My understanding of the regulation is that large scale automakers in California have to produce a certain number of vehicles that comply with the standards. If they aren't producing enough, they can buy ZEV credits from a company that produces more than they are required to. Tesla is small enough that they don't need to have any zero emissions vehicles, but since all of the cars are zero emissions, they have a buttload of surplus credits which they sell to other manufacturers. (if this is not correct, please let me know). My question is this: would the mission of accelerating the transition to sustainable transportation be better served by holding onto those credits and forcing other automakers to build their own zero emissions vehicles to meet the regulations? Selling the credits means the other car companies can continue to be complacent, but it increases Tesla's ability to work on new vehicles and scale production. From a profit perspective it is brilliant, other companies are handing Tesla parts of their R&D budgets for basically nothing, letting Tesla catapult ahead. But Tesla isn't about profit, the objective here is to convert all those plants building ICE cars to EVs, whether Tesla controls half a percent of the market or half of the market isn't really the point. So what really is the best approach to ZEV credits? Should they be sold for cash to increase production and advance the technology, or should they just sit tight with them? I guess in the long run the thing that will force the switch completely isn't government regulation, it will be the better efficiency and better driving dynamics of EVs that pushes mass market adoption, so ZEV credits only really have an impact if they manage to jolt companies out of complacency long enough that they realize that they can offer a better product if they drop fossil fuels.