Tesla is bailing out Canadian automakers once again: here's how

"Tesla is bailing out Canadian automakers once again, as some companies in the country are consistently failing to reach mandated minimum sales targets for emission-free vehicles. Many countries and regions across the world have enacted mandates that require car companies to sell a certain percentage of electric powertrains each year in an effort to make sustainable transportation more popular. These mandates are specifically to help reduce the environmental impacts of gas-powered cars."

"The only manufacturer that would have a surplus of credits is Tesla, because all they do is sell electric vehicles. A manufacturer has to enter into an agreement with them to purchase credits to help them meet the mandate. Tesla has made just over $1 billion this year alone in automotive regulatory credits, which is revenue acquired from selling these to lagging car companies. Kingstone believes Tesla could be looking at roughly $3 billion in credit purchases to comply with the global regulations."

Canada requires 20 percent of new car sales in the 2026 model year to be emissions-free, rising to 100 percent by 2030, with noncompliance fines of $20,000 per vehicle. Automakers can avoid fines by purchasing emissions-free sales credits from companies with surpluses. Tesla is the only manufacturer with a surplus of emissions-free sales and will sell credits to other automakers that fall short. Tesla has earned just over $1 billion this year from regulatory credits and could see roughly $3 billion in credit sales as regulations tighten. Other automakers are falling short primarily due to slow execution in the EV market.

Read at TESLARATI