Earlier this year, Fiat Chrysler and Peugeot parent PSA group merged to form Stellantis.
According to CNBC, Fiat Chrysler spent nearly 300 million euros ($362 million USD) last year on regulatory credits in Europe, most of which were purchased from Tesla. This was before merging with Peugeot PSA to become Stellantis, though the company’s plans to buy regulatory credits have not changed.
In an earnings call, Stellantis CEO Richard Palmer said the company plans to spend slightlyless in 2021 on regulatory credits, in order to avoid fines for CO2 emissions.
Palmer, who was previously the Fiat Chrysler CEO and is now in the same position at Stellantis, said, “We had costs of credits in 2020 of around 300 million for Europe, most of which were Tesla.” Palmer predicts that consumer spending will be lower than last year, “but not significantly” lower.
Selling regulatory credits is a significant portion of Tesla’s business model in Europe, and has even been criticized by Toyota for its sale of credits last year, with the electric vehicle (EV) company having yet to become annually profitable on the continent were it not for the sale of its regulatory credits to bolster its automotive margin. In 2020, Tesla generated $1.58 billion (USD) in revenue from the sale of credits.
A financial filing is expected to come soon from Stellantis, and the number of credits sold by Tesla to companies like Stellantis and Honda will begin to decrease as companies go more electric in years to come, reducing reliance on regulatory credits to avoid extra fines from CO2 emissions.