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Thursday, August 4, 2016

Elon Musk blames CARB and other car companies for $293.2 M Tesla 2nd quarter loss, says regulations are not stringent enough

Those who follow environmental and business news are used to hearing business and industry complaining that stringent environmental regulations are a major roadblock for profitability. In a twist to that familiar refrain, the leader of the world's largest electric car company blamed its latest huge quarterly loss, in part,  on air pollution regulations that weren't stringent enough!

As reported by The Los Angeles Times and others, Tesla Motors Inc., disappointed investors again by reporting a second quarter loss of $293.2 million yesterday. In explaining what happened, Tesla CEO Elon Musk gave several reasons, but, the most interesting one - or the most bizarre - was his claim that California Air Resources Board (CARB) regulations were "pathetic," implying that they were not stringent enough.

Video Credit: Tesla website - Fair Use

A significant portion of Tesla's business model involves the sale of zero-emission vehicle (ZEV) environmental credits. Under CARB air pollution regulations, ZEV credits can be traded or sold between those who need them to offset emissions from their fossil fuel fired cars and those who generate them by selling electric cars with no emissions such as the Tesla Model S.

According to The Times, Tesla sold about $170 million in emission credits last year. However, Musk apparently believes the standards that help to set the price for those credits are "pathetically low."

Musk added. "There's massive lobbying by the big car companies to prevent CARB from increasing the credit mandate, which they absolutely damn well should. As a result, you can barely sell the credits for pennies on the dollar. CARB should damn well be ashamed of themselves."

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