Tesla Making (Some) Money by Selling Electric Car Credits to Honda

We all know Tesla Motors has grand plans to eventually be the next great U.S. automaker and sell EVs made for all walks of life, but right now it is stuck building a $100,000 plug-in toy for the rich — the Roadster.

Don’t get me wrong, Tesla deserves beau coup credit for making a business case that there is demand for EVs. In fact, at last year’s LA Auto Show, GM’s Bob Lutz came right out and said that Tesla gave GM “major impetus” and went on to say that he is “thankful to Tesla for furnishing the proof that was needed for those of us who championed the Volt within GM that other people believed in lithium-ion technology as well.”

And while all of that is great and heartwarming, the cold fact of the matter is that Tesla is currently a money loser. In recent filings to the U.S. Securities and Exchange Commission in preparation for their IPO (that Tesla hopes will raise at least $100 million), normally tight-lipped Tesla was forced to reveal that they’ve lost money every year since their inception in 2003. Bummer.

Of course, this doesn’t really mean much right now as Tesla has secured almost a billion dollars in backing, including about half a billion in low interest loans from the U.S. government (much like its nemesis, Fisker). But it does give you pause to think about how on Earth Tesla can pull itself out of the pit it’s dug. If EVs catch on like we all think, no problem. But if the road turns out to be a long hoe, Tesla could be in for a bumpy ride — if not a terminal one.

One positive revelation from Tesla’s SEC filing: due to California’s regulatory requirements for automakers of a certain size to be selling zero emissions vehicles in the state, Tesla has been able to sell ZEV credits to the tune of $37,500 per vehicle to Honda — because, as we all know, Honda lacks any real plan for electric cars right now. So far Tesla has sold 368 of those credits to Honda for $13.8 million, and has plans to sell about $11 million more. So even if Tesla can’t make money selling their Roadster, they can at least make money off the automakers that are hesitant to jump on the EV bandwagon.

Nick Chambers

Not your traditional car guy.