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If we accept that emission credits are intrinsically valuable (i.e. have some utility in the form of helping to reduce the adverse effects of Global Warming), I

If we accept that emission credits are intrinsically valuable (i.e. have some utility in the form of helping to reduce the adverse effects of Global Warming), I do not see why that is an issue. You can think of a portion of each credit as part of the utility of one actual Tesla car sold.

papercrane 5y ago
Only an issue if you're an investor. The expectation is eventually that revenue stream will dry up. The question is if Tesla will be able to build it's other revenue streams up to replace it.
- falcolas 5y ago
  It's also somewhat volatile, as there aren't guaranteed purchasers for the credits. Recently, one of the biggest purchasers from Tesla (Stellantis) announced that it would stop buying credits entirely.
  - nickik 5y ago
    Yes one of the other companies would could have sold credits, is now no longer in the market making there be less credits on the market. Crazy how that works.
- klmadfejno 5y ago
  What if you're an investor who lives on Earth?
  - papercrane 5y ago
    Then you'll be worried about Tesla losing a revenue stream, and happy that they're losing it because other companies are transitioning to EVs.
    - klmadfejno 5y ago
      You either believe its priced in and don't care, or you believe its not priced in and shouldn't be holding it for that reason. If you're not thinking at the level of second order changes in a company's trajectory you're not really an investor so much as a gambler or someone looking to park their money out of cash.
      - papercrane 5y ago
        100% agree, just explaining why it matters for some people. Personally, I think TSLA is overpriced (not because of this though) so I'm not buying, but I won't be mad if proven wrong.
- nickik 5y ago
  People telling me not to invest in Tesla have been telling me 'credits will go away next year' since 2015. Yes, eventually it goes away, but anybody that actually reads the sheet knows that Tesla doesn't depend on these credits. As an long term investor I don't care about profits each quarter for a company like Tesla.
londons_explore 5y ago
I believe most of the credits so far are california credits. Other countries round the world are designing different CO2 reduction strategies, often without the ability to trade credits.
- sergiosgc 5y ago
  Fiat-Chrysler was in the past a large purchaser of Tesla CO2 credits. I haven't followed the news, so I don't know if that is still the case. CO2 credits are a thing in Europe, though.
  - londons_explore 5y ago
    CO2 credits in Europe don't apply to private passenger cars - but big places like power stations and steel factories.

papercrane 5y ago

Only an issue if you're an investor. The expectation is eventually that revenue stream will dry up. The question is if Tesla will be able to build it's other revenue streams up to replace it.

falcolas 5y ago
It's also somewhat volatile, as there aren't guaranteed purchasers for the credits. Recently, one of the biggest purchasers from Tesla (Stellantis) announced that it would stop buying credits entirely.
- nickik 5y ago
  Yes one of the other companies would could have sold credits, is now no longer in the market making there be less credits on the market. Crazy how that works.
klmadfejno 5y ago
What if you're an investor who lives on Earth?
- papercrane 5y ago
  Then you'll be worried about Tesla losing a revenue stream, and happy that they're losing it because other companies are transitioning to EVs.
  - klmadfejno 5y ago
    You either believe its priced in and don't care, or you believe its not priced in and shouldn't be holding it for that reason. If you're not thinking at the level of second order changes in a company's trajectory you're not really an investor so much as a gambler or someone looking to park their money out of cash.
    - papercrane 5y ago
      100% agree, just explaining why it matters for some people. Personally, I think TSLA is overpriced (not because of this though) so I'm not buying, but I won't be mad if proven wrong.
nickik 5y ago
People telling me not to invest in Tesla have been telling me 'credits will go away next year' since 2015. Yes, eventually it goes away, but anybody that actually reads the sheet knows that Tesla doesn't depend on these credits. As an long term investor I don't care about profits each quarter for a company like Tesla.

londons_explore 5y ago

I believe most of the credits so far are california credits. Other countries round the world are designing different CO2 reduction strategies, often without the ability to trade credits.

sergiosgc 5y ago
Fiat-Chrysler was in the past a large purchaser of Tesla CO2 credits. I haven't followed the news, so I don't know if that is still the case. CO2 credits are a thing in Europe, though.
- londons_explore 5y ago
  CO2 credits in Europe don't apply to private passenger cars - but big places like power stations and steel factories.