Tesla is about to lose one source of the regulatory-credit revenue that has been crucial to its almost two-year run of consecutive quarterly profits.
Stellantis, the automaker formed through the merger of PSA Group and Fiat Chrysler, said on Wednesday that it is exiting a European emissions-credit agreement with Tesla.
Complying with standards on its own will save the company about 300 million euros ($360 million), roughly two-thirds of which would have gone to Tesla, Stellantis Chief Financial Officer Richard Palmer said.
"Stellantis will be in a position to achieve CO2 targets in Europe for 2021 without open passenger-car pooling arrangements with other automakers," the company said in an emailed statement. A Tesla representative didn’t immediately respond to a request for comment.
Tesla has steadily increased sales of regulatory credits to carmakers that need help complying with emissions standards that are getting stricter in Europe, China and the U.S.
The revenue goes straight to the electric-car maker’s bottom line and has routinely exceeded net income on a generally accepted accounting principles, or GAAP, basis. Without the credit sales in recent quarters, the company would have recorded losses.