Tesla has built its reputation as a leader in the electric vehicle industry.
Known for its innovation, the company has influenced the global market, pushing traditional automakers toward electrification.
While Tesla earns billions from car sales, it also profits in less obvious ways.
One of its most lucrative side businesses involves selling emission credits to other manufacturers struggling to meet environmental regulations.
Selling Excess Emission Credits
The European Union has introduced stricter emission limits for automakers, requiring them to lower average CO₂ emissions to 93.6 grams per kilometer in 2025.
This is a significant reduction from previous limits, forcing many manufacturers to find ways to comply, according to Moto.
Some companies have focused on improving combustion engine efficiency or increasing the share of hybrid and electric vehicles in their fleets.
Others, unable to meet the new standards quickly enough, are turning to Tesla for help.
Tesla, which exclusively produces electric vehicles, does not have to worry about emissions penalties. Instead, it has the ability to sell its excess emission credits to other automakers.
By purchasing these credits, manufacturers can legally offset their higher emissions and avoid costly fines.
This arrangement is expected to generate significant revenue for Tesla. Industry analysts estimate that selling emission credits could bring Tesla up to $1.1 billion in revenue.
Several major automakers, including Toyota, Ford, and Stellantis, are reportedly in talks with Tesla to secure these credits.
Tesla has opened applications for companies interested in purchasing credits, with a deadline of February 5.
The automaker will assess potential partners based on their needs and Tesla’s capacity to assist them in meeting the regulatory targets.
Other automakers are also exploring this opportunity. Volvo and Mercedes-Benz are expected to generate around $330 million each through similar credit sales.
While their earnings are substantial, Tesla’s dominant position in the electric vehicle market gives it a much greater advantage.
