Tesla made over $6 billion selling carbon credits to other automakers instead of profiting from car sales alone. The company accumulated a massive surplus because it only builds electric vehicles, but as competitors launch their own EVs, demand for those credits is drying up.
Tesla has a multi-billion-dollar secret that saved the company from bankruptcy, and it has nothing to do with them selling cars. It's called carbon credits, and here's how it all went down. Let's go back to 2008. Electric cars back then are a niche product until governments around the world start cracking down on vehicle emissions. So automakers are required to meet strict environmental standards or they will face hefty fines. But most traditional car companies struggled to adapt, except those automakers who found a loophole, something called carbon credits. Automakers earn credits for producing eco-friendly vehicles, but they can also sell those credits to other companies that don't meet the emission standards. And guess who's the biggest carbon credit generator in the game? Yep, Tesla. And since Tesla only makes zero-emission electric vehicles, they rack up an enormous surplus of carbon credits every year. Tesla sells these credits to competitors. So far, Tesla's made over $6 billion from selling carbon credits alone. But things are changing. As more companies roll out electric vehicles, the demand for carbon credits is shrinking, and Tesla's credit revenue is expected to decline, and their lifeline from the early 2000s could completely disappear.
