Elon Musk and Co. repeatedly earns billions of dollars selling CO2 allowances to other car brands. The earnings on the cars themselves are lagging behind.
At a time when the electric car market is experiencing challenges, Tesla manages to increase both revenue and earnings.
While sales of electric cars are important to the brand, they are not the primary driving force behind Tesla's financial success.
Instead, Tesla earns significantly more from other things – including energy storage systems, on-demand services and selling CO2 allowances.
In particular, the sale of CO2 allowances is a source of income that has become increasingly important for Tesla. Other car brands that produce cars with internal combustion engines may find it difficult to comply with the stricter emission requirements from, for example, the EU.
To meet these demands, they can buy CO2 quotas from car manufacturers with lower emissions, such as Tesla.
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In the third quarter of 2023, Tesla's earnings from the sale of emission credits reached the second highest level in the car brand's history.
Tesla's finance director, Vaibhav Taneja, put it into words during a question and answer session for investors in connection with the latest accounts.
– We continue to see an increased sales level for emission credits with over 13.7 billion Danish kroner in revenue so far this year.
Despite the challenging market for electric cars, Tesla CEO Elon Musk plans to increase sales this year.
The company is focusing on expanding its business in energy storage and connected services that car owners can purchase. These services help to increase Tesla's revenue and give the company a stronger position in the market.
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