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Flashback 2021: Tesla Made More Money Selling Emission Credits and Bitcoin Than Cars

  • Tesla posts net income of $438 million on a Generally Accepted Accounting Principles (GAAP) basis in first quarter of 2021, mostly thanks to sales of emissions credits.
  • Tesla sells $101 million worth of bitcoin after buying $1.5 billion of the cryptocurrency several months ago, and is accepting it as payment for cars.
  • Increase in production in China and demand for Model 3 and Model Y vehicles accounts for most of Q1 2021 production efforts.

Emissions credits accounted for $518 million in revenue in a quarter that saw a pretax income of $533 million and a net income of $438 million on a GAAP basis. Needless to say, the credits account for almost the entirety of Tesla’s profit for this quarter—in fact, sales of emissions credits have been a major source of revenue for Tesla for quite some time, contributing to hundreds of millions in income for the past few quarters. The automaker accumulates regulatory credits because it produces only EVs and sells them for a profit to other automakers that are short of these credits.

For one thing, if the government emissions credits did not exist and were not given to automakers under a cap-and-trade system, Tesla would simply not have any to sell—the government is essentially giving credits to Tesla to sell to other automakers for cash. For another, the automaker that trades on offering vehicles that produce zero emissions in the use phase (if not the build phase) has invested $1.5 billion in an electronic currency that requires tremendous amounts of energy to “mine,” drawing power from what are often not the cleanest sources of energy all over the world, in amounts greater than those produced by some individual countries by some estimates, for the sake of producing electronic currency.