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Tesla could face emissions credit tax in Washington

Tesla could be subject to a tax on its emissions credit sales in Washington, just ahead of the beginning of the state’s phase-out of gas vehicles.

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Credit: Tesla

Tesla could face a new tax on the emissions credits it sells to other automakers, as introduced this month by legislators in the state of Washington.

As detailed in an op-ed from the Wall Street Journal on Monday, Democrats in Olympia have filed two companion bills proposing a 10 percent tax on the electric vehicle (EV) emissions credits Tesla sells, valued at roughly $1.79 billion globally last year. The emission credits market was created out of regulations requiring automakers to start phasing out gas vehicles, allowing Tesla, which only makes EVs, to sell the credits to gas automakers which aren’t able to meet the upcoming phase-out goals.

“The creation of these tradeable and bankable credits creates the opportunity for a financial windfall accruing to firms that are not burdened by the legacy production of internal combustion engine vehicle,” legislators wrote in the proposal. “It is the intent of the legislature to address this unintended outcome by taxing the windfall profits.”

Olympia Republicans went on to file a counter to the bill, which would effectively prohibit such a tax as well as “any other tax that applies to only one individual, business, or entity.”

READ MORE ON TESLA EMISSIONS CREDITS: Tesla to help automakers comply with the EU’s 2025 CO2 emission rules

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Washington joined California in 2020 in setting regulations to phase out gas vehicles by 2035, requiring a maximum of 20 percent plugin hybrid vehicles sold in the year along with making 80 percent of the year’s sales fully electric. The initial phase-out regulations kick off in 2026, requiring automakers to make 35 percent of their new vehicles fully electric or plugin hybrids, before that level increases to 51 percent in 2028, and 68 percent in 2030.

Tesla’s vehicle sales in Washington made up just 10 percent of those sold in the state last year, while the company has about 54 percent of all emissions credits in the state, according to the Washington Policy Center.

The Wall Street Journal editorial calls the new proposals “abusive lawmaking,” saying that targeting a single company would be strongly opposed by progressives if it were suggested by the Trump administration. Additionally, the op-ed highlights that Tesla and CEO Elon Musk set the price for the emissions credits, meaning that they could simply charge automakers more for them to make up for money lost on the tax.

U.S. Supreme Court to hear challenge on California emission rule waiver

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Zach is a renewable energy reporter who has been covering electric vehicles since 2020. He grew up in Fremont, California, and he currently lives in Colorado. His work has appeared in the Chicago Tribune, KRON4 San Francisco, FOX31 Denver, InsideEVs, CleanTechnica, and many other publications. When he isn't covering Tesla or other EV companies, you can find him writing and performing music, drinking a good cup of coffee, or hanging out with his cats, Banks and Freddie. Reach out at zach@teslarati.com, find him on X at @zacharyvisconti, or send us tips at tips@teslarati.com.

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Tesla begins deliveries of its affordable Model Y Standard

The ‘Standard’ Model Y is now getting ready to fall into customer hands, according to some owners, who are preparing for or have already taken delivery of the new model.

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Credit: Tesla

Tesla has officially started deliveries of the affordable Model Y ‘Standard’ less than three weeks after the company launched it on October 8.

Following the loss of the $7,500 electric vehicle tax credit, Tesla launched the Model 3 and Model Y ‘Standard’ trims, both coming in at sub-$40,000 starting prices, but being stripped of many of the features that come in the ‘Premium’ configuration levels.

Tesla launches two new affordable models with ‘Standard’ Model 3, Y offerings

The vehicles are Tesla’s answer to the loss of the tax credit, which was phased out by the Trump Administration. Tesla said it has been developing these models for over a year, as it revealed in early 2024 that it was working to create new vehicles that would be more affordable.

It also said it was developing vehicles to be built on a new-generation platform, which is a likely reference to the Cybercab, which has also been spotted at both Gigafactory Texas and the Fremont Factory.

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The ‘Standard’ Model Y is now getting ready to fall into customer hands, according to some owners, who are preparing for or have already taken delivery of the new model:

Tesla slated deliveries for November when the two vehicles launched on October 8, but that seems to be an underpromise and overdeliver type of situation.

The new features for the Model Y include:

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  • New athletically tuned exterior and new alloy wheels to improve aerodynamics
  • 15.4″ touchscreen in the front, the same as the other trims
  • Available in three colors: Stealth Grey (free), White ($1,oo0 extra), Diamond Black ($1,500 extra)
  • Textile and vegan leather interior
  • Range sits at 321 miles
  • New front fascia
  • Covered glass roof (textile on inside)
  • Windows are not acoustically laminated for a quieter cabin
  • Manual mirrors and seats
  • Smaller frunk
  • No rear infotainment screen
  • No basic Autopilot
  • 69 kWh battery
  • New 19″ Aperture wheels
  • 0-60 MPH in 6.8 seconds
  • 7 speaker stereo, down from 15 speakers in premium models
@teslarati 🚨 Tesla’s Affordable Models are here! Let’s talk about them! #tesla #fyp #viral #teslaev #elonmusk ♬ Natural Emotions – Muspace Lofi

 

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Investor's Corner

Tesla analyst says this common earnings narrative is losing importance

“Numbers are going down next year, but that’s ok because it’s all about autonomy.”

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(Credit: Tesla)

A Tesla (NASDAQ: TSLA) analyst is doubling down on the idea that one common earnings narrative is losing importance as the company continues to work toward new technologies and projects.

This week, Tesla will report earnings for the third quarter, and one thing people always pay attention to is deliveries. Although Tesla reveals its deliveries for the quarter well before it reports earnings, many investors will look for commentary regarding the company’s strategy for responding to the loss of the $7,500 tax credit.

Tesla has made a few moves already, including a lease deal that takes a substantial amount of money off, launching new Standard models, and cutting up to 23 percent off of lease pricing.

Tesla makes crazy move to spur short-term demand in the U.S.

However, analysts are looking at the company in a different light.

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Aligning with the narrative that Tesla is not just a car company and has many different projects, Gene Munster of Deepwater Asset Management believes many investors need to look at another part of the business.

Munster said the delivery figures for Q3, which landed at 497,099, the highest in company history, were padded by customers rushing to showrooms to take advantage of the expiring tax credit.

He believes that deliveries will be more realistic in subsequent quarters, but investors should not worry because the focus on Tesla is not going to be on how many cars it hands over to customers:

“Numbers are going down next year, but that’s ok because it’s all about autonomy.”

Tesla has been working nonstop to roll out a dedicated Robotaxi platform in various cities across the United States, and has already launched in two states: Texas and California.

It has also received regulatory approvals to test driverless Robotaxis in Arizona and Nevada, while seeking permissions in Florida and other states, according to the company’s online job postings.

Munster continued:

“Most people are hyper-focused on the Robotaxi opportunity and not focused as much on FSD.”

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While Robotaxi is incredibly important, Tesla’s Full Self-Driving (Supervised) suite is also extremely crucial moving forward, as it sets the stage for the company to roll out a formidable self-driving service.

Tesla rolled out its newest FSD software to more owners last night, and as it expands, the company is gaining valuable data to refine its performance.

Earnings will be reported tomorrow at market close.

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Tesla rolled out a new feature with FSD v14 to fix a major complaint

One of the most crucial cameras for FSD operation is located at the top of the windshield, and some owners have complained about condensation or other debris accumulating here, which impacts FSD’s availability during drives.

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Credit: The Kilowatts | X

Tesla rolled out a new feature with Full Self-Driving (Supervised) v14.1.3 in an effort to fix a major complaint from owners.

Tesla’s approach to self-driving is significantly different than other companies as it only relies on cameras for operation. Tesla Vision was launched several years ago and completely axed any reliance the suite had on sensors, as CEO Elon Musk’s strategy was unorthodox and went against the grain.

However, it has proven to be effective, as Tesla still operates the most refined semi-autonomous driving suite in the United States.

There are some drawbacks, though, and one of them has to do with the obvious: cameras get dirty and need to be cleaned somewhat regularly.

One of the most crucial cameras for FSD operation is located at the top of the windshield, and some owners have complained about condensation or other debris accumulating here, which impacts FSD’s availability during drives:

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Tesla has been working to confront this issue, and in classic fashion, it used a software update to work on resolving it.

With the rollout of Full Self-Driving v14.1.3 and Software Version 2025.32.8.15, Tesla added a new feature that aims to clean the front camera efficiently without relying on the owner to do it manually.

Tesla Full Self-Driving’s new version officially gets a wider rollout

In its release notes for the suite, it said:

“Added automatic narrow field washing to provide rapid and efficient front camera self-cleaning, and optimize aerodynamics wash at higher vehicle speed.”

If the camera starts to have some issues with visibility, the car will automatically clean the front windshield camera to avoid any issues:

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This new addition is a small but mighty change considering all things. It is a necessary process to keep things operational and avoid any disruptions in FSD performance. It is also a testament to how much better Tesla vehicles can get with a simple software update.

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