California buyers: Is Tesla splitting the value of energy credits with you?

pbleic said:

I know that this is pretty unlikely, but I found an article in today's WSJ quite interesting: Christopher Knittel: Californias Auto-Emissions Policy Hits a Tesla Pothole - WSJ.com

According to the article, Tesla gets seven "credits" for each Model S sold in California, and these are worth $5K each, for a total of $35,000. Seems only fair that it should cost California buyers less to buy the car. Apparently, Testa pockets the difference and uses it to achieve profitability, from information I have read elsewhere. Does anyone have any more information or thoughts on this?

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What a silly idea.
The ZEV credits are a credit bought from Tesla by other manufacturers. They change quarter to quarter.
Most companies have some investments as well, in real estate, stocks, other companies, etc.
Would you expect any company to share the profits from an investment with customers?
If so, should the company also pass along investment losses?

First of all, promotion of electrification and ZEVs are hardly "unintended consequences" of federal and state policy. That is precisely what the ZEV mandate and federal double-credit is designed to do.

Second, the "wealth transfer" only exists because some companies have chosen to meet the mandate by buying credits.

Third, criticizing the program because Tesla makes money from it is insane. The Model S is exactly the kind of car the mandate was intended to create. A far more justified criticism is that the mandate only leads to craptacular compliance cars from most other manufacturers.

Finally, the professor claims: "While the zero-emissions mandate may shift some Prius buyers to an electric car, the best option for reducing petroleum consumption and greenhouse-gas emission is shifting a large SUV buyer into a less-large SUV."


No, actually. It's by shifting a large SUV buyer into an electric SUV. The genius of the Model S is that it isn't being cross-shopped by people buying Priuses; it's being cross-shopped by people thinking of big V8 German sedans.

pbleic said:

@ Zythryn. Why do so many people in this forum jump to ad hominem attacks? I posed a concept - an idea. Is it really necessary to call it "silly?" Does using this insulting word make you feel better? You bring up reasonable points that I was looking for that are seriously diminished by your unnecessary opening phrase.

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It wasn't ad hominem. He called the idea silly, not the man and then he explained why.

They shouldn't split the money, because the system is designed to ensure investment in ZEV. It's an ironic suggestion given that Tesla will announce 2013FY including 2013Q4 where they expect negligible sales of credits, and that generally the value of credits is falling. Tesla is actually getting more consistent revenue from Social Cost of Carbon credits.

pbleic said:

@ Zythryn. Why do so many people in this forum jump to ad hominem attacks? I posed a concept - an idea. Is it really necessary to call it "silly?" Does using this insulting word make you feel better? You bring up reasonable points that I was looking for that are seriously diminished by your unnecessary opening phrase.

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The community is friendly only if you are 100% on board with "everything". Pointing out flaws in the ZEV system, the car, the management and other aspects will get you the responses you are mentioning. Point out flaws at your own literary peril

There are a lot of flaws with the ZEV system.

I don't think it's a bad idea per se, but what makes it falter IMO is that fact that ZEV credits is not something you can count on tomorrow. If you look at how Tesla is doing it country-per-country they are actually pricing the car quite differently in order to reach the same level of profit (US price v.s. different countries in the EU with different tarifs v.s. Chinese price etc) - so in a way they are doing what you are asking for but not with regards to ZEV credtis. Tesla have said from the start that income from ZEV credits is a bonus for them and not something they count on. Remeber that for example the SC network was first and most extensively built out in California, and I guess some of the money for that came from ZEV credits.

pbleic said:

The idea was my idea. I was the man, not the writer of the article. I floated it as an idea. Calling an idea silly is insulting to the creator of the idea try it on your spouse or significant other and you will see. Why is it needed? It just leads to an escalating flame war in a lot of threads.

How about: I don't think this is a good idea. Let me explain why.

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That wouldn't be the same. By "silly", Zythryn meant something like "shows a complete lack of understanding of the ZEV credit system and market." "I don't think this is a good idea" is a lot of words that just hides true feelings and personally I find that annoying and think it leads to a worse outcome. "No" would be shorter and much more accurate.

Did you ask yourself the following two questions:
What is the purpose of the ZEV credit system?
Is Tesla currently acting in a way that fits the purpose of the system?

pbleic said:

The idea was my idea. I was the man, not the writer of the article. I floated it as an idea. Calling an idea silly is insulting to the creator of the idea try it on your spouse or significant other and you will see. Why is it needed? It just leads to an escalating flame war in a lot of threads.

How about: I don't think this is a good idea. Let me explain why.

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I am sorry if you took my description of the idea as a personal attack, that was not the intent.

Criticism of the ZEV credit program is also not "silly" but the idea expressed was. If you prefer the more soothing terms such as 'your understanding of the ZEV credits is lacking...' please feel free to replace the first sentence with that.

Now, if you thought I brought up some reasonable points, why not respond to those rather than responding to what you took as a personal attack?

pbleic said:

I know that this is pretty unlikely, but I found an article in today's WSJ quite interesting: Christopher Knittel: Californias Auto-Emissions Policy Hits a Tesla Pothole - WSJ.com

According to the article, Tesla gets seven "credits" for each Model S sold in California, and these are worth $5K each, for a total of $35,000. Seems only fair that it should cost California buyers less to buy the car. Apparently, Testa pockets the difference and uses it to achieve profitability, from information I have read elsewhere. Does anyone have any more information or thoughts on this?

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It's really none of your business. Tesla sets the price of its cars. Either you pay it or you don't. Whatever Tesla is getting on its end is none of your concern. You are the customer.

That article demonstrates a lack of understanding of the ZEV credit system and what it is intended to accomplish. Tesla is using it as intended.

Just another example of how the WSJ goes to great lengths to attack companies that use sustainable energy approaches to disrupt established business models.

Ok, completely non ad-hominem, I don't think your idea makes any financial sense for Tesla. Tesla can set their pricing however they want to, and prospective buyers can either buy one or not.

Tesla is currently supply constrained, not demand constrained, so what incentive do they have to reduce their prices?

Would it be fair to non-California buyers to do what you suggest? The ZEV credits are going to go down and disappear over time anyway.

As a Tesla owner and TSLA stock holder, I have a double-incentive for Tesla to do well financially.

bonaire said:

The community is friendly only if you are 100% on board with "everything". Pointing out flaws in the ZEV system, the car, the management and other aspects will get you the responses you are mentioning. Point out flaws at your own literary peril

There are a lot of flaws with the ZEV system.

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?? OP complained that he was being attacked personally by complaining he was the subject of an "ad hominem" attack on him/her. Unless Zythryn edited his original response, on the contrary, Zythryn's response is by definition NOT ad hominem as it is only addressed as a rebuttal and critique of the OP's idea. There is not a single attack on OP as a person in that response. There was no - "you are a bad person" or "you aren't educated enough" or "I don't like the way you cut your hair" and therefore your idea is dumb.

Here, clearly the WSJ author doesn't have a clue how the ZEV credit system is designed to work and is working, nor does the OP posit any credible reasons why Tesla should be offering California customers an additional rebate. None of that is ad hominem.

California is offering the Telsa customers an additional rebate. If WSJ didn't go over this, I wonder why.

pbleic said:

...
And, @Zythryn Thanks for clarifying that this wasn't a personal attack. I am not talking about you specifically, just a recurring lack of civility in some of the discourse. When we write a post, we should think about whether we would say this to co-workers, for example.

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Most certainly, and I agree.
I promise you, I have spoken face to face using the same words when people express such ideas.
That said, please don't read into statements intentions or words that aren't there.

Now, to get back to the point you brought up... Did you have further comment or discussion?
Do you agree that the article misrepresents the ZEV credit system, or do you still believe Tesla should pass along those to customers?

You titled the thread with a question that you obviously know the answer to, and designed to provoke an argument. Then you express surprise that some people reacted negatively to your question. The only surprise here is that no one has used the "t" word yet, because that's what the original post was.

TexasEV said:

You titled the thread with a question that you obviously know the answer to, and designed to provoke an argument. Then you express surprise that some people reacted negatively to your question. The only surprise here is that no one has used the "t" word yet, because that's what the original post was.

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Yep. The title is definately inticing smart alec responses. Thinking that Tesla needs to split the energy credit with anyone borders on entitlement.

pbleic said:

Yes, technically you are correct that it is not ad hominem. But it is insulting to tell someone that their idea is silly. Or stupid. Or ignorant. The veil of the forum allows people to do something they would (or at least should) never do in person. It isn't better to be direct in this way; it is better to be polite.

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Sez you. (That is your opinion, but I disagree.)

Also, being called ignorant isn't an insult unless somehow you're expected to have knowledge of something, and the ZEV credit system isn't one of those things. (I don't claim expertise, just knowledge I've gained as a result of following various EV.) In fact, I think being called ignorant is the opposite of insulting, because it says that your opinion is based on missing information.

Anyway, to repeat, it's a silly idea, because the credits are currently working as intended: being spent on development of BEVs.