In 2020, Tesla made $1.79 billion in regulatory credit sales, according to a recent SEC filing. 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 lead in the electric vehicle market is being threatened by competition from China. BYD overtook the company as the world’s top seller of electric vehicles early in the year. Despite this, Tesla’s rivals are scaling back EV plans, which has led to Tesla seeing increased sales and profits from regulatory credits.
According to Bloomberg, income from these sales totals almost $9 billion since 2009. The recent revelation that earnings from their regulatory sales are slowly increasing disproved Tesla’s prediction of the credits drying up. However, this increase in profits is also a result of increased competition in the EV market.
Tesla did not immediately respond to requests for comments made by Business Insider regarding the latest developments in their business.