Hyperdrive
Fiat Will Effectively Fund Tesla’s German Factory, Baird Says
Photographer: David Paul Morris/Bloomberg
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Fiat Chrysler Automobiles NV’s deal to pool its fleet with Tesla Inc. to comply with stricter emissions rules in Europe is in effect funding the electric-car maker’s upcoming Germany factory, according to Robert W. Baird & Co.
The Italian-American automaker reached an agreement with Tesla last spring that could cost Fiat Chrysler an estimated 1.8 billion ($2 billion) through 2023. That breaks out to about $150 million to $200 million per quarter and will pad Tesla’s profit margins starting in the first three months of this year, according to Baird analyst Ben Kallo.