To the California Air Resources Board:

It’s past time to stop the carbon credit gravy train for Tesla and other major automakers under greenhouse gas reduction programs created by your agency. Instead of lining shareholder pockets, your board should allocate the money collected under the standards to benefit Californians directly.

We’re outraged that last year Tesla enjoyed $2.8 billion of revenue from carbon credit schemes invented here and then copied by other states. Carbon credit income collected from motorists last year and transferred to Tesla equaled 39 percent of the company’s $7.1 billion in profits. We say this transfer from the motoring public to a company headed by the likes of Elon Musk doesn’t represent California values. 

That’s why we call on the California Air Resources Board today to stop future transfers by speedily amending its Zero Emissions Vehicle Standard and Low Carbon Fuel Standard. CARB should collect the money raised under these rules from automakers who don’t meet the zero emissions standard and from motorists at the gas pump* and use it for such things as:

• Transportation improvements,
• Building transit-oriented affordable housing,
• Clean air and carbon emissions reduction projects in polluted environmental justice communities,
• Employing fire-proofing strategies in rebuilding burned areas in Los Angeles County, and
• An annual carbon dividend credit for motorists, like Californians enjoy on their electric utility bills.

Moreover, it’s urgent that you act before Tesla can further profit from these state programs. That’s because your own data show Tesla holds almost 3 million electric car credits worth $9 billion.** 

Enough is enough. Amend these programs now to use the money for Californians rather than further enriching the world’s wealthiest man.

Notes:

* According to CARB’s own cost-benefit analysis, your recent amendments to the Low Carbon Fuel Standard would add 12 cents to the cost of a gallon of gas in 2024, 47 cents in 2025, and 52 cents per gallon in 2026. Your own report goes on to say the amendments will reduce per capita income in California by $287 in 2026, rising to a $699 reduction in per capita income in 2030. Much of this money will go to Tesla for supplying electric vehicle charging, even though electric car owners pay for charging. The low carbon fuel policy essentially allows Tesla to double dip for revenue.

** That’s at a time when the company boasted in a recent financial statement that its credit income is set to grow “as other automobile manufacturers scale back on their battery electric vehicle plans.” Since 2014, Tesla already has made $10.7 billion from selling credits generated under the CARB-developed programs. Even Gov. Gavin Newsom called it out, aptly noting: “There was no Tesla without California’s regulatory bodies, and regulations.”

References:

CARB Annual ZEV Credits Disclosure Dashboard, https://ww2.arb.ca.gov/applications/annual-zev-credits-disclosure-dashboard

Appendix C-1: Standardized Regulatory Impact Assessment, Proposed Amendments to the Low Carbon Fuel Standard Regulation, California Air Resources Board, September 9, 2023, https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2024/lcfs2024/appc-1.pdf

Tesla Earnings Shareholder Deck, 1-29-25, https://digitalassets.tesla.com/tesla-contents/image/upload/IR/TSLA-Q4-2024-Update.pdf

Tesla Form 10 Q, October 23, 2024, https://www.sec.gov/Archives/edgar/data/1318605/000162828024043486/tsla-20240930.htm

E&E, 1-15-2025, https://www.eenews.net/articles/musk-made-a-fortune-on-climate-credits-trump-is-targeting-them/

Government Technology, September 29, 2022, https://www.govtech.com/policy/gov-newsom-says-california-subsidies-powered-teslas-success