By on March 25, 2021

Tesla is demanding the reinstatement of a 2016 Obama regulation that more than doubles penalties for manufacturers who fail to adhere to fuel efficiency requirements. Gee, I wonder why it would do such a thing.

While focusing on the environment is an admirable endeavor, much of the discussion surrounding environmentalism on the corporate level really skirts around the periphery of Scamville. Elon Musk is no fool and understands that the more stringent regulations are enacted against his competitors, the more desperate they will be to buy up Tesla’s mountain of carbon credits. With a little help from the government, electric-vehicle companies can effectively bankrupt their more-traditional rivals while earning a nice payday for themselves. In fact, Tesla has only managed to become a profitable company because of this practice

That’s not an attempt to bash the automaker, either. EVs are still rather costly to produce, haven’t yet achieved parity with fuel burners, and many have argued they would fail without government assistance. We’ve even seen countless startups wither and die in China as the government began pulling subsidies. Starting an automotive company is insanely difficult and building one that’s an affront to established industry players is borderline impossible. Props to Tesla for making the world work on its behalf through carbon credits and tax subsidies.

But the company is starting to look all grown up, making this whole deal look a lot less cute. Tesla stock remains extremely desirable and it’s officially become a global automaker. How much more help does it seriously deserve? Tesla Inc. reeled in over $3.3 billion from regulatory credits over the last three years. Roughly half of that came in from 2020 and was the only way to keep the company from operating at a loss. Meanwhile, its automotive arm is starting to see serious gains (thanks largely to its global expansion), and corporate leadership has claimed this will be sufficient in keeping it afloat, especially since it sees the carbon credit game becoming less profitable over time. The company claims it doesn’t need to sell credits to be profitable anymore, but you had better believe it’s still going to make use of them.

According to Bloomberg, Tesla has asked a federal appeals court in New York permission to join an appeal by the Natural Resources Defense Council and the Sierra Club. The group seeks to undo laws enacted by the previous administration they believed weakened the Corporate Average Fuel Economy (CAFE) standards.

From Bloomberg:

The court hasn’t yet ruled on whether Tesla can join the case.

“The previous Administration’s egregious action presents a situation as extraordinary as it is unjustified and inflicts immediate and irreparable injury on Tesla and the public,” the Palo Alto, California-based company said in a brief filed March 4 with the Second U.S. Circuit Court of Appeals.

Tesla, whose cars generate no emissions, claimed the Trump administration’s rule harms it by devaluing the credits it’s permitted to sell other companies because it exceeds CAFE standards.

We’d like to take this opportunity to let anyone reading now that all EVs absolutely generate emissions when being manufactured (and shipped) and will continue to do so depending on how you’re sourcing the electricity. Meanwhile, President Joe Biden has ordered a complete review of the existing emissions rules. The National Highway Traffic Safety Administration said it expects to have it completed within the next six months.

[Image: JL IMAGES/Shutterstock]

Get the latest TTAC e-Newsletter!

56 Comments on “Tesla Demands Return to Obama Fueling Restrictions, Reasons Obvious...”


  • avatar
    tomLU86

    Correction please: Tesla’s vehicles generate no TAILPIPE emissions.

    That battery has to be plugged in to be charged. At the other end of the outlet is an electrical powerplant, and chances are better than 1 in 2 that plant runs on fossil fuels.

    Hence that plant pollutes. Hence Teslas pollute.

    • 0 avatar
      mcs

      Natural gas is cleaner than gasoline or diesel. It’s also easier to clean up fossil fuel at the power plant. Electric is also more efficient. You can also go to solar if you want cleaner power.

    • 0 avatar

      Powerplants will run on wind, solar, hydro, nuclear, thermonuclear or other renewable energy source without emissions. So saying that “but powerplants run on coal, oil, gas” is not a valid argument – it is an argument from past where those who oppose EVs belong.

      • 0 avatar
        Luke42

        Coal is a (declining) part of the electric generation mix.

        But EVs are agnostic about where their energy comes from. They can run off of solar one day, and coal the next — and I don’t have to buy a new car with a different kind of engine to make that happen.

        This means that we replace two hard problems (clean electric power generation, oil-dependant transportation) with one hard problem (clean power). EVs are better all around in both environmental and user-experience terms.

        So, yes, us green car hippies have thought of “the long tailpipe”. Turns out it’s a win however you slice it, except that EVs frontload the ownership costs.

      • 0 avatar
        Art Vandelay

        So with respect to nuclear power and emissions, are we not counting the water from Fukushima that is still being “emitted” into the Pacific or the core from Chernobyl that basically got emitted into the front yard and now requires a building be built off site and rolled over it because 35 years later you still can’t work high up there without getting hazardous doses as emissions? Call me crazy, but Gamma rays are in fact emissions.

        It doesn’t go bad often, but when it does it goes really, really bad. I know, you supposedly can fix all that, yet nobody does.

      • 0 avatar
        tomLU86

        “Power plants WILL run on…..”. I live in the present, not an ideal future.

        Until our leaders are able to inform the majority of society that the concept of affordable, independent transportation represented by the automobile in particular, and also amenities like large, air conditioned homes in general are wrecking the planet, and a majority of people buys into that, and is willing to not only support, but PAY for greener energy, my argument that BEVs pollute is very valid.

        Norway style fuel taxes in America would help

        That won’t address the global impact of China and India building coal fired power plants of course.

        • 0 avatar
          28-Cars-Later

          So… you want the US gov’t to reduce *Americans* to Third World living standards because the Second and Third World has significant and unaddressed population problems. Oh and I forgot those governments will do whatever they like to do what they think is best for their respective nations while we’re held at knifepoint and our detriment for “Earth”. Because sure we’ll take it in the shorts for the “team” while the “team” does what it likes.

          Wow, just wow.

          • 0 avatar
            tomLU86

            @28-cars-later

            America was a long way from third world living standards in 1930, 1940, 1950, and 1960, let alone now.

            During those years, the American way of life was consistent with the real output of the American economy.

            I merely point out that all the ‘do-gooders’ need to be prepared to dip into their pockets and pay A LOT, for what I consider the “Green happy fantasy”. Pay a LOT means giving up other things that one could have had.

            There are some things I’m willing to accept–given the right preconditions, that may help the planet, but would definitely help the USA.

            I’m willing to pay more in fuel taxes–ONCE the government agrees to use the proceeds ONLY on roads.

            I think the ‘road use fees’ are just an overly intrusive way of doing what higher motor fuel taxes would do. And if the cost of higher fuel taxes helps EV sales, oh well.

            I don’t believe EVs should be subsidized. I think CAFE is absurd (again, just raise fuel prices–and use the funds for the roads).

            I think most people who support themselves by trading their TIME (aka labor) for money, and pay taxes would agree.

            But the people who set the trends, even here, are all about “road user fees” and “EVs are better, but costs are front-loaded, can the govt help out with that”, ideas that sound nice because they make them sound painless, but they really are not workable. Or maybe I don’t like them.

            Basically, in the end, they will require taxpayers to pony up, but in a roundabout way. I’d rather pay directly at the pump, if I know the taxes are going to fix the roads. Here in Michigan, the roads suck, our fuel taxes are high, and I think only 65% of them go to roads.

          • 0 avatar
            DenverMike

            “…if I know the taxes are going to fix the roads…”

            That’s good, let me guess, you’re here all week? Tip your waitress??

            Those little Scandinavian countries weren’t built up like the US, around the promise of cheap fuel basically. The poor would suffer the most, everyone else would just spend more on fuel, maybe less on something else.

    • 0 avatar
      Matt Posky

      Tell it to Bloomberg. We made it perfectly clear that claiming EVs generate no emissions is a child’s perspective.

  • avatar
    ErickKS

    Toys for the rich, at taxpayer and legitimate business’ expense.

    Just one more part of the biggest scam in history.

    • 0 avatar
      mcs

      Why are they “toys”. You can use them on a daily basis for commuting or take one on a long trip. For $40k, they’re not just for the rich either. A Koeniggsegg or a Ferrari is a toy for the rich. A Tesla isn’t.

      What about the expenses of the oil/gas subsidies and even worse, the middle eastern wars? That’s a lot more money than letting electric car owners keep a little more of their earnings and not have to turn them over to the IRS.

      • 0 avatar
        ErickKS

        Good question. “Toys” primarily due to design and performance aspects that are wholly unnecessary for the justification of “the environment”. These vehicles could cost a lot less and use less resources if “the environment” was the real goal here.

        Also, they could be taking mass transit or riding bicycles if they really believe the justification.

        $40k isn’t representative of the average Tesla cost either. More like an edge case overall.

        As for oil, that’s pretty basic. It got us here today. We wouldn’t be even discussing this folly without it. Replacing part of its use through normal innovation over time is quite fine. It’s the stupid, offensive idea that it has to be totally replaced, yesterday, that is a huge problem.

        • 0 avatar
          mcs

          “that it has to be totally replaced, yesterday, that is a huge problem.”

          Yeah, I worry about it getting pushed too quickly. I think we’ll see vast improvements in the technology both in the vehicles and infrastructure over the next few years and at that point, things will happen naturally. Pushing too fast can hurt a technology. Autonomous driving is a poster child for that. I’m also not a fan of the subsidies for either fossil fuel or EVs for a variety of reasons – and I’m someone that actually receives both. Solar and other infrastructure is fine.

    • 0 avatar
      Luke42

      “Toys for the rich”

      EVs frontload the ownership costs. They cost more to buy, but less to operate.

      This is one of the ways it’s expensive to be poor, which is unfair. As Terry Pratchett described it:
      https://www.goodreads.com/quotes/72745-the-reason-that-the-rich-were-so-rich-vimes-reasoned
      EVs are the good boots. This will be especially true when EVs start being made our of stainless steel.

      The way to fix this is to build the economies of scale, so that EVs become more affordable. But, in order to do that, we have to build the expensive ones first.

      If you graph the price of Tesla’s entry-level vehicle over the history of the company, you’ll see a rough progression of this happening. They still have a ways to go, though.

    • 0 avatar
      FreedMike

      Right, the $38,000 Bolt, $45,000 Model 3 and $50,000 Mach E are priced so only rich guys can afford them. But $55,000 pickups aren’t.

      Three cheers for faux populism…hip, hip, hooray!

      • 0 avatar
        28-Cars-Later

        No one can afford anything.

        Mission Accomplished!

        • 0 avatar
          FreedMike

          @28, here are the top three selling vehicles in the U.S.

          1) Ford F-150
          2) Chevy Silverado
          3) Dodge Ram

          All are laughably overpriced.

          People can apparently afford plenty.

          • 0 avatar
            Art Vandelay

            Yes, because every pickup sold is a King Ranch or Power Wagon. Might want to look at fleet vs retail and see how most trucks are actually equipped.

          • 0 avatar
            DenverMike

            Cars/CUVs/etc, greatly outsell pickups, like 8:1 but there’s less of them to pick from so specific pickups rise to the top.

            But new pickups are needed to replenish the market as we lose millions a year to Mexico (and other places), both legally and black market, and pickups are the most stolen.

            Pickups are more likely a write-off, commercial use, forced to buy before Dec 31, etc, but the luxos, Lariat, Laramie and above (trim) are under 40% of total sales.

          • 0 avatar
            28-Cars-Later

            Credit != “affordability” IMO. Credit is a tool, not a lifestyle.

  • avatar
    Garrett

    How long until someone at the DOJ decides to look into producing automobiles AND owning the infrastructure to refuel them while excluding rival products? Seems to me like you could get some serious antitrust action going.

    • 0 avatar
      mcs

      I don’t think it’s the vehicles and superchargers that will get them in trouble. You can charge elsewhere and others, like Porsche, I think are excluding other makes.

      The thing that might get them in trouble is the Telsa insurance and the Tesla owned body shops. That one could get them in trouble.

      • 0 avatar
        Garrett

        While you can charge elsewhere, it’s pretty clear that if you buy an electric vehicle that’s not a Tesla, you have limited ability to charge outside of the home. In some places it might be convenient, while in other places it’s just not feasible – and that’s given the relatively small number of vehicles on the road.

        DOJ has gone after companies for less – think Microsoft and their browser, long distance phone service, etc.

        Frankly, the public good is not served by having large swaths of charging infrastructure controlled by a single auto manufacturer while also excluding other makes.

        I looked into getting an electric car, not because I want one, but just to see if I could make it work as part of my own due diligence. The only way it would have made sense was for me to buy a Tesla – it was the only chance I’d have to be able to access charging stations when out of the house without it becoming a significant “event”.

        Road trips? They’d suck with a Tesla, and there’s no way you’d consider it without access to their network.

        Frankly, if Tesla really cared about advancing electric cars, they’d open up their network to everyone. Really, the charging network is probably going to prove to be the most valuable part of the company. After all, would you rather sell a printer, or be the one who sells the ink?

        • 0 avatar
          Scoutdude

          It won’t be long until non-Tesla charging stations are more common than Tesla ones.

          It also won’t be a profit center for Tesla, as the competition will reduce the profit margin. Places like restaurants and stores will use it to get people in the door where they can make real money. Not unlike Convenience stores who make more money selling you a candy bar for a $1 than they do selling you $10 worth of gas.

          Of course since Tesla has a captive audience they will be able to resist that profit pressure, at least for a while. However within 10 years the fact that the only convenient to use public charging for your Tesla is a Supercharger will be one of the big minuses to driving a Tesla. If they continue to overcharge for charging that will be a big minus to purchasing one.

    • 0 avatar
      Luke42

      You can charge an EV from any house or building with electricity.

      The question is: how fast?

      You can unplug your toaster slow-charge your Tesla or Bolt.

      You can unplug your dryer and charge it at the speeds a commuter needs. You’ll have a full charge by morning.

      Superchargers are only for road trips.

      • 0 avatar
        jeanbaptiste

        Just for clarity for those who may not know the math behind what Luke42 is saying, Plugging your Tesla into your toaster outlet will get you roughly 3 miles of range per hour of charge, which in 12 hours would get you ~36 miles which is enough to get you back and forth on the average 16 mile one way commute. That would satisfy ~50% of the needs to most commuters.

        Plugging into your dryer overnight would give you full range of your ev (anywhere from 200-350 on modern EV) would push you to probably 95% of the commuting needs of Americans.

  • avatar
    GregLocock

    Musk the hypocrite strikes again. Tesla has just started buying bitcoin. Bitcoin are manufactured by performing endless calculations on hot computing rigs. Those rigs are powered by electricity. Electricity is mostly generated by burning fossil fuels. It is estimated that bitcoin mining now use more electricity than all but 13 countries.

    • 0 avatar
      mcs

      “Those rigs are powered by electricity. Electricity is mostly generated by burning fossil fuels”

      Even worse, much of is done in China in areas that burn coal for power. They’re cracking down on it, but still. you’re right. It really doesn’t make sense that he’s pushing it unless the plan is to get the governments to use solar and buy from him. That may be the case. Those crackdowns are already happening even in China. So, they need to go to him for the solar, power distribution systems, and powerwalls. Just follow the money.

      https://www.cnbc.com/2021/03/02/china-bitcoin-mining-hub-to-shut-down-cryptocurrency-projects.html

  • avatar

    I am 100% with Musk no matter what he says or does because he always knows what and why he does it and does it for the benefit of the all mankind.

    • 0 avatar
      Luke42

      I don’t like putting a guy on a pedestal.

      Musk isn’t a saint… He will suck up to scuzzy politicians when he has to. He plays money games.

      But he is willing to repeatedly gamble his fortune on cool nerd stuff that will probably benefit humanity, and he’s smart enough to stack the deck before every gamble.

      I don’t want to work for Musk, and I don’t want to play poker against him. But I do want to buy electric cars and rocket rides, and I am cheering him on when he does cool nerd stuff.

      I’m reluctant to put any human up on a pedestal.

  • avatar
    Tele Vision

    EVs = Pooping at your neighbour’s house then lambasting him for his sewer bill.

    • 0 avatar
      Luke42

      Just wait until you learn more about whose yard the oil industry poops in. And how much military protection they require!

      You’ll be all over that, I’m sure!

  • avatar
    EBFlex

    At least Tesla is getting creative in their rather lame attempts to hide the fact they need to raise capital.

    • 0 avatar
      Luke42

      With their stock price, raising capital is easy.

      All they need to do is do an FPO.

      They did an unneeded $5B FPO in 2020 (their current factory projects were already funded), because they realized their stock had become a meme stock and they wanted to cash in.

      Now they’re getting creative with what to do with that money between now and the next factory project.

      If they need more money to expand the business now, they can just sell a couple of million shares at $637 (stock price at this instant) and TSLA enthusiasts will happily hand them the money.

      Personally, I sold my TSLA stock right after the February peak and I’m waiting for it to return to a more realistic valuation. I’m happy with my life choices.

  • avatar
    Ol Shel

    Sounds kinda woke.

  • avatar
    285exp

    If this was really about saving the planet by forcing the automakers to sell environmentally friendly cars, they wouldn’t be allowing them to purchase indulgences from Tesla so they can keep selling the ones we want to buy now. Doubling the price of the indulgences is just going to make Musk richer at the expense of the consumers, because they’re the ones who’ll be paying for those indulgences, not the automakers.

    • 0 avatar
      Luke42

      This system of “indulgences” actually makes sense.

      Government: “If you don’t want to make green cars, just pay a competitor to do it for you.”

      Big 3: “OK, paying a competitor it is!”

      Tesla: [Swaggers on from stage left, and market cap inflates to the point where it is larger than all other American car manufacturers put together.] I AM THE KRAKEN!

  • avatar
    dwford

    Is Tesla demanding that all future carbon credits it sells get paid for in Bitcoin?

  • avatar
    SCE to AUX

    “With a little help from the government, electric-vehicle companies can effectively bankrupt their more-traditional rivals”

    Nobody’s going to go bankrupt due to the carbon credit scam.

    On the other hand, any car mfr could have chosen to be on the other side of the equation by going all-in on EVs. But they haven’t, and only VW shows serious commitment, and only after getting burned on diesel.

    Instead, the mfrs gambled that the political winds would favor them, and now it’s turned into a big whinefest for all.

  • avatar
    FreedMike

    A lot of hand-wringing about what a car company WANTS the government to do. Whether the government ACTUALLY does what Tesla wants it to do is another story. And if that happens, it’ll be because of one thing, and one thing only: payola. The only reason why Tesla would even ask this is that it thinks maybe it can grease enough palms to get it done.

    The real problem here isn’t Tesla, or EVs, or carbon credits – it’s a political system where elected officials can be legally bribed. Think Tesla’s the only company doing it? Wake up. How do you think oil companies magically got tax credits at a time when they were raking in billions upon billions in profits? Why do you think GM and Chrysler had the temerity to go to the government, hat in hand, and demand bailouts? How did BP expect to stay in business in this country after unleashing an environmental disaster so bad that if it was a foreign government, we’d have launched Tomahawks on it?

    It’s real simple: by bribing our elected officials, those companies bought chits that they traded in when the time was right.

  • avatar
    schmitt trigger

    FreedMike;
    Sadly, you are absolutely correct on this one.

    The famous Eisenhower dictum: “beware of the military-industrial complex”, should be really expanded to: “beware of the military-industrial-congressional complex”

    Other large companies immediately caught on this taxpayer funded corporate welfare.

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • akear: The android phone accounts for 73% of all smartphones purchased. Apple in comparison has a much smaller...
  • EBFlex: Scotty I get it. But that’s a very specific case. Plus a gas powered generator is a much better option...
  • el scotto: Flexy, on a farm almost nothing breaks in close vicinity to a wired power outlet. F-150’s, which you...
  • el scotto: @deanst Sir, we also sent oil back to our polite neighbors to the north.
  • el scotto: @DenverMike Sir, perhaps GM or Ford might -gasp- give away a few fleet vehicles. Have companies run them...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber