General Motors and Fiat Chrysler purchase US emission rights

Author: Duran Sarikaya
Date: 06.06.2019

Tesla earns billions with certificates

Due to stricter emission regulations, car manufacturers are forced to negotiate with their competitors. According to reports, General Motors (GM) and Fiat Chrysler (FCA) are now cooperating with Tesla. GM and FCA are buying emission rights from Tesla in order to comply with the strict exhaust regulations despite the vehicles’ weak environmental balance.

GM and FCA informed themselves about the deals earlier this year, according to the financial service Bloomberg. The relevant documents were filed in the US state of Delaware and are available to the financial service. Although they do not disclose much information, this is the first time that car manufacturers have admitted that they have contacted Tesla to comply with strict US environmental laws.

Since 2010, the electrical pioneer has generated sales of almost two billion dollars through the sale of emission certificates. Manufacturers who offer few e-cars can optimize their carbon footprint by purchasing the allocated emission rights from their competitors.

Certificates – an effective tool

A GM spokesman confirmed the cooperation and explained that the car manufacturer wanted to prevent “future regulatory uncertainties” in this way. FCA commented that as long as the US environmental regulations do not coincide with the demand for cars on the market, the purchase of the certificates is “an effective tool”.

GM and FCA have made a mark in the USA with the sale of heavy SUVs and pickup models. Their combustion engines consume a comparatively large amount of fuel and therefore emit more exhaust gases.

Tesla didn’t comment on the deals. In April, the Financial Times reported on a planned CO2 trading company between Tesla and a European company. According to the report, FCA wanted to pay Tesla hundreds of millions euros for the certificates in order to comply with EU emission regulations.