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Tesla’s 2023 regulatory credits generate $1.79 billion in revenue

Credit: Lars Østergaard/X

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Tesla’s 2023 regulatory credits generated an additional $1.79 billion in revenue, according to its 10-K filed last week.

The money Tesla makes due to other carmakers needing assistance to reach emissions standards continues to accumulate, and since 2009, it has made almost $9 billion in revenue because of the system.

Bloomberg reported this morning that Tesla’s $9 billion in revenue due to the sale of regulatory credits has helped the company obtain what is basically pure profit. Former Tesla Chief Financial Officer (CFO) Zachary Kirkhorn, who left the company last year, said the credits would eventually go away as other automakers caught up to emissions standards.

However, that was in 2020. Tesla has brought in over $1.7 billion in credits in both 2022 and 2023, while 2020’s total was $1.58 billion.

Although many large automakers have pledged to transition to EVs, it has been a much more difficult road than initially imagined.

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Volkswagen and General Motors are two companies mentioned in the report that have had trouble reaching EV goals and have, in turn, needed help meeting emissions standards.

Tesla’s rumored sale of regulatory credits to VW to last ‘two to three years’

These companies and their shortcomings in meeting the strict guidelines have basically given Tesla the opportunity to continue to take cash from them without

Fiat-Chrysler is another company that needed assistance from Tesla to reach emissions standards in the European market a few years ago.

It had fallen well behind in reaching the strict emissions goals the European Union had set, and Tesla, along with Fiat-Chrysler, had come to an agreement that would “pool” emissions together, lowering FCA’s CO2 output per vehicle.

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Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

Energy

Tesla inks multi-billion-dollar deal with LG Energy Solution to avoid tariff pressure

Tesla has reportedly secured a sizable partnership with LGES for LFP cells, and there’s an extra positive out of it.

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Credit: Tesla

Tesla has reportedly inked a multi-billion-dollar deal with LG Energy Solution in an effort to avoid tariff pressure and domesticate more of its supply chain.

Reuters is reporting that Tesla and LGES, a South Korean battery supplier of the automaker, signed a $4.3 billion deal for energy storage system batteries. The cells are going to be manufactured by LGES at its U.S. factory located in Michigan, the report indicates. The batteries will be the lithium iron phosphate, or LFP, chemistry.

Tesla delivers 384,000 vehicles in Q2 2025, deploys 9.6 GWh in energy storage

It is a move Tesla is making to avoid buying cells and parts from overseas as the Trump White House continues to use tariffs to prioritize domestic manufacturing.

LGES announced earlier today that it had signed a $4.3 billion contract to supply LFP cells over three years to a company, but it did not identify the customer, nor did the company state whether the batteries would be used in automotive or energy storage applications.

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The deal is advantageous for both companies. Tesla is going to alleviate its reliance on battery cells that are built out of the country, so it’s going to be able to take some financial pressure off itself.

For LGES, the company has reported that it has experienced slowed demand for its cells in terms of automotive applications. It planned to offset this demand lag with more projects involving the cells in energy storage projects. This has been helped by the need for these systems at data centers used for AI.

During the Q1 Earnings Call, Tesla CFO Vaibhav Taneja confirmed that the company’s energy division had been impacted by the need to source cells from China-based suppliers. He went on to say that the company would work on “securing additional supply chain from non-China-based suppliers.”

It seems as if Tesla has managed to secure some of this needed domestic supply chain.

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Lifestyle

Tesla brings perhaps the coolest interior feature to cars in latest update

Tesla adds on to the “fun” aspect of its vehicles.

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Credit: Tesla

Tesla has brought perhaps the coolest interior feature to its cars in a new update that is rolling out to vehicles now.

The feature will require a newer vehicle that has interior ambient lighting, which is present on the new Model S, Model X, Model 3 “Highland,” and Model Y “Juniper.” The Cybertruck also has ambient lighting strips throughout.

Tesla Model Y’s ambient lighting design changes revealed in leaked video

With the Version 2025.26+ Software Update, Tesla is rolling out a new “Sync Accent Lights w/ Music” feature, which is available on the Tesla Toybox:

To enable the feature, you’ll access the Toybox, choose “Light Sync,” and then choose “Sync Accent Lights w/ Music.”

Although it does not improve the performance of the vehicle, it is yet another example of Tesla making one of the coolest cars out there. This is truly a cool add-on that can be used to impress your friends and family.

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Tesla uses Sydney Sweeney ad controversy to flex its car seat testing strategy

Tesla says its seat robot also has great jeans, just like Sydney Sweeney.

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Tesla Model S Updated Front Seats
Tesla Model S Updated Front Seats (Source: Tesla)

Tesla has a knack for making light of a situation. As tensions seem to be high over American Eagle’s latest jeans ad featuring Hollywood it girl Sydney Sweeney, the automaker saw it as a grand opportunity to show off its seat testing.

Tesla builds and does quality control on its own car seats, and they have been built at a factory just down the street from the Fremont Factory for some time. It also performs quality testing in-house.

Elon Musk shares first look at Tesla Model 3 white seats at factory

Outside of the Tesla world, there is a strange controversy going on with Sydney Sweeney and her recent ad for American Eagle, where she describes her “good jeans.” Some see it as a commercial for jeans, others see it as something else, perhaps a political statement of some sort by the clothing maker.

Nevertheless, Tesla is making light of the joke and using it as a chance to show off its in-house seat testing, stating, “Our seats robot also has great jeans.”

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Here’s the post:

Tesla went on to refer to the robot as “Sydney Seatney.”

It is nice to see some companies still have a sense of humor, and as the controversy over a seemingly innocuous ad for a pair of jeans continues to rage on, it will be interesting to see who comes after Tesla for this one. It will obviously draw some attention.

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The video here is actually from 2019, and not from recently. The robot and machine used in this testing phase simulate long-term use. This is one of the most crucial testing processes the seats go through during the quality assurance phase.

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