With the election of Donald Trump as the next to take the seat as the President of the United States, there are fears that he could take away zero-emission vehicle credits. These are basically incentives to help both customers and manufacturers to push for the wider adoption of electric vehicles. If removed, many believe that it would be hard to justify getting an EV or making them. According to Tesla Motors CEO Elon Musk, his company doesn’t have anything to fear if this ends up being the case.
Musk says that Tesla will actually become more competitive if Trump decides to have the ZEV credit removed, Business Insider reports. The billionaire made this pronouncement during a Q&A session held Thursday last week. He also notes how fundamentally wrong it was to assume that the removal of the ZEV credit would hurt Tesla, in the first place.
This misconception stems from the fact that ZEV credits are a lucrative source of money for Tesla because of how the law is constructed. Companies that don’t earn enough ZEV credits will be facing fines. Earning these credits is usually done by selling a certain number of EVs, but it can also be bought from other companies that have already earned a lot of these credits. Since Tesla sells only EVs, it has plenty of ZEV credits to spare.
Unfortunately, the law actually makes it really easy to earn these credits, which then makes it hard for companies like Tesla to make much money out of it. Musk actually went on a tirade during a Q2 earnings conference about the disadvantages that the ZEV credit system comes with for Tesla.
According to Musk, other major auto companies have more to gain with the credit system than does Tesla because it doesn’t scale, Gizmodo reports. Then again, he also doesn’t advocate for the elimination of the ZEV credit. Rather, Musk simply wants refinements to the law to make it more advantageous to sell more EVs on a large scale rather than simply trying to duck a fine.


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