Fiat automobiles has agreed to pay several hundred million euros to Tesla, so the latter is counted in its fleet in a move to avoid violating European Union emission regulations.
However, neither of the companies haven’t yet disclosed the terms of the deal or how Fiat would make payments to Tesla.
According to Financial Times, the step will help Fiat bring down its carbon emission levels to permissible limit by pitting it against Tesla’s.
Tesla itself has made over $1 billion in the last three years by selling emission credits all over the U.S. Regulations allow a manufacturer of zero-emission vehicles to earn credits and sell excess credits to other manufacturers.
This has also allowed Tesla to report quarterly profits when otherwise it would have been losses. The company reported a poor sales result in its first quarter, as it struggled to roll out its new Model 3 delivers over transit issues.