Tesla continues to “make money” by selling emissions credits to other manufacturers
Tesla continues to make money by selling emissions credits to other manufacturers
Since 2009, Tesla has been able to generate revenue from the production of electric vehicles thanks to the discovery of a new revenue stream. The sales of emissions credits are to blame for this. A statistic that aims to lower the average emissions of vehicle manufacturers’ fleets; those above the set limits purchase emissions allowances from those who excess to avoid facing harsh fines from the government.
Tesla has amassed emissions credits through its exclusive production of electric vehicles, which it has sold in the US, Europe, and China. The previous year’s revenues came to $1.79 billion.
At first look, it doesn’t seem like a huge amount—just 1.91% of Tesla’s total earnings from the previous year, which came to 96,773 million dollars. Since its launch in 2009, the company has made about 9,000 million dollars in revenue.
But this income could be classified as money falling from the sky since Tesla does not have to do anything to achieve it.
The precise manufacturers and amounts purchasing these credits are unknown, but we do know about the cases of Volkswagen and Jaguar-Land Rover, which, despite their commitment to electric vehicles, failed to meet China’s emissions regulations in 2021 and had to purchase emissions rights. These manufacturers also include Stellantis, General Motors, and Honda. In 2022, Jaguar-Land Rover was forced to use this formula to avoid fines.
Something that informs us that we sell our electric automobiles in addition to investing. If not, legislation to comply with the existing loose emissions restrictions would benefit Chinese manufacturers that have chosen to use innovative technology and who also profit from selling emissions credits to Western companies, in addition to brands like Tesla.
Tesla anticipates maintaining its revenue for a while, even though fleets’ progress towards electrification will progressively slow down.
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