Tesla Loses $50 Mil, Gets $250 Mil in Environmental Wealth Redistribution

George Clooney's car... you're paying for it

George Clooney's car... you're paying for it George Clooney's car... you're paying for it

Tesla, the crony capitalist car company that couldn't... without government intervention, is still performing spectacularly. And by performing spectacularly, I mean it's losing enough money every year to build a car company that makes flying cars.

Tesla Motors, an electric car maker backed by the U.S. Department of Energy (DOE), posted a $49.8 million loss in the first quarter of 2014. This loss compared to a profit of $11.2 million in the same period a year earlier despite selling more cars.(i) Last year’s profit was not due to electric car sales, but to sales of California zero-emission-vehicle environmental credits to other auto manufacturers. Those lucrative credits have declined and tight battery supply has made it harder to produce the carmaker’s electric vehicles...

Tesla has been able to garner millions from California’s zero emission vehicle standard. California’s Air Resources Board has mandated that zero emission vehicles (cars with zero emissions of tailpipe pollutants) comprise 15 percent of new-car sales by 2025. Those vehicles comprise less than 1 percent of new car sales in California today.

Companies that exceed California’s milestones towards its zero emission vehicle goal receive credits that are worth cash when sold to auto manufacturers that do not meet the state’s requirements.  Essentially, California has mandated the sale of electric cars, and enforces the mandate by requiring that companies that do not sell enough electric cars pay into a fund that subsidizes those companies that do.

Tesla doesn't actually make money, it resells California's mandated energy credits. So if you're buying a regular car, you're basically paying rich people to drive a Tesla.

That's how environmentalism works and Big Green is slaving over the thought of doing this on a national level with Carbon Credits.

Tesla makes unprofitable mandated cars that it subsidizes by selling the mandate credits to companies that make affordable cars.

During the first quarter of 2013, Tesla received about $68 million (12 percent of revenue) from the sale of zero vehicle emission credits. Note that without the sale of these credits, the company would have lost over $50 million during the first quarter of 2013.

According to a Wall Street analyst, Tesla earned as much as $250 million in 2013 on their sale. Translated into dollars per vehicle, Tesla made as much as $35,000 extra on each sale of its luxury Model S electric sports sedan through state environmental credits that it sold to other auto manufacturers that need to buy credits to satisfy California regulations. Adding in the Federal tax credit of $7,500 per vehicle and a state rebate of $2,500 per vehicle, the state and federal incentives totaled as much as $45,000 per vehicle that Tesla sold for as much as $100,000, depending on the model and options.

Essentially, regular taxpayers who buy typical cars, trucks and minivans are heavily subsidizing an additional car for a clientele whose average income is just under $300,000 per year.

That's environmentalism in a nutshell. Steal from the poor to give to the rich.

Tags: Ecoscam