Tesla Demands Return to Obama Fueling Restrictions, Reasons Obvious

Matt Posky
by Matt Posky
tesla demands return to obama fueling restrictions reasons obvious

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]

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  • FreedMike FreedMike on Mar 26, 2021

    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.

  • Schmitt trigger Schmitt trigger on Mar 26, 2021

    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.

  • Lou_BC Cool car but 35k USD?
  • Lou_BC I've owned and ridden many litre class sport bikes. Those bikes render anything on 4 wheels boring. This is cool but even if I had the cash, it would be a hard pass.
  • Jeff S Some of us don't care either way we are not into this type of car. Most of these will be stored in garages waiting for their value to go up. As someone above noted this is an old body style which is retro 70s Challenger which after researching it came out in the 2008 MY which means a long run for a model that is in its 16th year. I have always liked these but if I bought one I would not spend this kind of money on one probably get the V-6 version and use it as a family car but then I am not into drag racing or muscle cars. For the type of car it is it has a decent rear seat and not too bad of a trunk. Most of us are not going to spend 100k for any vehicle at least currently so its not something most of us will buy and stick in a garage waiting for its value to increase. I am glad that these editions came out for those who can afford them and it keeps a little more color into what has become a very dull vehicle market but then with age I pick the dull appliance like reliable vehicle because that's what I need. Impressive car but not for me.
  • Jonathan The Germans. So organized they can appear disorganized. I agree with some others, classic names like Thunderbird, Imperial, Grand Prix, Ambassador etc. just have more appeal.
  • Bobbysirhan A friend had one when they first came out. He was CFO of some green California company and could charge the Volt at work. At home, the PHEV gave him an excuse to make his wife park her nicer car outdoors while the Volt get their condo's one-car garage. He liked the Volt, and he spent very little on energy during the 'first one's free!' era of EV ownership. Of course, the green company went bust soon after, and he wound up with a job that involved far more driving and ultimately the need for a more substantial car. I drove the Volt once after his wife had made a return trip to Los Angeles, depleting the battery. I don't know what a first gen Volt drives like with a charged battery, but it was really gutless with two adults, a yellow lab, and a dead battery. My other memory of it was that it had a really cramped back seat for a car that was about as large as a Civic. My friend who bought it liked it though, and that's not always been the case for GM vehicles.