Funding Tesla Angers Automakers That Need Electric Car Credits
Sep 25, 2017  John Lippert,Ryan Beene  (Bloomberg)

Tesla Inc. has generated nearly $1 billion in revenue the last five years
from an unlikely source: Rival automakers. The payments are part of an
unpopular system in California that’s poised to proliferate elsewhere.

California requires that automakers sell electric and other non-polluting
vehicles in proportion to their market share. If the manufacturers don’t
sell enough of them, they have to purchase credits from competitors like
Tesla to make up the difference.

Tesla, which exclusively sells battery-powered models, sold $302.3 million
in regulatory credits last year alone. China and the European Union -- two
of the world’s biggest auto markets -- are considering mandates and credit
systems similar to California’s. If California is any guide, automakers will
resent having to buy from peers, including the electric-car maker led by
Elon Musk.

“It really makes them mad that Tesla got so much of a boost out of being the
only purely electric car manufacturer out there,” Mary Nichols, the chair of
the California Air Resources Board, said in an interview Friday at
Bloomberg’s headquarters in New York. “In effect, they helped to finance
this upstart company which now has all the glamour.”

For all the flack California has taken from traditional carmakers for how
its mandate system has benefited Tesla, Musk also has been a critic. Tesla’s
chief executive officer last year said the Air Resources Board was being
“incredibly weak” and called its standards “pathetically low.” Rules should
be tougher and the credits should be worth more, he said.

“Nobody’s happy,” Nichols said. “That’s my mantra.”
[© 2017 BloombergQuint]

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