Fiat Chrysler mentioned Wednesday on an earnings name that it spent EUR 300 million (US $362 million) on regulatory credit final yr in Europe alone — most of which it purchased from Tesla.

The automaker is now a part of Stellantis, fashioned in January by a merger of Peugeot father or mother PSA Groupe and Fiat Chrysler. Stellantis CFO Richard Palmer mentioned on the decision that the corporate expects to spend barely lower than EUR 300 million in 2021 on credit to keep away from fines for CO2 emissions.

“We had prices of credit in 2020 of round 300 million for Europe, most of which have been Tesla,” he mentioned, including that spending will probably be decrease “however not considerably” this yr. (Palmer was beforehand Fiat Chrysler’s CFO.)

In 2019, FCA dedicated to spend about $2 billion on environmental regulatory credit via the top of 2021.

Automakers who battle to satisfy stringent CO2 emissions requirements in Europe should purchase credit from less-polluting auto firms to satisfy new emission limits, or to decrease their penalties if they don’t keep throughout the requirements.

Promoting these regulatory credit has been an more and more necessary a part of Tesla’s enterprise because the automaker has pushed towards sustained profitability. In 2020, Tesla generated $1.58 billion in income from gross sales of regulatory credit, almost tripling its 2019 determine of $594 million. That is higher than the corporate’s revenue of $721 million reported in 2020, which was its first worthwhile yr.

Fiat Chrysler just isn’t the one automaker shopping for these credit from Tesla. For instance, Honda dedicated to purchase credit late last year, in response to Schmidt Automotive Analysis.

As extra automakers manufacture and ship electrical automobiles of their very own, and in larger numbers, fewer ought to have to depend on Tesla credit to satisfy environmental requirements, even in strict states like California or areas like Europe. Nevertheless these requirements could develop extra stringent, too.

On its latest This fall 2020 earnings name, analysts requested Tesla execs for steering on regulatory credit score gross sales in 2021. CFO Zachary Kirkhorn mentioned, principally, the gross sales have been too unpredictable to supply shareholders any concrete expectations.

“That is at all times an space that is extraordinarily troublesome for us to forecast. 2020 regulatory credit score gross sales ended up being larger than our expectations, and it is troublesome to present steering on that,” Kirkhorn mentioned. “What I’ve mentioned earlier than is that within the long-term regulatory credit score gross sales won’t be a cloth a part of the enterprise and we do not plan the enterprise round that. It is potential that for a handful of extra quarters it stays robust. It is also potential that it is not.”

He famous that the majority of Tesla’s regulatory credit score income from the ultimate quarter of 2020 was “not lined up previous to the start of the quarter.” Credit score gross sales income got here from “discrete offers that have been struck over the course of the quarter.”

A spokesperson for Stellantis declined to touch upon Wednesday when CNBC requested for additional particulars. A monetary submitting is predicted from the corporate quickly.