Emissions Credits Emissions credit systems around the world are designed to economically benefit companies with non-polluting Accelerating Deployment of New Factories products by allowing them to sell their credits to polluting companies. In order to meet various countries’ emission targets and avoid government fines, polluting companies pay non-polluting companies through credit purchases. The goal of this system is for every OEM to be incentivized to reduce emissions and themselves become non-polluting by selling more of their own manufactured EVs instead of paying another company for their non-polluting credits. Emissions credit revenue is used for EV capacity expansion, which in turn displaces ICEs In 2021, we generated almost $1.5 billion in revenue selling zero-emission regulatory credits to other OEMs. Proceeds from such sales will go towards building new factories to produce EVs that will continue to displace ICE vehicles. While it is common practice today for ICE vehicle OEMs to purchase regulatory credits from other companies (such as Tesla) to offset their total GHG emissions, it is not a sustainable strategy. In order to meet increasingly strict regulatory requirements across the world, OEMs will be forced to develop truly competitive EVs. EV sales by all carmakers need to accelerate, taking market share from ICEs In 2021, Tesla delivered almost 1 million EVs globally. We hope that every car manufacturer will strive to produce hundreds of thousands of EVs per year, as significant reduction of emissions will only be achieved if all carmakers push for an industry-wide shift to EVs. Electric Vehicles Produced 1,000,000 2017 2018 800,000 2019 600,000 2020 2021 400,000 200,000 0 Tesla VW BYD Hyundai R-N-M Stellantis BMW Daimler Ford GM Toyota Jaguar Group Motor Alliance Group Motor Land Corp. Rover (Tata) 75 Source: EV-volumes.com; Micro-cars not included. Tesla data are production volumes; other OEMs sales and delivery volumes are assumed to approximate their production for the year.
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