As per Ben Kallo who is an analyst with the Robert W. Baird & Co. the FCA (Fiat Chrysler Automobiles) and their deal for pooling their fleet with Elon Musk’s Tesla is going to lower the average emission levels in the European countries is going to fund in an effective manner the Tesla Gigafactory4 which is going to be located in Germany.
FCA had been forced to seek this kind of a partner because it had been exceeding the average levels of emission of CO2 per kilometer which was at 95 grams in the European Union effective 2020 and this is going to result in the high levels of fines per every vehicle which is going to be sold. Fiat presently is not in the kind of position in the European markets for complying with these requirements that are extremely strict.
There is an estimate that the deal is going to be worth at a minimum of $2 billion till 2023 or a $150-$200 million in every quarter which is going to be lesser than the fines which it is going to incur for the exceeding of the emission limits and is not going to be enough to fund the Gigafactory4.
Tesla might be seeing this as a new stream of revenue which will begin from the 2020’s first quarter. This is going to be good news for Tesla which is already riding a high wave of momentum as this is just free money as the company sells only the zero-emission cars.
Fiat has plans of launching their maiden all-electric model in the European markets form 2020 onwards and this is going to include the new Fiat 500 from the second quarter of 2020.