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Tesla Provided Most Of The $362M Regulatory Credits Purchased By Fiat Chrysler In 2020

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Madhukumar Warrier
·1 min read
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Fiat Chrysler, a part of the newly-created automaker Stellantis N.V. (NYSE: STLA), said Wednesday that it purchased most of the $362 million in regulatory credits last year in Europe from Tesla Inc. (NASDAQ: TSLA), according to a report by CNBC.

What Happened: Fiat Chrysler merged with Peugeot parent PSA Groupe in January this year in a $52 billion deal to form Stellantis, the world’s fourth-largest automaker.

As per the CNBC report, Stellantis CFO Richard Palmer said this company plans to spend slightly below 300 million euros this year on credits to avoid fines for CO2 emissions.

See also: How to Invest in Tesla Stock

Vehicle manufacturers face stringent carbon emission rules in Europe. Companies are required to either produce a certain amount of zero-emission vehicles to offset the CO2 emissions or pay hefty fines. They can also purchase credits from other less-polluting automakers to meet their emission limits.

Why It Matters: Tesla, which already has a huge lead in electric vehicle technology, generated revenues of $1.58 billion from regulatory credits in 2020. That is almost triple the company’s 2019 figure of $594 million. The regulatory credits accounted for 5.8% of Tesla’s automotive revenues of $27.24 billion last year.

Price Movement: Tesla closed 4.8% lower on Wednesday at $653.20 and traded another 0.3% lower at $651.25 in the pre-market session on Thursday.

Related: Honda, Fiat Pool To Pay Tesla for European CO2 Compliance: Report

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