Actually, this does raise an interesting point about Gen 3. If people think Nissan put the ZEV squeeze on with the Leaf price cuts, just imagine what a $35k 200 mile BEV could do.
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ZEV credits
- Thread starter Nicu.Mihalache
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Actually, this does raise an interesting point about Gen 3. If people think Nissan put the ZEV squeeze on with the Leaf price cuts, just imagine what a $35k 200 mile BEV could do.
The market price of ZEV credits going to zero is the purpose of the whole arrangement, and also implicit in Elon's vision for Tesla. Once the EV revolution explodes, there will be no need for rules to force a minimum market share for non-polluting vehicles.
Mario Kadastik
Active Member
Ok, if there is no cap and california tabled the current change from 7->4 as well as an expansion of the whole program, then can someone summarize the impact on TSLA? I understand that prior to those latest news Tesla was assuming close to no ZEV credit income post Q4. Has that changed and if so, then how?
I am not in a position to summarize it, but it could actually be good for Tesla. This would increase the reliance of all the other manufacturers on credits from Tesla, since they would earn less from their own ZEV cars.
Tesla was not really expecting no ZEV credits post q4 they were just not basing their guidance on them because they are unreliable and the market will be somewhat saturated at the end of this year. In 2015 there is a big ramp up on manufacturers on the amount of ZEV credits required and Tesla will certainly be selling them in the future. When they revisit this they will hopefully conclude that the Model S does qualify for the credit because of the quick charging. The requirement is 80 percent in 20 minutes but Tesla is now charging faster than anyone had in mind when they said 80 percent in 20 minutes they were thinking of cars with a 80 mile range , not 300.
Even if they reduce Tesla's credits to 4 per year Tesla will be selling a lot of credits next year.
WILL TESLA KILL THE COMPLIANCE CAR?
Some of you have argued that between Tesla, Nissan, and now BMW with the i3, it is possible that in 2014 enough electric cars will be sold in California to drive ZEV credit prices very low. If that happens, why should the major ICE manufacturers sell compliance cars at all? Why not just buy ZEV credits on the open market? The compliance cars have to represent losses of $10K or more per car, don't they? Why build them at all if one can avoid it?
Some of you have argued that between Tesla, Nissan, and now BMW with the i3, it is possible that in 2014 enough electric cars will be sold in California to drive ZEV credit prices very low. If that happens, why should the major ICE manufacturers sell compliance cars at all? Why not just buy ZEV credits on the open market? The compliance cars have to represent losses of $10K or more per car, don't they? Why build them at all if one can avoid it?
TonyWilliams
Active Member
This was what I was getting to with this article:
Will Toyota Cancel the RAV4 EV?
There is a whole bunch of posts on ZEV credits starting here:
Tesla getting ready to roll out a Level 2 Charging Network - Page 3
Will Toyota Cancel the RAV4 EV?
There is a whole bunch of posts on ZEV credits starting here:
Tesla getting ready to roll out a Level 2 Charging Network - Page 3
As long as Tesla has a corner the ZEV market (as they do today), it can select the ZEV price. There's no requirement that Tesla sell all its ZEV credits, so even after Gen3 is out, it can keep the ZEV price up simply by declining to sell all of its ZEVs. If other OEMs are in fact faced with losses of $10k per compliance car, that sets the bar for ZEV prices.
If, on the other hand, some other car company creates an EV that has broad appeal and starts generating surplus ZEV credits, then the ZEV price will plummet. But only Nissan is in that situation today, and they don't seem to be out there selling their ZEVs. Perhaps they need (nearly) all of them for their own compliance?
If, on the other hand, some other car company creates an EV that has broad appeal and starts generating surplus ZEV credits, then the ZEV price will plummet. But only Nissan is in that situation today, and they don't seem to be out there selling their ZEVs. Perhaps they need (nearly) all of them for their own compliance?
If I remember correctly, the companies can opt to pay a USD 5,000 fine instead of buying credits? If yes, then they can select the price up to somewhere close to USD 5,000.
Citizen-T
Active Member
I thought I remember reading a while ago that manufacturers were willing to pay more than $5k to avoid the negative press they fear would come with getting fined. Did I make that up?
No, you are correct. It was mentioned before. I also remember reading that if other manufactures did not buy the credits that there would be other legal fees associated with resolving the fines. So in essence, the credits are worth more than the fine values.
Ok, I'll bite. Suppose you're Elon and you value the long-term mission more than you value Tesla having more profitability. Should an absurdly high (say $50,000) price for selling your ZEV credits be considered so that you motivate the underlined behavior?
TonyWilliams
Active Member
The fine is $5000 per credit not earned. A typical "100 mile" compliance-only car like the Chevy Spark EV, VW eGolf, Mercedes B-Class ED, Ford Focus EV, Fiat/Chrysler 500e, Honda Fit EV and Toyota Rav4 EV will earn 3 credits per car.
So, each of one of those cars not produced would generate $15,000 in fines. Plus the credits that they would have to buy on the open market.
Am I understanding you correctly that there is a double whammer - they need to pay the fine AND purchase credits?
I was intrigued as well! But this was what I found
http://www.arb.ca.gov/msprog/zevprog/factsheets/zev_tutorial.pdf , page 94
The example only showed a fine per each credit not met.
http://www.arb.ca.gov/msprog/zevprog/factsheets/zev_tutorial.pdf , page 94
The example only showed a fine per each credit not met.
Disclosure: I am not a Model S owner. In fact, I don't own a car yet (college). Still, it is my understanding that the forums can be used for discussion by non-owners.
In my just-created blog I've made what I believe is the most thorough analysis of ZEV credits yet. Okay, okay, there are more thorough things out there - but I've been unable to find them in web.
I know it sounds like the most spammish thing to do, linking to your own blog in the first post you make. Still, the point of this thread was to understand ZEV credits, so I think you'll see value in my article.
http://doubtingisthinking.blogspot.com.es/2013/10/tesla-carbon-credits-ongoing-scandal.html
Summary:
-Four months after the event, there are no swap stations and no estimate on when the first one could be built, if at all.
-The production car cannot do what is shown in the video.
-Starting in 2018, ZEV credits will be awarded on range alone, so the loophole will be closed. This means 20% of the "loophole period" (2013-2017) for Tesla has already elapsed.
-CARB is aware of this and has extended the loophole for another year.
In the link you will find some other gems. For example, they did not actually use the fastest gas station in LA.
In my just-created blog I've made what I believe is the most thorough analysis of ZEV credits yet. Okay, okay, there are more thorough things out there - but I've been unable to find them in web.
I know it sounds like the most spammish thing to do, linking to your own blog in the first post you make. Still, the point of this thread was to understand ZEV credits, so I think you'll see value in my article.
http://doubtingisthinking.blogspot.com.es/2013/10/tesla-carbon-credits-ongoing-scandal.html
Summary:
-Four months after the event, there are no swap stations and no estimate on when the first one could be built, if at all.
-The production car cannot do what is shown in the video.
-Starting in 2018, ZEV credits will be awarded on range alone, so the loophole will be closed. This means 20% of the "loophole period" (2013-2017) for Tesla has already elapsed.
-CARB is aware of this and has extended the loophole for another year.
In the link you will find some other gems. For example, they did not actually use the fastest gas station in LA.
I noted this sentence in the Q3 Shareholder Letter:
If this is an exact statement, then it follows that they have no inventory of ZEV credits - otherwise Q3 revenues would be unaffected by credits earned. This is contrary to my former impression, which was that they are sitting on a lot of credits, but that they are constrained by their ability to sell them.
The 2013 update was posted over the weekend:
Zero Emission Vehicle Credits
Looks like Tesla could have some upside in Q3 earnings as they sold a decent amount of credits to Honda and Subaru.
Zero Emission Vehicle Credits
Looks like Tesla could have some upside in Q3 earnings as they sold a decent amount of credits to Honda and Subaru.
Really interesting - Looks like Mercedes bought from Nissan, Chrysler bought from Fiat and Polaris, Jaguar/Land Rover bought from Ford, Honda and Subaru bought from Tesla, Volkswagen and GM bought from CODA and Mitsubishi.
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