Fiat Chrysler Automobiles has entered into an emissions pooling agreement with Tesla in order to avoid fines for violating new European Union emissions rules.

The two carmakers reached an agreement that is reported to be worth hundreds of millions of Euros, according the Financial Times.

The agreement means FCA can count Tesla registrations in its overall sales, bringing down its average fleet emissions.

By 2021, manufacturers need to achieve an average fleet emissions figure of 95g/km or face a fine of 95 Euros multipled by their total volume for every gramme over target.  

According to PA Consulting, FCA’s average fleet emissions were 120g/km last year and, prior to this announcement, was expected to be 6.7g/km over the target in 2021.

Emissions pooling is allowed under EU rules and enables groups, such as PSA Group, to count all the emissions across its various brands together. This means one brand with lots of EVs and hybrids can offset another one with peformance cars or SUVs.

Separate brands are also allowed to apply to form pools.

FCA has been lagging behind its rivals in the development of electric vehicles but plans to spend €9bn (£7.75bn) in the next four years to develop electric cars. Unfortunatly they won't come to market in time to avoid the penalties.

Most manufacturers are rushing to get electric and plug-in hybrid cars to market in order to reduce their emissions, but battery supply issues are stunting growth.

Tesla, which only sells zero-emission vehicles, has made more than £765m in the last three years by selling emissions credits to other manufacturers in the USA.

Currently, Toyota is the brand with the lowest overall emissions, according to JATO Dynamics, achieving 99g/km.

More articles on: