According to a recent SEC filing, Tesla made $1.79 billion in regulatory credit sales last year. This profit was due to the failure of rival companies to sell enough electric vehicles to meet emission regulations. Businesses in the US, Europe, and China regulate environmental standards to meet emission requirements.
Tesla’s prediction of the credits drying up was disproved by the recent revelation that earnings from their regulatory sales are slowly increasing. Despite facing competition from China, where BYD overtook the company as the world’s top seller of electric vehicles early in the year, Tesla still sees increased sales and profits from regulatory credits due to their rivals scaling back EV plans.
In 2009, Tesla’s income from these sales totaled almost $9 billion, according to Bloomberg. The company’s lead in the electric vehicle market is being threatened by competition, but this has only led to increased demand for their products and services.