June 3, 2019
For years, Tesla Inc. has hauled in revenue by selling credits to other carmakers that needed to offset sales of polluting vehicles to U.S. consumers.
These sorts of transactions have largely been shrouded in secrecy -- until now.
General Motors Co. and Fiat Chrysler Automobiles NV disclosed to the state of Delaware earlier this year that they reached agreements to buy federal greenhouse gas credits from Tesla. While the filings are light on detail, they haven’t been reported on previously. They also represent the first acknowledgments from carmakers that they’re turning to Tesla for help to comply with intensifying U.S. environmental regulations.
The deal with GM will come as a surprise to those who thought years of sales of plug-in hybrid Chevrolet Volts and all-electric Chevy Bolts would leave the largest U.S. automaker in the clear with regard to regulatory compliance. But while sales of those models have put GM in a position where it doesn’t need extra credits today, demand for its battery-powered vehicles are dwarfed by its gas-guzzling trucks and SUVs. And the company wants to bank the credits for future years when emissions rules get tougher -- especially if a Democrat beats President Donald Trump in 2020.