On a call with analysts after earnings came out, CEO Michael Manley provided some detail on FCA's relationship with Tesla moving forward.
Tesla will save Fiat Chrysler from huge fines in Europe.
It is no secret that the requirements for car emissions in Europe are becoming stricter almost every year. It is in Europe that some countries have already announced plans to abandon the sale of cars with internal combustion engines in the foreseeable future.
In addition, next year the European Commission will introduce another interesting rule related to this market. We are talking about the average rate of carbon dioxide emissions for the entire fleet of a particular manufacturer for the year.
Simply put, the average carbon dioxide emissions for all cars sold by a company during the year should not be higher than normal. The norm is set at 152.9 g/mile.
Thus, those manufacturers that sell as many electric cars or hybrids as possible will benefit. Companies that do not fit the norm will face heavy fines.
The problem is that some manufacturers either still do not have “green” cars in their assortment, or there are too few of them. In particular, Fiat Chrysler Automobiles has a problem.
However, EU legislation allows car manufacturers to get out of the situation without changing their fleet. This opportunity lies in the “unification” of fleets of different manufacturers.
According to Manley FCA, which lags other automakers in terms of electrification investment, might buy an electric-platform or platforms from Tesla.
Manley said that if the merger with the PSA Group goes through, creating the world's fourth largest automaker, then electrification would happen on a "grand scale" and that further cooperation would make sense.
FCA CEO Mike Manley responded to an analyst's question about Tesla's technology by indicating that the company might "buy" rather than "build" basic EV platforms.
"It would be wrong of me to say no," Manley said, highlighting the potential of such an arrangement to enable FCA and PSA to conserve capital.
"The customer will be agnostic" to certain components, Manley said, noting that batteries and drivetrain would be among them. He added that a company could buy a "skateboard" platform from Tesla, then tune other systems, such as suspension and handling, to suit various brands (FCA already has marques as diverse as Jeep, RAM, Maserati, and Alfa Romeo).
Tesla actually has some history as a supplier to other automakers. Early in its existence, Toyota took a stake in the California company, and Tesla provided Toyota with powertrains. As part of the partnership, Toyota acquired a Tesla stake for $ 50 million. Toyota later sold its holdings after Tesla 2010 IPO and the relationship ended.
Manley also said that FCA's pooling deal with Tesla would conclude in 2021.
"Our relationship with Tesla goes back a long way," Manley said. "It really has helped us. But FCA are absolutely committed to reducing CO2 emissions around the world."