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Fiat Chrysler Will Pay Tesla To Dodge Billions In Emissions Fines (theverge.com)
MDMurphy writes: While people have good and bad things to say about Tesla, one consistent thing has been that the cars emit zero emissions when operating. But in Europe, in exchange for cash, Tesla is merging its fleet with that of Fiat Chrysler Automobiles (FCA). The amount FCA is paying Tesla is presumably less than they would in fines if they were on their own. With this merging of the fleets, in Europe at least, a Tesla is no more clean than a diesel Fiat. "The Italian-American carmaker is behind on meeting the new standard, and the so-called open pool option available at the EU allows automakers to group their fleets together to meet the targets," reports Bloomberg. "Payments to Tesla, whose electric cars don't produce CO2 emissions, may amount to over 500 million euros, according to Jefferies."
Ars Technica reports on the strict new EU regulations: "From 2020, 95 percent of an automaker's new cars sold in the EU have to meet this target, with the remaining 5 percent falling under the law in 2021. And the penalties for failing are draconian: a $107 'excess emissions premium' per gram of CO2 over the target, for every single car registered in the EU that year. For some OEMs, this has the potential to be ruinous; if FCA's portfolio were the same in 2021 as it was in 2018, the automaker would have to pay some $3.12 billion, out of total net global profits of $4.1 billion."
Ars Technica reports on the strict new EU regulations: "From 2020, 95 percent of an automaker's new cars sold in the EU have to meet this target, with the remaining 5 percent falling under the law in 2021. And the penalties for failing are draconian: a $107 'excess emissions premium' per gram of CO2 over the target, for every single car registered in the EU that year. For some OEMs, this has the potential to be ruinous; if FCA's portfolio were the same in 2021 as it was in 2018, the automaker would have to pay some $3.12 billion, out of total net global profits of $4.1 billion."
Betcha didn't see that one coming
So, with Tesla being the only automaker who can realistically deliver cars and charging stations for fleets around the globe needing to meet standards in this way, perhaps it starts to become clear just how incredibly valuable Tesla is becoming...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
The pool was setup over a month ago. The timing of the announcement now amounts to a stock pump given the incredibly weak Q1 delivery numbers. It's all speculation at this point how much money these credits will net them, and it's not like they're going to be the only player. Many Chinese companies are going to be selling BEVs starting next year. $1 - $500M, over the course of 3 years, with very little credits needed to be bought this year. At most, FCA may have given Tesla some money immediately as a call, in the tens of millions, but if something like this has happened, where is the 8K that should be filed to show this? At most it may have helped payroll for a week, but does nothing to alleviate Tesla's immediate, existential threats.
If the Fiat is now "cleaner" how can the Tesla not be "dirtier"?
It's actually very simple to demonstrate.
I'll sit in a Tesla, with a hose running from its exhaust right next to my face, and you can do the same with a Fiat.
Then we turn on the cars and see who gets a better mileage.
It is THAT simple and easy!
Or... you know... you might want to learn to distinguish a metaphor from a thing it designates.
Particularly when it is in a form of a trademark which can be applied to a whole range of products, company policies, executives, stocks...
It also helps if you understand the concepts of taxes, regulations, reality, policy, incentives, subsidies... and a couple of others but those should do.
Mit der Dummheit kämpfen Götter selbst vergebens
I see little reason why Tesla should be taking accepting anything less than a billion euros. It's in the best interest of the world (and Tesla) if they make Fiat Chrysler really bleed to pay to avoid such a massive fine.
Anons need not reply. Questions end with a question mark.
his is just going to shift a bunch of money around at the top
Yes that is true.
What is also true is a bunch of that money is in fact shifting to Tesla, a company that not that long ago it was claimed was not viable.
Now it's the only company that can fulfill fleet requirements for large numbers of electric cars and infrastructure.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
" So what in the world was accomplished? "
Two things actually:
1) We got to see corporate lobbying in action. They effectively got themselves a loophole that would let them reduce their fines by 70% or whatever.
2) Even so, an electric car company got a big cash infusion paid for by a big polluter; helping increase the competitiveness of Tesla at the expense of Fiat.
It's effectively subsidizing electric car research, development and production, paid for by fiat ... which really means it's paid for by the people who chose to buy chryslers and fiats.
It also seems like this, at least, is precisely the desired outcome.
I think most reasonable people would understand a "viable" business to be one that is able to sustain itself in an undistorted market.
That also describes Tesla now since they are still maintaining sales even though tax credits have mostly evaporated for the cars they sell.
If you compare Tesla's to other cars the price they charge is really reasonable, especially considering what you save in gasoline and some other routine petrol engine related maintenance over time.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
It's surreal how bad and stupid political polarization has become, that we could have right wingers shunning and harassing Teslas and Tesla owners to make an anti-Democrat statement. It's not about being anti-science; it's just anti-Democrat, anti-left.
This is an AMERICAN car company that's spearheading this revolution. I happen to think that Elon Musk is annoyingly overrated, but I can't deny that he is basically the embodiment of every single pro-entrepreneur, pro-privatization, American dream cliche. American jobs. American pride. He's the same guy sending our satellites into space now; so why can't someone just drape an American flag over his shoulders and run with it?
I say this through grit teeth... personally, the hero worship of this guy really gets under my skin, sometimes it's even worse than Jobs, but that's just a pet peeve... from the standpoint of ushering in this revolution why aren't they calling Musk the next Henry Ford? It's in America's best interest for him to be leading this charge.
And yes, I said revolution. This SHOULD be a big deal, far exceeding its ecological implications. This really should be the biggest thing to happen to cars since the Model T. If battery technology can significantly improve and/or existing batteries come down in price a lot more, electric cars would offer huge advantages over the vast majority of diesel and gasoline vehicles on the road today. Electric cars should be significantly cheaper to build and maintain: lower operating temps, simple transmission, just fewer moving parts across the board.... I wouldn't be so surprised if in fifty years time we had electric cars capable of going millions of miles without needing a total rebuild.
And Tesla is also leading the charge with the other major automobile revolution--autopilot--which some day is going to lead to safer and much more efficient (i.e. fast) roads Which is a really big deal in a country as sprawling as America.
Also: the less the world relies on oil, the less money and power OPEC has. Aren't there still millions of voters out there who remember the oil crisis in the 70s? Is no one concerned about the prospect of the Salafi government in Saudi Arabia pulling even more money out of the ground? I for one wouldn't shed a tear if the wealth and power of the OPEC countries diminished. A couple years back even ISIS was managing to get their hands on oil money for a while there. Why can't oil independence be spun as a national security issue? So-called "Islamophobia" harnessed for a good cause, you might say.
But no... this would-be pride of American capitalism and security and optimistic futurism is instead just another pawn in the cultural proxy war.
Instead of something positive and bipartisan-y, liberals invariably lead with the negatives: First, by making some lazy and crazy comments implying human extinction (Don't go wildly exaggerating something that ordinary people already have a tough time perceiving! Sure, many species will go extinct, maybe some cities go underwater and we may have to switch crops and maybe worst case we lose a lot of seafood, but we're obviously never going to see mass starvation and human extinction unless something really far-fetched happens, like an extreme version of the clathrate gun effect or some other deadly positive feedback loop that for some reason was never triggered in past epochs.)
Second: the liberals will whine about America's sins and the sins of those running her. I know it's depressing, I know it is, but I really don't give a shit what Trump said. I don't need to see dozens upon dozens of posts trying to single out American carbon emissions as being particularly bad. I don't care if that's true or not; nobody needs to see that shit. It has nothing whatsoever to do with the actual solutions. Nobody wants to hear you whine abou
Tesla makes $60,000+ cars
Fake News, Tesla Hater!
Get your head out of three years ago... or wherever else it may have ended up.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
That's the point: it's meant to be ruinous. Or you clean up your act by improving the emissions output of your vehicles.
that we could have right wingers shunning and harassing Teslas and Tesla owners to make an anti-Democrat statement.
From the Reddit thread you linked to:
It's weird that guys like this think that people who drive expensive electric cars vote differently than they do. I only know 3 Tesla drivers, and they're all Republicans.
From a comment nearby:
A lot of guys I work with drive lifted up trucks. You'd think we were all redneck Trump supporters, especially since we are construction tradesmen. We are union and we vote for our paycheck and for our union. We are mostly all democrats.
Further points - none of the trucks have any right wing bumper stickers. All I can discern from the highest resolution photo is two of them have "Mint" logos, which I have not been able to match up with a company but it doesn't SOUND very right-wing.
To me this is way different than right/left, this is car owners just being jerks probably because they see Tesla drivers as elite - could honestly be either conservative or liberal or just lifelong members of the Asshole Party.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I'm getting a feeling that I'm not seeing a true Scotsman here.
Look, almost no market that exists is NOT distorted in some way or another. Trade tariffs? Market distortion. $457 million in federal grants to Boeing? Market distortion. Federal loans, loan guarantees and bailout assistance (not including repayments) $50,346,920,000 for General Motors? Market distortion. Any sort of taxation with redistribution of funds? Market distortion.
There do exist some markets that are not distorted, but you'll find them in places like Somalia.
So, what's your point again? You want to live somewhere that there is no government and the free market rules?
Does having a .50 cal mounted on the back of a Toyota pickup count as market distortion? Maybe a totally free market does not exist even in Somalia.
"The best part? I became an ordained minister while not wearing pants." -- CleverNickName
Because that's the only thing the auto industry knows how to do.
Disappointing.
Actually, by definition, their actions are conservative. âoe(of a person or a set of views) opposing political or social liberalization or reform.â
Fine, if you want to claim all Democrats are conservative, since they all oppose Trump reforms for example.
However since we live in the real world perhaps lay off the grammar nazi bit a little, Mkay? It just makes you look petty.
Rural areas (which it was) are dominated by Republican voters
If you bothered reading your own link you'd find it happened in Massachusetts. Huh, I wonder who carried Massachusetts...
Don't seem much for facts do you? Guess you are also a Conservative Democrat, since you hate having your mind changed from its unfactual representation to a more likely one...
Could one of them be a closet Democrat? Sure... but it's rather improbable.
Or in fact as I have shown with actual facts, rather likely and it's you who are conjuring up your political enemies as the hatemongers. But given your petty attitude at my offering corrections to help you, we find you are just another hate-filled bigoted liberal who assumes bad == Republican. Sad.
Because Tesla is green and liberals like green so therefore they hate Tesla.
As I said, just bigoted... some of the largest environmental support groups are composed of largely Republican hunters, and I myself am a fervent environmentalist (vastly more than any other poster on Slashdot I've ever seen).
I'll let you have the last post, since you are too conservative to understand or be convinced of what is really happening.... beyond my help at this time. Maybe eventually you will heal.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
You do know traditional car makers are also making coal powered cars now, right?
You know that not every body lives in China, India or Austalia, right?
( ^- the part of the world that have such a horrible mix of power sources for their electrical networks, that it doesn't make any difference if the car burns fossil fuels locally itself, or if power stations burn fossils centrally to charge the car's battery)
In most of the rest of the world, even countries where part of the electrical grid is still powered by burning fossils (hello USA !), the electrically-powered cars are still offsetting some of the emissions.
And now if you take into account countries which rely more on cold-climate hydro (hello, lots of parts here around in Europe), complement their source with solar and wind (ditto), or even nuclear (still a lot less polluting than coal, despite all its associated drawbacks - hello France), there are lots of countries where electric vehicles are a lot less pollutting.
By some historical chance, these countries also happen to be more densely populated, meaning that even models with less range than Tesla's are actually useful.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
this is just ouragous to me; instead of investing €500m in developing a better engine, they just fool the system.
ofcourse the system allows it, and they should really close this loophole.
if they can't make their engines cleaner, well bad luck, plain and simple.
perhaps they can buy engines from somebody who can actually get their act together to put in their cars, instead of these scandalous tactics. this is nothing new and is done all the time, it can't be more expensive then paying the fines (or €500m).
On a long enough timeline, the survival rate for everyone drops to zero.
Whilst paying Tesla may reduced the size of the financial penalty, they are in effect subsidising a competitor. It might be more economic in the long run to pay the EU fine.
Donte Alistair Anderson Roberts - hi son!
Karma: Chameleon
"Does having a .50 cal mounted on the back of a Toyota pickup count as market distortion? "
The poor and rich alike may mount a .50 cal on the back of their Toyota pickups.
Why do you think that external revenue streams are a distortion but external costs are not?
Chrysler-Fiat is a victim of the pique of its late chairman Sergio Marchionne, who pooh-poohed electric cars for years, not for any substantive reason but just because he took personal offense at the idea of governments telling him what kind of cars he had to produce and sell. He even famously dissed CF's own Fiat 500e, which is actually a pretty nice car, I personally like it better than any of the Teslas. But the point is to subsidize EVs at the expense of large, heavily polluting gas and diesel vehicles, and CF paying Tesla does just that, so seems to me this is just the law working as it should.
Trade tariffs? Market distortion. $457 million in federal grants to Boeing? Market distortion. Federal loans, loan guarantees and bailout assistance (not including repayments) $50,346,920,000 for General Motors? Market distortion.
And people around here regularly bitch about every single one of these examples. But in those discussions, posts along the lines of "dude, distortions and corruption are everywhere... shut up or go live in the bush" get modded all the way down, not all the way up. Fascinating, isn't it? It's enough to make one think the real issue is not that people really want less-distorted markets, but that people just want the distortions to be directed to their team rather than others'.
[Speaking of distortions, maybe Slashdot should bow to the times and add a "-1, Wrongspeak" option so the mods can stop twisting the existing categories?]
The market remains distorted.
You need a market to be distorted, for your own sake. Free Market is a term that is completely misunderstood. People think it means "Perfect Market". It doesn't. A market is only a perfect market with complete regulation. Free Markets have only a single stable point: Complete monopoly with the consumer getting screwed.
If FCA wants to maintain their profits, they'll have to raise prices to offset the money they're paying Tesla.
If Tesla wants to maintain their profits, they can lower prices.
If FCA prices are higher and Tesla prices are lower, there are probably some people who will decide to buy a Tesla instead of an FCA.
> With this merging of the fleets, in Europe at least, a Tesla is no more clean than a diesel Fiat.
That's total bunk. Tesla is effectively selling the clean energy credits. They have an excessive amount of them. They've been doing this in California for years. This doesn't make a Tesla "no more clean than a diesel Fiat".
I for one hope that FCA doesn't buy Tesla. FCA doesn't have the best track record regarding quality and I think "they don't get it" - it would kill Tesla as they try to move from Jogging to Running.
People down the middle don't care about your (valid) arguments, many don't know who Tesla is. The two ends are fighting against each other to an unknown end. You can say "told you so" when the water in NYC is knee deep.
One side feels that it's all about government control. Raising taxes (carbon tax) and trying to control your life - therefore they fight back at every attempt to suggest we need to go clean because it's seen as nothing more than propaganda to drive the first concern. "Liberals want your tax dollars and will do anything to get them. Even construct fake environmental concerns." The earth is flat! Flat I tell you! All of the bickering and lack of trust has lead to a basic disbelief in knowledge.
The European system was apparently *deigned* to allow and *encourage* this.
It's the same notion as "emission credits" that tend to create more economic output for the same amount of pollution by allowing the "right" to emit to be sold to someone who can make better use out of those emissions.
Here, it changes the industry incentives: when an electric can "sell" in this way, it creates a subsidy from the polluting producer to the clean company. This is *no* different than a reduction in the cost of steel or other components.
Net result is that the price of a fiat goes up to cover this, while the price of a Tesla goes down, meaning more Tesla and less Fiat, and thus less pollution.
Overall, this kind of system yields better results than specific mandated solutions.
hawk, displaced economics professor
This is what we call a carbon market. It's the goto proposal by the left for how to fight climate change. American liberals point to these policies as an example for the U.S.
Why does the title and summary sound so menacing?
I should have been more clear that I don't let Musk/Tesla leadership off the hook by ANY means, but it was a long enough post as it was. (And Musk criticism is usually heavily modded down around here.)
The economy of batteries is the bottleneck and also the big question mark... I don't know what the bottom line is there. Prices have fallen significantly more than I would've expected, so future Li Ion battery prices might depend entirely on lithium mining and refining. I think I heard most of the word's lithium comes from a desert in Chile or something? Too lazy to look it up. But it MIGHT be that we don't *need* a battery revolution; what we have now might be fine, we just need for the economies of scale to kick in.... we may just need someone to build a huge enough mining/refining operation. The other (non-mutually exclusive) option is tech like nanowire that's supposed to be ZOMG amazing but has been vaporware for decades.
But either way, it's something that could benefit from a huge hype campaign. And I blame Musk, Tesla leadership, the politicization of Tesla (and the accompanying lack of rah rah rah patriotic politicization), etc.
The issue of batteries, and any other electric car hiccups, are things that could likely be solved with major business partnerships, major investment based on perceived mass demand, governmental involvement (grants to refine nanowire tech, whatever). I think best case scenario, we could have made waves and get people buying more new electric than gas cars in a matter of perhaps 10 years. (But the way things are going now, I can't imagine electric outselling gasoline within the next 30 years, and I wouldn't be surprised if it takes more than 50.) Re: global warming, those decades could make a difference! And as I said in my original post, there are a bunch of other economic benefits that electric cars should bring, particularly in a country like America with its suburban sprawl.
Tesla isn't what it could be; that's really all I was saying. The ingredients are all there for it, but no one is pulling really hard for it to be revolutionary or patriotic or inspiring and that's a HUGE shame. Musk pisses me off to no end because he pisses away his free media spotlight time on his least-important ideas (Hyperloop, underground roads, and yes SpaceX to be pretty non-revolutionary in the big picture.)
That's basically 1) again.
I have to conceed, I was basing my reply on old numbers (back then China, India and Australia were still in the "doesn't matter if it is EV on coal electricty or ICE on petrol" category), apparently things have improved since and even China (the worse of above) has made efforts and even there nowadays EVs are slightly better than petrol.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]