Emissions, Tesla’s gold is green credits

The American company does not make money only from the sale of electric cars: so far, thanks to environmental credits, it has managed to “fix” many quarterly reports that otherwise would have been in the red

Margins on electric cars are starting to get attractive. Thanks to the decrease in the cost of accumulators, the final price of the Ev is aligning with that of the thermal counterparts. Tesla is the car manufacturer that has strongly believed in electric mobility since its foundation. Thanks to his guru, the histrionic Elon Musk, who was able to ferry the American company on a ride on the stock market, until it reached the highest value ever in terms of market capitalization. Shareholders see in Tesla innovation and the future and continue to reward it.

The “magic” of green credits

As we know, however, the problems facing a relatively young company like Tesla, which was founded on July 1, 2003, are manifold. The car sector in fact requires huge investments. In recent years, the American company has in any case been able to benefit from the “treasury” of green credits which, in 2020, brought the beauty of 1,580 million dollars into the coffers (351 million in the first quarter of 2020, 428 in the second, 397 in the third and 401 in the fourth). As reported by the Cnnover the past five years, offsets have generated a whopping $ 3.3 billion in profit. The sum from environmental credits allowed Tesla to “adjust” its quarterly reports, allowing it, for example, to close 2020 positively. Tesla has increased its green credit collections since California and other US states have increased the percentage of zero-emission vehicles imposed on manufacturers, compared to cars sold. A similar speech occurred in Europe, where manufacturers, to avoid the very high EU fines, must guarantee an average emissions of all cars registered each year not exceeding 95 g / km of CO2. The fine for those who overstep is 95 euros per gram of CO2 over the limit, multiplied by the number of cars sold in 2020 and 2021.

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Tesla thanks FCA

The only way companies have to avoid them is to increase electric and hybrid in their range. The now former FCA knows this well, which has bridged the delays in electrification by buying green credits from Tesla for about 1.8 billion euros. Through this financial operation, the FCA was able to count a portion of the American manufacturer’s electric cars as if they had been sold by itself. European law gives the possibility to buy “green credits” from other manufacturers.

A volatile source of credit

Tesla CFO Zachary Kirkhorn told CNN: “This is an extremely difficult area for us to predict. Looking long term, the profits from the sale of credits will not be a material part of our business, and we we do not plan our business around them. It is however possible that for other quarterly this rumor will remain strong. Or maybe not. “With the increase of electric competition, in the near future Tesla may no longer be able to rely on this source of income. which in recent quarters has had a significant specific weight.

European subsidies

Elon Musk is a polarizing entrepreneur who, thanks to his presence, always manages to extract favorable conditions for his business. It is an example of this the billion euros which it will receive from the German government and the Brandenburg region in support of the construction of the first European Tesla plant, known as Giga Berlin. This sum is added to the share that would be due to the American company, of a total of 2.9 billion euros, which the European Union has allocated to companies that will dedicate themselves to the manufacture of batteries in the Old Continent. This is the named program European Battery Innovation, which the EC has categorized as a Project of Common European Interest (Ipcei).

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The road cleared in China

Elon Musk was also very well received in Beijing. In fact, the entrepreneur managed to get a very advantageous agreement for the construction of the Gigafactory in Shanghai, obtaining authorizations in record time and benefiting from subsidized loans from credit institutions. In short, in living memory, considering that the “old” car companies struggled a lot before settling well in China, Musk, even in this case, managed to work a miracle. China will also be fundamental in the future because the new $ 25,000 economic Tesla will be designed inside the new research and development center.


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