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The state is thinking about capping the number of sell-able zero-emissions vehicles (ZEVs) credits. Right now, manufacturers needs a certain amount of credit to sell cars in California and companies like Tesla who produce more credits than they need can sell off the excess.

On the one hand, if this is capped, other automakers will need to come out with their own EV to get the needed ZEV credits which means more EV options for buyers.

On the other hand, Tesla will lose a lot of money if this happens as they will only able to sell so much. Last year they sold $168.7 million in regulatory credits. If this was to be be reduced, that means Tesla will have less money to put in things like R&D.

What does everyone think?
 

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Good thing.

I was at a program about CARB, it's history and where it's likely going. There was also a Q&A session - speaker has been on the CARB board for 20 (?) years.

Bottom line is they never envisioned there being a Tesla when they drafted (and revised) the program. I think the figure was that there are enough ZEV credits in existence today to last all automakers until something like 2025.

As more and more EV's are sold, the inventory of credits is just going to increase and it will get to the point where it is so much easier (cheaper) for manufacturers to purchase credits than develop a ZEV program that it will render the program meaningless.

Without the sale of CARB credits in the past, Tesla would likely not exist today. But that is history and Tesla raises billions on the stock market. If they need to continue to sell ZEV credits to stay afloat, they won't be around long anyway.
 

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I wouldn't mind seeing a cap on how many credits companies can buy or sell. Companies like Fiat Chrysler buys a lot of credits from others including Tesla, they ranked last compared to other major companies with a low fleet wide fuel efficiency. this would force them to improve the fuel efficiency of their vehicles or go hybrid/electric.

Not sure how much Tesla actually raises so I can't really say if $168.7 million is a tiny drop in their bucket. Maybe they'll have to cut back somewhere to make up for selling less credits.

Overall, a good change that other states should follow.
 

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Tesla should be able to secure more investments with what else they have planned but investors should be looking at how the Model 3 sells because that could help to determine what future model launches could be like and already the amount of pre-orders that went through was a good sign.

So be on the look out for how much more they can secure.
 
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