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

5w ago
28.1K

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 will be in a position to achieve CO2 targets in Europe for 2021 without open passenger-car pooling arrangements with other automakers,"

Stellantis

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.

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Comments (79)

    • 1 month ago
  • Carbon credits were stupid to begin with.

      1 month ago
  • These were the only things that made Tesla any profit (apart from recent Bitcoin speculation). Their cars alone, have always lost them money.

      1 month ago
    • In fairness to them, the loss "sorta" closed to a bit over $1000 per car shipped last quarter-- but that was helped by inventory sell-downs and some price increases.

      I personally follow Bob Lutz' observation that the car business, for...

      Read more
        1 month ago
    • Utter and total nonsense. Who on earth have you been getting this drivel from?

        1 month ago
  • Every big business is in the business of finance, no matter what they manufacture. Tesla sold green credits to save other companies taxes. Of course that wouldn't last forever once other car manufacturers started to produce their own EVs. Tesla knew this would happen.

      1 month ago
    • Musk should use Tesla to offset his Space X rockets emissions

        1 month ago
    • I found out that they burn Kerosene which is similar to Diesel. So I would love to know what the emissions are coming out of those every launch.

        1 month ago
  • Oh dear me, more anti-Tesla propagandist nonsense. I mean, the wretched Company has just released its last quarter earnings figures, like any publicly traded Company is required to do. There are even subject experts to whom one can turn to get the figures broken down and explained in detail. All this with but a few clicks of your mouse FFS. Then I get this drivel splattered in front of me! Certainly Tesla trades emissions credits to help other makers transition over to EV manufacturing, but it is but a very small part of its overall finances. Try here as a starting point, you could do a lot worse: www.youtube.com/channel/UCgYkuL87rUwiBl7tqfN53Eg and even this rather enthusiastic but very insightful young gent: www.youtube.com/channel/UC1LAjODfg7dnSSrrPGGPPMw . Even these guys are worth following because they speak in very easily understood and entertaining a way, despite actually being serious experts in the subject: www.youtube.com/channel/UCMFmrcGuFNu_59L0pHcR0OA

      1 month ago
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