Tesla set to lose major revenue source that's been key to profits
Sales of green credits and bitcoin earned Tesla more money than the sales of cars, now, Tesla is about to lose a major part of its green credit sales
For the first quarter of 2021, Tesla posted a pre-tax income of $533 million. Of which, $518 million came from the sale of green emissions credits to other manufacturers. Needless to say, this rather unpublicized side of Tesla's business is instrumental to its survival as a company.
But now, Tesla is about to lose a significant part of its regulatory credit revenue.
Stellantis NV, formerly FCA, announced earlier today that it would be exiting an emissions-credit agreement with Tesla. In doing so, Stallantis will save roughly $360 million. $240 million of which will have gone to Tesla, Stellantis Chief Financial Officer Richard Palmer said.
"Stellantis will be in a position to achieve CO2 targets in Europe for 2021 without open passenger-car pooling arrangements with other automakers," the company said in a written statement.
I have long maintained that Tesla's business model is not as it appears on the surface. Simply building and selling the Model S, X, 3, and Y has proven to be an unsustainable business model. As such, Tesla has been steadily increasing its sales of green credits to other manufacturers, credits which will eventually run out. Regardless of whether or not automakers begin pulling out of their agreements with Tesla.