One of the more obscure segments of Tesla's business just got a little more transparent. Recent filings show that GM and Fiat Chrysler have purchased emission-free vehicle loans from Tesla, Bloomberg reported on Monday.
Tesla's ZEV loan program is no secret. The company has generated nearly $ 2 billion in revenue since 2010, when it began selling approval credits to automakers that had to offset the sale of polluting vehicles in the United States. This revenue stream has been praised by analysts and analysts for years, or criticizes the media debate as to whether this will help or harm Tesla's bottom line.
So far, however, little was known about who made the purchase and why ̵
Bloomberg noted Recent State Records in Delaware which betrayed a little more about Tesla's ZEV customers. GM and FCA both announced in separate filings with Delaware that they had entered into agreements on the purchase of greenhouse gas federal loans, also called ZEV loans, from Tesla. FCA has four separate applications that announce agreements to purchase loans from Tesla in 2016, 2018 and again this year.
Tesla declined to comment.
In the meantime, GM's first and only loan purchase was younger and with a specific mission in mind. GM is already producing a fully electric vehicle, the Chevy Bolt, and until recently built a plug-in hybrid, the Chevy Volt. These sales seem more than enough to offset the sales of its vehicles with exhaust emissions.
And that's it. GM claims this is an insurance policy against future regulatory uncertainties.
"We do not need credit for compliance today, but the purchase of credit is permitted by law and will be used as an insurance policy against future regulatory uncertainties," a GM spokesperson said in a comment sent by e-mail. "Submission is a routine process that protects interests in the performance of contractual obligations."
Typically, the ZEV credits were purchased to meet the more stringent emissions regulations in California (and some other states). GM's statements seem to be aimed at protecting Trump's government from federal regulations, including amid efforts to reduce fuel consumption and air pollution, which would probably be kinder to automakers.
But just like Bloomberg and even Tesla's own CFO Zachary Kirkhorn It is noted that these ZEV loans will make up a larger part of Tesla's business. A recent EPA report found that most major automakers in the 2017 model year used bank deposits along with technological improvements to ensure compliance. Three major manufacturers achieved compliance based on the emission performance of their vehicles, with no additional bank deposits under the EPA. The graph below from the EPA report shows how the automakers met the requirements.
However, according to the EPA, 92% of these credits expire at the end of 2021 when not in use. The EPA added that more than half of the current credit is held by three manufacturers and the availability of this or future credits is inherently uncertain, indicating that future ZEV credits will be awarded.