Tesla Could Receive $250 Million in California Environmental Credits This Year
May 7, 2013 10:30 AM
comment(s) - last by
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.
The Los Angeles Times
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RE: Air pollution?
5/7/2013 2:00:00 PM
Agreed. The lower the level of pollution the better, but to try to reduce pollution to zero would be ruinous and likely impossible. However I would argue we need to aim for 'healthy ALL year round' and 'very healthy MOST of the time'... or alternatively, as healthy as possible to the point of diminishing returns. The way you stated it, 'healthy for most of the year', implies there are unsafe levels of pollution at times!
This is the intent of these regulations from what I can see. They are aiming for a small percentage of vehicles to be pollution free which will lower the total pool of pollutant emissions. Depending on the type of electricity generation, even the 'emission free' vehicles may just be moving the emissions upstream to the power plants and supply chain needed to support power generation. But for the intent of reducing localized pollution having more zero emission vehicles will clearly help.
RE: Air pollution?
5/7/2013 6:13:09 PM
I wouldn't disagree with you on your goal. Sometimes you can get odd atmospheric conditions that can cause a high build up of air pollution. I guess it depends on how frequent that is.
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