Thursday, January 9, 2025

Tesla profits from selling carbon offset credits.

"It's not often easy and not often kind
Did you ever have to make up your mind?"

       John Sebastian, "Did you Ever Have to Make up Your Mind," The Lovin' Spoonful, 1965

"I've looked at clouds from both sides now. . . I really don't know clouds at all."
     Joni Mitchell, "Both Sides Now," 1967

There is no shortage of material from the 1960s songbook on cognitive dissonance.

I feel it. Maybe Elon Musk feels it. 

Environmental regulations that require car companies to reduce their carbon footprint are a major source of Tesla's profits. In the first nine months of 2024, 43 percent of Tesla's $4.8 billion in net income came from selling carbon offset credits to other carmakers. It has been going on for years. As Axios reported in an excellent article, since 2012, 34 percent of Tesla's total $32 billion in profits have come from those sales.

The ironies and cognitive dissonance arise because Elon Musk is a champion of ending regulations that burden businesses. A classic example of these would be the requirement that car companies meet overall fleet standards on carbon either by making cars with a smaller carbon footprint, or by making up for their carbon emissions by buying carbon credits from a rival  manufacturer with carbon credits to spare. It is a prime example of regulations that Musk and Vivek Ramaswamy are tasked with finding. The carbon offset program is a Democratic Party/Green New Deal regulation, one expanded upon by Biden, intended to address climate change -- a problem that is denied and roundly condemned by Trump and most GOP politicians. Trump calls it a burdensome EV mandate. It is the kind of regulation that California and its politicians love. Musk moved Tesla's headquarters from California to Texas in protest of the California business climate. 

Irony also flows from the other direction. Voters concerned about climate and who are positively oriented to regulations designed to reduce fossil fuel dependence, have been disappointed by Musk's hard turn toward Trump. Musk has added a subtext of "MAGA" to the Tesla brand. Tesla had a brand and vibe, an early-adopter, "cool," technology-positive, California Silicon Valley, environmentalist vibe. Now Musk and Trump have made those people and that brand an opposition target. Trump has condemned electric vehicles along with wind power and other green technologies. Democrats who no longer consider Musk an environmental visionary hero find themselves defending a carbon-offset program that is a major profit center for Tesla. Customers aren't making Tesla profitable. Environmental regulations are. And Musk gives hundreds of millions of dollars to elect Trump who opposes those very regulations. 

So weird. So complicated.

Three thousand local car dealers (a major donor group to Trump and down-ballot GOP candidates) selling cars made by Tesla's competitors wrote a letter to Trump this week urging him to roll back Biden-era mandates that incentivize electric vehicles.

We can expect Trump to do something to reverse Biden's green-energy initiatives. This will be an important test of populist, pro-petroleum, anti-regulation MAGA impulse because it will run counter to the crony-capitalist impulse. Both are part of the Trump way of doing politics. Trump is noteworthy for governing on behalf of his partisans and friends rather than for a more generalized bipartisan public interest. In this case, the anti-EV-mandate sentiments that drew applause from crowds who drive Ford-150s and Dodge Rams would, if implemented, cost Tesla billions of dollars a year. 

Trump will have to make up his mind. 


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10 comments:

Anonymous said...

Democrats Gavin Newsom and Karen Bass sure did a great job causing the Los Angeles fires, didn't they? Incompetence at its fullest, and Sage supports Newsom for President.

Up Close: Road to the White House said...

Huge forest have been going on in LA for decades. I saw a fire training film on them when I worked for the State Forestry in 1967. Newsom is putting in complicated regulations to slow climate change that has increased the hot winds. MAGA and Trump oppose those regulations. Which way does MAGA want it? Newsom is doing what he can, over the objection of MAGA. How funny that trolls blame the guy who is doing something rather than the people who objects and wants nothing done. What hypocrites.

M2inFLA said...

In simple terms, California has done little to prepare for such disasters. The reservoirs are empty to save a few fish. This decision impacted millions of residents.

Very few efforts to built infrastructure to support a fast growing state.

It's a matter of priorities. Some short term actions need to be prioritized to help the residents. The residents don't need the smelt. Everyone needs a reliable water supply.

Dave said...

It’s the climate that leads to the fires. Blaming leadership with winds like that seems beyond reasonable from my perspective. Nothing was going to stop these fires once they started. Mother Nature wins again. I wonder if MAGA would blame Newsom if a earthquake causes devastation?

Mike Steely said...

“Anonymous” and “M2inFla” are simply parroting Trump’s stupid, shameless lies about the tragic, deadly fires in LA – unhelpful, but no surprise. For anyone interested in actual facts, they aren’t hard to find. Here’s one from a source rated least biased by allsides.com:
https://calmatters.org/environment/wildfires/2025/01/la-fires-donald-trump-fact-check/

To Peter’s point about Musk and the environment, he’s undoubtedly as concerned as Trump is about it. Their bromance is based on shared values – money and power.

Anonymous said...

Flood the zone with MAGA red meat and quietly push through your tax cuts and tariffs. The firehose of deceit and misdirection are trademark Trump’s disruption and diversion. Focus on the crap coming out of his mouth and miss the objective of his plan Project 2025 and feathering the Trump enterprise nest.

M2inFLA said...

Mike, why then are the fire hydrants not making water available where needed? Why are the reservoirs so low? Why then has California not grown water sources as California population increased.

Yes, the winds are part of weather, and yes, the Santa Anna winds reappear every year. I know how weather works.

Yes the winds are worse.

Our climate is always changing. I recall that the central valley was once under water, long before man had any chance to affect the climate.

Tom said...

The reason fire hydrants aren’t effective has to do with an uncontrollable wildfire that is burning buildings rapidly. As those buildings burn they melt their water plumbing causing numerous leaks in the water system. No one can turn off their services quickly enough given the circumstances. This has little to do with reservoir supply.

Mike said...

The reservoirs in CA are not low. Reservoirs near the fires are low because they're fighting out-of-control fires. You should know by now that Trump is a boldfaced liar who needs to be factchecked.

Mike said...

Regarding the clueless comments about the LA fires:
My sister lives in the LA area and her son is captain of one of the fire crews, so I beg no pardon for pointing out that Trump is spreading stupid lies about the disaster because he’s inherently cruel and ignorant, and the supporters who eagerly swallow what they should know to be malicious BS aren't much better. Yet as disgusting as this is, it’s just one small example of what’s in store for the next four year, thanks to his basket of deplorables.