Tesla made over $11 billion by selling regulatory credits, a revenue stream from automakers needing to meet CAFE and emission requirements. CEO Elon Musk supported ending all U.S. subsidies, including EV tax credits. The recent passage of the Big Beautiful Bill eliminated these subsidies and the fines that drove automakers to buy credits. This decision significantly affects Tesla's revenue since it no longer gains from regulatory credits as automakers have other means to comply with regulations.
Tesla's electric empire wasn't just built on the back of its battery-powered cars. It was subsidized by automakers who purchased regulatory credits from Tesla to continue to build gas-guzzlers while avoiding fines from the U.S. government.
With the passage of the Big Beautiful Bill, the EV subsidies are going away, and with it, the monetary implications of automakers not being compliant with fleet-wide Corporate Average Fuel Economy (CAFE) requirements.
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