Paul Cantrell
Does anybody out there know the •details• of how the Tesla carbon credit scheme works? I understand the basic idea:
- Regulatory standards say carmakers have to either cut emissions or buy “carbon credits.”
- Tesla can sell carbon credits because it makes EVs.
- Tesla makes more money selling carbon credits than it makes from selling cars…apparently? somehow?!
1/2
Paul Cantrell
My question: how can we knock out this income source as a part of #TeslaTakedown? Specifically:
- Does Tesla’s ability to sell carbon credits depend on units sold? or units manufactured? or something else? (i.e. do falling sales also cut into carbon credit revenue?)
- To what extent does this scheme depend on CA •state• regulations? (i.e. is this something we could lobby the CA gov to fix?)
- Does this regulation expire?
- Is there any apetite in congress for unrolling the carbon credits? Is that a good idea?
2/2
Paul Cantrell
And here’s my trademark 3/2 post:
- Who’s done serious auditing of Tesla’s carbon credits? Are we sure they’re not miscounting, double-counting, fraud-ridden? Who can look into that?
3/2
Paul Cantrell
@meltedcheese
This is not a carbon sequestration scheme, nor is it one of these “pay us not to cut down Amazon rainforest nobody was going to cut down anyway” schemes. Probably still a scam, but AIUI this is a different kind of carbon credit. Thus my questions.
David J. Atkinson
@inthehands I had no idea that Tesla was selling carbon credits. Carbon credits are a scam for corporations to avoid reducing greenhouse gas #GHG emissions. That’s it. So yes, this idea should go away. However, if a company can demonstrate that they are in fact sequestering significant amounts of GHG, then this should be rewarded in some way, but not at the expense of greater emissions by some other company. The book, “Ministry of the Future” by Kim Stanley Robinson has some good ideas along this line and lots of others too.
Paul Cantrell
@wrosecrans If that understanding is correct, then it seems like declining new car sales would eat their carbon credit lunch too.
wrosecrans
My best understanding is that Tesla doesn't take more money selling credits than selling cars, in terms of revenue. Cars is a bigger revenue source. But cars have less profit, cuz you have to build a whole car.
So they can sell a car close to cost. Then sell a carbon credit at basically zero additional cost and make pure profit, and that's where the operating profit comes from. Past that, I'm still vague on how the program is run.
Paul Cantrell
@nanobri
See here: https://mstdn.social/@wrosecrans/114203566425291476
Pup Sniff
@inthehands I don't think that's true. From their 10-K filing the automotive sales revenue is much larger than automotive regulatory credits.
https://www.sec.gov/Archives/edgar/data/1318605/000162828025003063/tsla-20241231.htm
Still $2.7 Billion is a hefty target
Michael Busch
If I understand correctly; there is an additional potential cost to Tesla:
If it sells fewer cars, it gets fewer carbon credits. Then it may end up paying a penalty to the other car manufacturers it had arranged to sell them to.
Some of this happens under EU rules: https://futurism.com/tesla-sales-carbon-credits-europe .
Paul Cantrell
@mwyman
The financials of Tesla have already come under serious doubt. If they’re doing the carbon credit accounting accurately, I’m a monkey‘s uncle.
Michael Wyman
@inthehands given how much Musk likes to talk about fraud, I’m guessing he’s projecting a lot…
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