By on March 17, 2015

Tesla Harris Ranch California Battery Swap House Entrance

Tesla’s battery swap pilot program in Harris Ranch, Calif. may never leave the pilot phase, thanks to how California handles ZEV credits.

The Los Angeles Times reports Tesla earned $66 million in Q4 2014 from selling credits to automakers needing to offset their carbon footprints. Each credit was the result of the Model S’ classification as a Type 4 or Type 5 (based on battery size) vehicle by the California Air Resources Board — Type 5 involving vehicles with a range of 300 miles and can be refueled in less than 15 minutes — Tesla earning five to nine credits for every S sold as a result of the classification.

However, the sedan was knocked down to a Type 3 after CARB restructured its system for MY 2014 and beyond, basing earnings on “actual fueling events” regarding the fast-refueling credit. Thus, every S sold now earns Tesla four credits, except when it comes time to swap the battery pack. There, one S can have its pack swapped 25 times, with the credit applied to a total of 25 vehicles — up to nine credits per vehicle — as long as the other 24 are capable of quick refueling. Thus, Tesla’s credit-earning plan — and the profits from each sale — remain unchanged.

That said, the ZEV credit scheme will change again in 2018, with fast-refueling credits dropped for range assessment.

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4 Comments on “Tesla Battery Swap Pilot Status Tied To California ZEV Credits...”


  • avatar
    wmba

    A genuine bowl of thick oatmeal as required eating, or no apple strudel for you!

    The carrot and stick approach as practiced in California by bureaucratic fiat based on the most complex and non-understandable set of mental masturbation rules ever thought up by eggheads with no practical experience whatsoever. Keeps the theory, such as it is, pure.

    Kind of like Canada’s Income Tax Act and the way it is administered. You’re guilty of something or other the minute you enter the first figures in your return.

  • avatar
    MarkySparky

    I think Tesla’s strategy of using “old” battery tech, and instead concentrating on battery+car manufacturing capacity and charging infrastructure, is proving to be very prescient. The real scammy electric car companies (Fisker, ZAP, etc) relied entirely on credits, where Tesla actually has a coherent, workable, long-term strategy. I still wouldn’t touch their stock with your money, but it is very compelling to watch this story unfold.

  • avatar
    Lorenzo

    It’s getting harder and harder to dismiss the notion that Tesla exists to game the government credits handout system.

    • 0 avatar
      SunnyvaleCA

      Yep. But doesn’t that describe pretty much everything these days? As government reach grows, companies and citizens alike will have more and more incentive to at least get something beneficial (short term for themselves) from working the system.

      I laugh at Oregon considering a per-mile tax on electrical vehicles while the Feds give tax credits for the very same vehicles. Thus the electric vehicles are both incentivized and penalized at the same time.

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