FCA CEO: No European CO2 fines for 2 years, thanks to Tesla
FCA can thank credit-swapping for meeting regulations this year.
Following Fiat Chrysler Automobiles' swift move to count Tesla vehicles as part of its vehicle fleet in the European Union, FCA CEO Mike Manley believes the company will not face any fines this year or in 2020.
Automotive News Europe reported Wednesday on Manley's comments during a conference call about FCA's second-quarter financial results. The Tesla deal saw FCA pay an incredibly large sum of money to stay compliant with the most recent EU emissions regulations. Although Tesla and FCA have zero financial involvement together, the EU allows pooling, which became the Italian conglomerate's saving grace.
Manley also said the automaker will avoid future fines as it introduces more electrified models and new internal-combustion engines that are more fuel-efficient. Specifically, he was referring to mild-hybrid versions of the Fiat 500 and Jeep Renegade on the horizon, along with PHEV variants of the Renegade, Wrangler and Compass. Combined, Manley said the company expects the electrified vehicles to make up 5% of the automaker's sales mix in Europe.
On the traditional engine side of things, the automaker will also roll out new three-cylinder engines for the Fiat 500X and Renegade that displace 1.0 and 1.3 liters.
Although the company will avoid fines, that's not to say FCA saved money. In the same conference call, Chief Financial Officer Richard Palmer said the bill to meet regulations in Europe this year is about $134 million based on current exchange rates. Globally, the automaker will spend over $672 million to remain in compliance across multiple markets.
Meanwhile, FCA can't dawdle. In 2021, the EU will phase in even stricter emissions regulations that 95% percent of its sales must adhere to. Fortunately, it sounds like the automaker has kicked its electric car program into a higher gear. Manley mentioned another battery-electric car in the works to complement the second-generation electric Fiat 500. Five more electrified vehicles are also in the pipeline.
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