Honda Motor Co. has followed Fiat Chrysler Automobile’s (FCA) lead in partnering with Tesla to comply with strict emissions standards in Europe.
In 2019 FCA inked a $2 billion deal with Tesla in which the automakers would pool their sales in Europe. This would allow FCA to lower the average emissions from their fleet, thereby skirting by fines that would otherwise be levied for not selling enough zero emission vehicles.
Today, Bloomberg is reporting Honda, which just one EV on the market, is following a similar strategy instead of developing more EVs of their own.
“Honda was newly added as of last week to a European Commission filing in which manufacturers declare their intent to join together in meeting greenhouse-gas emissions standards.”
Unlike the deal with FCA, no financial details of the agreement have been revealed.
Selling regulatory credits to other automakers who don’t make enough zero emission vehicles is a regular, and large part of Tesla’s quarterly earnings. In 2019, Tesla added $594 million to its bottom line, increasing from $419 million in 2018.
Up to Q3 2020, Tesla has already amassed $1.179 billion in “free” revenue from other automakers.