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No other automaker is receiving what California is giving Tesla

Tesla's financial standings have climbed out of the red largely due to the state of California's environmental credits, which could add another $250 million to the automaker's bank account. 

The state of California has set up a system of Zero Emission Vehicle credits, which aims to push the adoption of electric vehicles by offering federal and state incentives to both automakers and consumers.

Under this system, Tesla can receive about $35,000 - $45,000 extra on each sale of its Model S sedan. Wall Street analysts predict that these credits (which can be sold to automakers that don't produce EVs) could send as much as $250 million to Tesla this year. 

This goes to show the importance of clean vehicles to the state. Its Air Resources Board wants electric vehicles to make up 15 percent of new car sales by 2025. Currently, they make up less than 1 percent.


Many automakers have fought California on its strict environmental regulations, saying that they want to create green vehicles on their own terms without being bullied by regulators. However, Tesla has managed to meet California's standards and is benefitting significantly from it.

In fact, these environmental credits are a large reason as to why Tesla will be able to announce a profitable quarter come Wednesday for the first time.

"We are in the air pollution business, not the car business," said Mary Nichols, chairwoman of the Air Resources Board, which has broad control over environmental policy in California. "There is some jealously of Tesla going on here."

Tesla has come a long way to get where it is now. After problems in the past like Model S shipment delays, a run-in with a poor review from The New York Times, and a production delay of the Model X, Tesla managed to get up and dust itself off.

Tesla began shipping 500 Model S' a week in March, exceeding the sales outlook of 4,500 posted in the February shareholder letter. 

It later announced that the company would be able to pay off its $465 million government loan within five years, and that this current quarter would be its first profitable one
 
Tesla is looking to keep that momentum, as well. Tesla CEO Elon Musk has been fighting for a Texas electric vehicle sales bill (House Bill 3351), which would allow distributors and manufacturers of electric vehicles only to sell directly to customers without the use of dealerships. Musk called this bill a matter of "life or death" for Tesla. 

Source: The Los Angeles Times



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RE: CA
By boeush on 5/7/2013 11:41:18 AM , Rating: 3
TESLA Motors employs ~3000 Californians (many of them quite highly paid), is growing rapidly, and contributing to development of high technology and clean-air vehicles that will continue paying dividends to California for many decades to come.

TESLA had 2012 revenues of >400 $million, while spending >800 $million. That money is circulating within California's economy. As TESLA grows its revenues, more and more of that money will be coming into the state, from out-of-state customers.

Short-sighted analyses invariably miss long-term strategic benefits.


RE: CA
By Spuke on 5/7/2013 11:50:19 AM , Rating: 2
quote:
Short-sighted analyses invariably miss long-term strategic benefits.
My roads are still sh!t. Ignorance is bliss.


RE: CA
By boeush on 5/7/2013 12:17:38 PM , Rating: 2
My roads are pretty decent and slowly getting better in most places, with only a couple of (admittedly egregious) exceptions, and there's road construction and highway expansion going on everywhere I look (and I do live in CA, specifically SF Bay Area.)

OTOH, I heard it was going to rain up in the Sierras tonight...


RE: CA
By Spuke on 5/7/2013 12:25:46 PM , Rating: 2
Well ALL of SoCal roads are crap. Ever been to AZ, they've probably repaved their entire freeway system 6 times in the 15 years I've lived in CA. I can't remember the last time I saw a freshly paved road in CA. Seems like we aren't "getting our fair share" down here.


RE: CA
By lelias2k on 5/7/2013 12:43:51 PM , Rating: 2
Careful when using absolutes. I've lived in San Diego for 11 years (2001-12) and have seen an enormous amount of work done to the roads. Most of it was expansion, but there was a lot of repaving done too.

Also, it is hard comparing a state with almost 40 million people in it to one with less than 7 million. You have almost six times more people living in California in an area less than 50% bigger. So that creates a whole new set of challenges.

Could things be better? They always can! But they are not as bad as you're making they sound. I lived in Georgia before and travelled throughout the US and the world, and I still love California.


RE: CA
By Spuke on 5/7/2013 1:20:36 PM , Rating: 2
quote:
So that creates a whole new set of challenges.
Excuses, excuses. Since we have 6 times more people, we should have 6 times more money to fix these damn roads with especially with the revenues the state is pulling in. Seriously, where are these freshly paved roads? I haven't been to SF for 10 years so you got me there but I visit SD at least once a year and the roads are crap there too. Temecula crap, LA crap, Palm Springs crap, Bakersfield crap, Santa Clarita crap, The Valley crap. All crap. AZ just finished up a major expansion to the 17. God it's like driving on a pillow. Not the pissed off, recently clipped, bull ride that CA's sucky roads are.


RE: CA
By yomamafor1 on 5/8/2013 10:59:37 AM , Rating: 2
First of all, 6 times more people = 6 times more money is just bad math. It depends on income distribution, % of tax, % of employment, and number of tax breaks.

Secondly, fresh paved roads? How about 680 South from Dublin to Fremont? How about 880 from Fremont to San Jose? How about 101 from San Jose to San Francisco?

Just because you don't see it, doesn't meant it doesn't exist.


RE: CA
By lelias2k on 5/8/2013 11:21:58 AM , Rating: 2
Excuses? Are you kidding me? Do you have any idea how different it is for a road to support a 16-wheeler passing by at 60 mph than one that stops and go constantly? The amount of deterioration that the latter causes demands that the road be much stronger, and the traffic around CA is ridiculous. Plus, CA has about 50% more cars per capita than AZ, which translates to more vehicles on the road (it has about 10 times more cars than AZ), which translates to faster deterioration.

Also, CA, in case you haven't heard, is prone to earthquakes. That can't be good for the pavement, can it?

Finally, as I said, most of the work has been towards expansion. Look at the 15 now and look 10 years ago. The 5-805 merge. The 56 is finished, the 125 too. If you haven't noticed, you're either blind or just fooling yourself.


RE: CA
By BRB29 on 5/8/2013 11:24:04 AM , Rating: 2
It's not excuses. The cost of repaving high traffic roads is exponentially greater. They have to make a temporary road if possible to do a reroute and expand a lane or two. That's the problem with higher pop density. They also have to deal with much more complexity of telecommunications lines and whatever is buried. They have to work mostly at night.

In a low pop density area. They can just shut down the road and wouldn't cause any problem.


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