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Main Forums => The Roundtable => Topic started by: Nick1911 on April 01, 2021, 10:28:45 AM

Title: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: Nick1911 on April 01, 2021, 10:28:45 AM
Bit of an interesting article:  https://www.fool.com/investing/2021/01/30/teslas-profits-are-not-from-selling-cars/

Quote
To be clear, Tesla did report a profit for 2020, under generally accepted accounting principles (GAAP), marking the company's first full year of profitability. But that profit did not come from the core business of manufacturing cars. Tesla booked a whopping $1.58 billion of revenue from selling regulatory credits last year, more than the previous three years combined. Tesla's net income of $721 million in 2020 turns into a substantial loss if those regulatory credit sales are backed out.

It seems the company would be heavily in the red if not for the legal environment that allows them to sell regulatory credits to other automakers.
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: HankB on April 01, 2021, 10:39:07 AM
Regulatory CREDITS? Really?

You know the economy is in trouble if the government has arranged for the sale of imaginary products for real money, enabling them to make an enormous profit without delivering anything tangible.

(For some reason, I'm reminded of the old joke in which three men of a particular ethnic group were shipwrecked on an island, and passed the time trading their hats back and forth with one another. When they were rescued a year later - each was a millionaire.)
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: fifth_column on April 01, 2021, 11:41:55 AM
Regulatory CREDITS? Really?

 . . . the sale of imaginary products for real money, enabling them to make an enormous profit without delivering anything tangible.

Sounds like the definition of the insurance industry to me . . . .
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: Angel Eyes on April 01, 2021, 11:54:29 AM
Sounds like the definition of the insurance industry to me . . . .

I am reminded of the Catholic Church's sale of indulgences, which Luther and other reformers condemned.
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: MechAg94 on April 01, 2021, 11:58:43 AM
Just wait until Democrats manage to pass CO2 credits like they wanted during the Obama years.  Some Democrats were heavily involved setting up exchanges to take care of that once it passed. 
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: sumpnz on April 02, 2021, 12:14:41 AM
The sale of the regulatory credits has really been their core business model all along.  Once those run out (and Elon has been pissing off enough people that just might finally turn off that spigot) the illusion of them having a strong business will evaporate.

I haven’t checked in a while, but if Tesla isn’t issuing stock in order to pay off their debts the CFO should be arrested for fiduciary malfeasance or something along those lines.  Before the stock split I figured they should have been around a $30-50 stock, at most.  Probably $10 after the split (5:1 IIRC).  They’re around $600+ I think.  If they cleared all debt they probably would be able to keep going for a very long time even if the regulatory credits completely disappeared.
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: 230RN on April 02, 2021, 06:14:42 AM
"Hey, kid... wanna buy some air?"

https://youtu.be/9GNfRBn4-5c (4:20)

And they say TV isn't educational.
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: HankB on April 02, 2021, 12:51:42 PM
Just wait until Democrats manage to pass CO2 credits like they wanted during the Obama years.  Some Democrats were heavily involved setting up exchanges to take care of that once it passed.
Didn't Algore make a bundle of money selling imaginary clean air credits or some such nonsense with the blessings of fed.gov?
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: MillCreek on April 02, 2021, 01:46:08 PM
I have an acre of property, which is 80% covered in forest or grass.  I wonder if I can monetize the flora sequestering carbon dioxide and producing oxygen in excess of the needs of two adults, a dog and a cat.
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: Fly320s on April 02, 2021, 01:55:33 PM
I get a small amount of money from the carbon credits my solar panels "create."
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: Pb on April 02, 2021, 02:09:05 PM
I guess that explains why Musk considers himself a socialist.   ;/
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: Nick1911 on April 02, 2021, 03:10:22 PM
I have an acre of property, which is 80% covered in forest or grass.  I wonder if I can monetize the flora sequestering carbon dioxide and producing oxygen in excess of the needs of two adults, a dog and a cat.

Side note, this is sort of a common misnomer.  While biomass (especially in early growth stages) does indeed pull carbon dioxide from the air, it really only hold on to it for a short while.  Eventually the trees and plants die, and release the CO2 back into the atmosphere as decay products.  "Lets plant trees!" is sort of a feel good farce to anyone who is serious about actual carbon sequestration.
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: Kingcreek on April 02, 2021, 04:22:14 PM
I have an acre of property, which is 80% covered in forest or grass.  I wonder if I can monetize the flora sequestering carbon dioxide and producing oxygen in excess of the needs of two adults, a dog and a cat.
Back when the carbon exchange was active I looked into it. Almost 40 acres of timber and tall grass native prairie. There was a .gov online calculator.
Iirc I could complete 29 pages of application with annual attestation filing and collect a whopping $18.
The carbon exchange was discontinued. Algore was compensated with shares to be on the board and he cashed out for a couple million without ever having put any money into it.
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: MillCreek on April 02, 2021, 06:54:43 PM
Side note, this is sort of a common misnomer.  While biomass (especially in early growth stages) does indeed pull carbon dioxide from the air, it really only hold on to it for a short while.  Eventually the trees and plants die, and release the CO2 back into the atmosphere as decay products.  "Lets plant trees!" is sort of a feel good farce to anyone who is serious about actual carbon sequestration.

I do indeed learn something every day.
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: Ron on April 03, 2021, 08:53:37 AM
Recently there were scare headlines out there about how parts of the Amazon is now adding more CO2 than it is sequestering.

Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: Fly320s on April 03, 2021, 10:48:29 AM
Recently there were scare headlines out there about how parts of the Amazon is now adding more CO2 than it is sequestering.

Forest being cut down or population growth?
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: Kingcreek on April 03, 2021, 12:34:49 PM
Forest being cut down or population growth?
Or maybe caravans pooping on the side of the road.
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: Ron on April 03, 2021, 12:35:21 PM
Forest being cut down or population growth?

Yea, the lumber industry and burning the forests for farmland.
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: HankB on April 03, 2021, 02:02:57 PM
Side note, this is sort of a common misnomer.  While biomass (especially in early growth stages) does indeed pull carbon dioxide from the air, it really only hold on to it for a short while.  Eventually the trees and plants die, and release the CO2 back into the atmosphere as decay products.  "Lets plant trees!" is sort of a feel good farce to anyone who is serious about actual carbon sequestration.
The carbon in biomass that became coal and petroleum was only held on to for a short while?  ;) 
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: MillCreek on April 03, 2021, 02:08:31 PM
^^^Plus I was thinking that I have trees on the property that are over 100 years old.  They will die at some point in the future, but they are for now proving a net benefit in carbon dioxide management during my lifetime.
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: kgbsquirrel on April 03, 2021, 03:35:46 PM
I am reminded of the Catholic Church's sale of indulgences, which Luther and other reformers condemned.

Bingo!  Malum prohibitum, unless you pay us.
Title: Re: Tesla: Profits not from selling cars, but selling regulatory credits
Post by: kgbsquirrel on April 03, 2021, 03:49:53 PM
Side note, this is sort of a common misnomer.  While biomass (especially in early growth stages) does indeed pull carbon dioxide from the air, it really only hold on to it for a short while.  Eventually the trees and plants die, and release the CO2 back into the atmosphere as decay products.  "Lets plant trees!" is sort of a feel good farce to anyone who is serious about actual carbon sequestration.

This is why I push for Fischer-Tropsch fuel synthesis powered by nuclear and hydro.  The process pulls CO2 from the oceans (because 40x the concentration of open air, and wave action means air and ocean balance each other) thus it closes the carbon loop for hydrocarbon fuels AND it uses existing infrastructure so no need for massive spending on piping, charging stations, etc.

ETA: ethanol is a net energy consumer and fuel adulterant (contaminant) and is a federal money scam that should end.