US Edition
The Big Problem for Tesla that Isn’t Getting Much Attention
UNITED STATES, JUL 21 – The removal of fuel economy penalties by a recent Republican bill cuts Tesla's regulatory credit revenue by 75% next year, threatening a key profit source amid sales declines.
- On July 4, 2025, US President Donald Trump signed a bill ending CAFE penalties, eliminating automakers' incentive to purchase regulatory credits from Tesla.
- Under the long-standing CAFE program introduced in 1975, the law also ended EV tax credits of $US4,000-$7,500 on September 30, 2025, and the US Department of Transportation said CAFE aims `to reduce energy consumption by increasing the fuel economy of cars and light trucks`.
- According to William Blair analysts, they are making conventional ICE vehicles more competitive while making EVs less competitive, analysts added, projecting Tesla’s credit revenue to fall by 75% next year and vanish by 2027.
- William Blair analysts said `The elimination of the corporate average fuel economy fines requires a reset in expectations`, while Tesla reported plunging first-quarter profits and warned of another steep drop due on Wednesday.
- Uncertain rule changes threaten future credit sources from the US Environmental Protection Agency and California's zero-emission vehicle program.
22 Articles
22 Articles
Things Are Looking Really, Really Bad for Tesla
Elon Musk's carmaker Tesla is widely expected to disappoint with its Q2 earnings report later today. Demand for the company's EVs has dried up significantly over the past 18 months, driven in large part by its exceptionally divisive CEO's efforts to alienate buyers at the exact moment that the company is facing a flood of high-quality international competition. Deliveries fell a record 13.5 percent this quarter compared to a year earlier — and t…
For years, Tesla has earned billions of dollars from its competitors only for the sale of electric vehicles. But that unexpected gain is about to disappear, just when the company needs it most. Sales of regulatory credits have been a major source of revenue for the car manufacturer, which currently faces a fall in its sales and profits. Traditional car manufacturers buy Tesla credits to continue selling cars to gasoline that would otherwise viol…
Tesla is under heavy pressure ahead of its earnings report. Sales are expected to decline, top executives have left, competitors have gained momentum while consumers are hesitant. At the same time, investors are worried that Elon Musk is focusing on something other than the electric car giant.
Colorado Springs Gazette
Denver GazetteTesla's easy money from regulatory credits set to dry up amid weakening sales
By Abhirup Roy and Akash Sriram
EV companies face uncertainty as tax credits end
Electric vehicle advocates say battery plants like those under construction in Indiana will face major setbacks that could lead to fewer jobs and put billions of publicly invested dollars at risk, after Republican lawmakers this month approved President Donald Trump’s…
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