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Cameron’s Blog: Did Tesla just Save Alfa Romeo?

Hear me out on this. I know that on Enzari, Tesla probably aren’t the most popular car brand. I know for certain, they’re not mine…

However with that thought in mind, they may well have just saved FCA from having to cut Alfa Romeo and Maserati from their lineups. Therefore, the next time you’re buying an Italian car, and you’re looking at either of these brands, without Tesla, you might not have been able to have purchased a car from either of these historic car makers.

 

The EU and Emmisions

The environment has become a topic of debate within politics for a few years now. As sad as it is for us “petrolheads”, cars that run on fuel derived from oil (diesel and petrol) are bad for the environment. We know this and, as a re

sult, both the UK government and governments across the world want to get rid of petrol cars altogether. However, we are far from being at the stage where this is even viable. However, to try and make car manufacturers speed up the process of removing fossil fuels, the EU have regulations on the average carbon dioxide emissions that manufacturers produce across their fleet of vehicles.

So why are these regulations important for car manufacturers? Well, quite simply, it is absolutely paramount that manufacturers follow them, unless they want to receive hefty fines. When a manufacturer sells cars in the EU, if they are 1 g/km over the target, they will be fined €95 for every car they make. This value increases by €95 for every g/km of CO2 over the target they are. The current target is 95 g/km. Therefore, if a manufacturer produces 1,000,000 cars per year, and their cars produce 96 g/km of CO2 on average, they will be fined €95,000,000. No company, therefore can be over the threshold, especially considering that the fine will be every year that you’re over the emissions target. So where did these regulations leave FCA.

The Problem of Alfa Romeo and Maserati

FCA are one of the largest car manufacturers in the world. They account for both Fiat and Chrysler. So therefore, in addition to these brands, they also account for Alfa Romeo, Maserati, Abarth, Lancia and some others that come under Chrysler. However, none of these brands really make cars that would appear to produce low amounts of CO2; considering that currently only Fiat produce anything that is close to 95 g/km of CO2. This would spell disaster for FCA, considering things aren’t much better from Chrysler’s total emission figures. This alongside Alfa Romeo and Maserati not being profitable currently would really suggest that FCA would have no other option but to cut the brands from their lineup. Losing money, alongside huge fines, would kill Alfa Romeo and Maserati.

So, What Have Tesla Done?

There is a way around these regulations for manufacturers. For example, if you are worried about manufacturers such as Ferrari, don’t be. There are regulations for “small volume manufacturers”, meaning that they can have their own target, subject to approval from the EU. However, as they are part of FCA, this isn’t possible for Alfa or Maserati. However, there is a rule allowing for “Manufacturer Pools”. Such pools allow for manufacturers to group together with other manufacturers, allowing them to meet their emissions goals. This is perfect for a manufacturer such as Tesla. As their average emissions are 0 g/km, being able to pool with Tesla is extremely valuable. FCA and Tesla reached an agreement, reportedly for $2 billion dollars a year, for the manufacturers to be in a pool together. This may seem a lot, but considering how huge fines can become, this could be a small price to pay Tesla.

 

What Does it Mean for Me?

Well, for now, it means that some of the most iconic Italian car brands remain. It also gives time for FCA to restructure; to try and make struggling brands profitable. However, in my opinion, this pooling deal won’t be allowed forever. Therefore, Alfa, Maserati and Abarth must meet the targets set by the EU soon; otherwise we could be contemplating a world without them. So yes, Tesla have saved Alfa Romeo and Maserati. As much as I fear the day that such prestigious manufacturers turn to batteries or hydrogen, if we want these companies to survive, they must meet regulations.

New Giulia and Stelvio Quadrifoglio 2020 Models Demonstrate Strength of Alfa Romeo…

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