Fiat Chrysler buys emission credits from rival auto majors

Fiat Chrysler Automobiles NV has bought US greenhouse gas emissions credits from rival automakers Tesla Motors Inc, Honda Motor Co and Toyota Motor Corp. The official details about payment on emission credits are not available.

The trading in credits is witnessing a robust growth rate throughout the year. Fiat Chrysler had a credit balance by the end of 2014. Without purchasing credits also, the company would have been emission compliant.

Fiat Chrysler has purchased 5.5 million emission credits from Toyota and Honda. Another one million credits from Tesla. The Environmental Protection Agency's (EPA) report states that Italian-American automaker has purchased emission credits worth 8.2 million megagrams.

One megagram is equal to 1,000 kilograms. Emission credits are calculated on emissions saved over legal requirements. Fiat Chrysler lags in fuel efficiency when compared with rival companies.

Reuters' report says the trading in emission credits rose by a whopping 400 percent in 2014. The government didn't announce the payment made on buying emission credits. Without acquiring additional emission credits also, Fiat Chrysler is able to meet compliance in the 2014 model year, said the latest report from Environmental Protection Agency.

Previously, Fiat Chrysler purchased 1.7 million megagrams of emissions credits from Tesla, Nissan Motors and Honda. Subsequently, Fiat Chrysler purchased another 6.5 million credits through the end of the 2014 model year, according to the report.

According to a report by Business Pundit, Fiat Chrysler has earned emission credits for its improvements in air conditioning system and other technology advancement.

Fiat Chrysler said it made significant strides, "often exceeding industry averages, in improving the performance of those types of vehicles most preferred by our customers."

Fiat Chrysler ranked last in fleet-wide fuel efficiency of 20.8 miles per gallon (mpg) for 2014 model year. Fiat Chrysler is forecast to tie General Motors at 21.8 mpg in 2015 for the last place, says EPA's report. Toyota sold emission credits for the first time.

Yahoo News reports that Daimler AG's Mercedes-Benz has acquired 1.4 million credits including 500,000 additional credits from Nissan. Without buying additional credits, Mercedes-Benz would be in deficit. It had 200,000 credits remaining at the end of 2014. Fiat Chrysler spun off Ferrari NV early this year. Ferrari acquired 175,000 credits and purchased 265,000 credits.

Tesla sold its entire stock of credits for 2013 and 2014 to Fiat Chrysler. Tesla earned $216 million from the credit sales in 2014 and $194.4 million in 2013.