New Rules in California to Hurt Tesla's Bottom Line

Luke Vandezande
by Luke Vandezande

Tesla will be feeling a financial squeeze this year thanks to new rules from the California government.

California’s Air Resources Board (CARB) revised its rules, reducing the number of credits Tesla gets per Model S sold to four compared to the seven it got in 2013. Last year, the Palo Alto, Calif.- based electric car manufacturer sold $129.8 million worth of the credits to other automakers. That income played a pivotal role in Tesla being able to report a profitable first quarter in 2013.

CARB is actually raising the maximum number of credits available per emissions-free vehicle to nine, but Tesla won’t qualify. In order to meet that requirement, vehicles must be capable of refuelling in no longer than 15 minutes while still offering a long driving range. Hydrogen-powered vehilces will be able to fulfill those requirements.

Last year, Tesla showcased how the Model S is capable of a rapid battery swap as a solution to slow charge times. Stations would offer owners the option to exchange their battery, but Tesla has yet to open a single example.

GALLERY: 2013 Tesla Model S

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[Source: Bloomberg]

Luke Vandezande
Luke Vandezande

Luke is an energetic automotive journalist who spends his time covering industry news and crawling the internet for the latest breaking story. When he isn't in the office, Luke can be found obsessively browsing used car listings, drinking scotch at his favorite bar and dreaming of what to drive next, though the list grows a lot faster than his bank account. He's always on <A title="@lukevandezande on Twitter" href="">Twitter</A> looking for a good car conversation. Find Luke on <A title="@lukevandezande on Twitter" href="">Twitter</A> and <A title="Luke on Google+" href="">Google+</A>.

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2 of 4 comments
  • Bob Moro Bob Moro on Apr 08, 2014

    Tesla is a beautiful, brillia ntly engineered car created by a genius. It may not be for everyone by why would anyone be so hateful towards Tesla?

  • T. Allen T. Allen on Apr 18, 2014

    Californias Air Resources Board has alway come up with stupid laws. they should be eliminated. Did you know that they are even considering banning vehicles that are painted black in SoCal because black does not disipate heat like the lighter paint colors? Acording to CARB, this will cause the vehicle AC system to run longer causing an longer additional load to the engine, making it burn more fuel thus increasing emissions... CARB has always over stepped, and since SoCal is a nanny state, they are able to get away with it.