid. (Peugeot).

From 2019 to 2021, FCA  spent about $2.4 billion in obtaining regulatory credits from Tesla. Tesla reported in its quarterly reports during that time period that it made $2.365 billion by selling its credits. That revenue helped Tesla report positive Generally Accepted Accounting Principle (GAAP) income from the third quarter of 2019 to the first quarter of 2021 of $1.407 billion. This means that the electric car manufacturer spent almost $1 billion of its revenue from selling the credits to FCA, to cover its operating expenses.

Tesla could sell their credits to another manufacturer if there is a demand. Regulations will continue to tighten as new proposals from the European Commission could enforce new co2 emissions of 43 G/km by 2030.

 

Robert S. Miller

Robert S. Miller is a diehard Mopar enthusiast who lives and breathes all that is Mopar. The Michigander is not only the Editor for MoparInsiders.com, 5thGenRams.com, and HDRams.com but an automotive photographer. He is an avid fan of offshore powerboat racing, which he travels the country to take part in.

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When exactly will the credit purchases cease? Because when they do, Telsa is no longer profitable and I absolutely want to time a short position to that event.

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When exactly will the credit purchases cease? Because when they do, Telsa is no longer profitable and I absolutely want to time a short position to that event.

My sentiments exactly. But this seems applicable for their automotive business only. People throw money at his company for lots of reasons now. Guess it was smart to diversify.

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When exactly will the credit purchases cease? Because when they do, Telsa is no longer profitable and I absolutely want to time a short position to that event.

Note to anyone who doesn't understand laws surrounding trading, specifically trading on insider information:

What Is Insider Trading?​

Insider trading involves trading in a public company's stock by someone who has non-public, material information about that stock for any reason. Insider trading can be either illegal or legal depending on when the insider makes the trade. It is illegal when the material information is still non-public, and this sort of insider trading comes with harsh consequences. - Insider Trading Definition

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My sentiments exactly. But this seems applicable for their automotive business only. People throw money at his company for lots of reasons now. Guess it was smart to diversify.

Not exactly. Their energy business is shrinking, and the installation estimates/prices for the solar roof installs have skyrocketed since they've now had a come to Jesus moment on what they would need to charge to make it a viable business. Panasonic has completely exited their Tesla partnership for the Buffalo Gigafactory (

).

The only thing holding up Tesla is China, EV credit sales, and the fraud they've managed to sell 'Full Self Driving' while referring to it as SAE Level 2 driver assistance in legal correspondence with the state of California as of a week ago.

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Tony - I'll give deference to what you've cited once the SEC starts enforcing security laws, which last I checked, they mistakenly applied over a decade ago with Martha Stewart.

They're bumbling idiots, completely toothless, and between NHTSA and the SEC have allowed Musk to get away with murder via FSD claims, and fraud with respect to the games TSLA plays with Accounts Receivable/end of quarter sales being booked twice, and the revenue they recognize from FSD sales.

This country used to enforce the rule of law. Now we have bumbling bureaucrats who will eventually show up to a crime scene after they've been contacted multiple times that there is an active multi-hundred billion dollar+ scam being perpetrated, and consumers dying from believing in bad marketing claims in the process.

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