U better get a better source of information about Tesla. Tesla sells emissions credit to other car makers because regulatory laws require car makers to meet certain emissions levels which they can't. Tesla makes billions selling these credits. Not because each car they sell is profitable.
New YorkCNN Business —
Tesla posted its first full year of
net income in 2020 – but not because of sales to its
customers.
Eleven states require automakers sell a certain percentage of zero-emissions vehicles by 2025. If they can’t, the automakers have to buy
regulatory credits from another automaker that meets those requirements – such as Tesla, which exclusively sells electric cars.
It’s a lucrative business for Tesla – bringing in $3.3 billion over the course of the last five years, nearly half of that in 2020 alone. The $1.6 billion in regulatory credits it received last year far outweighed Tesla’s
net income of $721 million – meaning Tesla would have otherwise posted a net loss in 2020.
“These guys are losing money selling cars. They’re making money selling credits. And the credits are going away,” said Gordon Johnson of GLJ Research and one of the biggest bears on Tesla
(TSLA) shares.
Tesla top executives concede the company can’t count on that source of cash continuing.
“This is always an area that’s extremely difficult for us to forecast,” said Tesla’s Chief Financial Officer Zachary Kirkhorn. “In the long term, regulatory credit sales will not be a material part of the business, and we don’t plan the business around that. It’s possible that for a handful of additional quarters, it remains strong. It’s also possible that it’s not.”