A steep, ongoing decline in the sales of Elon Musk’s Tesla vehicles are putting at risk the revenue it earns from selling carbon credits, according to a report by US news publisher Politico.
Electric vehicle-maker Tesla has sold billions of dollars worth of carbon credits since 2017, raking in a record $2.76 billion just last year.
For this year it has deals to sell credits to European carmakers who are still selling gasoline-powered vehicles so they can avert huge fines outlined by the region’s emissions laws.
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An EU filing in January showed Stellantis, Toyota, Ford, Mazda and Subaru have planned to pool carbon emissions with Tesla to comply with the EU’s rules.
But a sharp decline in Tesla sales in Europe are putting that tie-up at risk, Politico reported. The Tesla pool is already falling behind the 2025 emissions targets, the report said, citing data from IS non-profit The International Council on Clean Transportation (ICCT).
The sales decline in Europe comes as a growing number of people are distancing themselves from the company due to a swirl of controversies surrounding Musk, such as the sacking of hundreds of US government employees.
In focus have been his two Nazi salutes at an event celebrating the presidential inauguration of Donald Trump, and increasing support for far-right parties in Britain and Germany on his social media platform X.
In January, he also courted criticism for saying ‘Germans should not feel guilt for the sins of their great-grandparents’ referring to the country’s Nazi past.
The result has been an outpouring of anger and disgust, that has spanned from people selling their Teslas and the company’s stock, to outright protests and vandalism at Tesla showrooms across Europe.
Just this week, Tesla properties, including cars parked outside a dealership in France and seven charging stations in the US state of Massachusetts were found on fire. Authorities suspect arson in both cases.
Sales plunge
The anger has also reflected in the EV-maker’s sales across the globe, especially Europe. In Sweden, Norway and Denmark sales are down between 42% to 48% year-on-year, despite rising overall EV demand in the three countries.
In France Tesla registrations are down by 45% over the first two months of the year compared to the same period in 2024.
In Germany, Tesla sales declined by 76% in February as against a near 31% jump in overall EV sales in the country for the month.
Outside of Europe, sales of the electric vehicle-maker have plunged 72% in Australia.
Meanwhile, sales of its China-made electric vehicles dropped 49.2% in February from a year earlier to 30,688 cars, the lowest since August 2022. In China, the US automaker faces pressure from Chinese rivals in a relentless ‘smart’ EV price war.
- Vishakha Saxena
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