Connect with us
herbert diess elon musk herbert diess elon musk

Investor's Corner

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

(Credit: Herbert Diess/LinkedIn)

Published

on

Tesla’s rumored sale of its regulatory credits to Volkswagen to help the German automaker reach emissions targets is likely to last “two to three years,” according to VW Auto Group CEO Herbert Diess.

The sale of credits will help Volkswagen align with regional emissions targets that could affect the company’s ability to conduct business in China and the United States. The emissions targets are different in every country, some with more strict regulations than others. China has some of the toughest emissions regulations globally due to the massive number of passenger vehicles that operate in the country. Due to this fact, some automakers, like Volkswagen, must purchase regulatory credits from other automakers to meet the emissions targets. It helps the purchasing automaker avoid hefty fines, while it can help the selling automaker solidify financial safety and fund projects.

Tesla doesn’t have an issue reaching these targets due to its environmentally-friendly electric powertrains. For over a year, Tesla has been selling regulatory credits to other automakers, a deal that has helped Tesla fund some of its international projects. One of the most notable deals is Tesla’s sale of credits to Fiat-Chrysler Automobiles, requiring FCA to pay Tesla $2 billion through 2023. The sale was to help FCA reach the European Union’s CO2 requirement of 95g per kilometer in 2020. This deal recently ended after Stellantis CEO Carlos Tavares stated that the company would no longer need to purchase the credits from Tesla. This was due to the merger between Peugeot S.A. (Groupe PSA) and FCA in January 2021, which ultimately birthed Stellantis. Stellantis now controls 14 traditional automotive brands, including Fiat, Chrysler, Jeep, Maserati, and Peugeot.

However, Tesla isn’t losing all of its deals for its regulatory credits. It appears Volkswagen will still purchase credits from Tesla. Although it hasn’t been officially confirmed who VW will get its credits from, recent reports indicate that Tesla will be the seller. Recent comments from Herbert Diess, CEO of the Volkswagen Auto Group, on the company’s Earnings Call earlier today seem to indicate that the company will continue for several years.

“In Europe, we are confident that we will comply with the fleet targets,” Diess said during the Earnings Call. However, the case is different in China and the United States, and Diess says that the automaker will need to rely on credits to avoid the fines for “the next two or three years.” With VW’s expanding EV strategy, it appears that the German company will no longer need to purchase these credits by 2024 at the latest.

In China, VW will likely be purchasing the credits from Tesla. After a report from Reuters in April indicated that VW’s joint venture with state-owned Chinese carmaker FAW, called FAW-Volkswagen, would be purchasing credits from Tesla to meet the environmental standards set by the Chinese government. Three individuals close to the matter informed Reuters of the deal.

Concerns regarding Tesla’s financials and its ability to remain profitable without the excessive sale of EV credits continue to rage on. However, Tesla has shown that it generates revenue through several mediums, including automotive sales, car leases, and other investments, including the automaker’s Bitcoin purchase in late 2020. The $1.5 billion Bitcoin purchase was a way for not immediately used cash could generate “some level of return…but also preserve liquidity,” Tesla CFO Zachary Kirkhorn said during the company’s most recent Earnings Call.

Ultimately, it isn’t known who Volkswagen will purchase the credits from globally. However, if recent reports are correct, Tesla will be sending its credits to VW in return for hefty $56 per green credit prices.

Advertisement
-

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

Advertisement
Comments

Elon Musk

Elon Musk and Trump are closer than ever, and Tesla could be the big winner

Elon Musk sat beside Trump as AI leaders signed a voluntary White House safety accord.

Published

on

By

Elon Musk had the seat right next to President Donald Trump on Tuesday as the White House hosted the leaders of America’s biggest artificial intelligence companies for a lunch that ended with a voluntary industry accord on AI safety.

A seating chart Trump posted on Truth Social placed Musk at the president’s left in the East Room, with Nvidia CEO Jensen Huang on his right, according to an Associated Press reporter. Anthropic CEO Dario Amodei, OpenAI President Greg Brockman, Meta’s Mark Zuckerberg, Google’s Sundar Pichai, Microsoft’s Satya Nadella and Amazon founder Jeff Bezos also attended, along with Vice President JD Vance and House Speaker Mike Johnson.

After the lunch, Trump told reporters outside the West Wing that the executives had signed “The White House Accord on Superintelligence: A Joint Commitment on Frontier SI Responsibilities.” Johnson described it as a voluntary statement of principles built on “robust internal controls and layers of internal and external review,” while Zuckerberg said company boards would independently review reports from outside auditors. Trump called the document “morally binding,” said he would name a new AI czar within days, and signed an executive order formally renaming artificial intelligence “super intelligence,” CNBC reported.

Advertisement
-

Musk was not in the room for Tesla alone. Since SpaceX absorbed xAI, he runs the company behind Grok and one of the largest AI training operations anywhere. On September 25, he said another 220,000 Nvidia GB300 chips would come online at Colossus 2 within a week, with more expected in November and December.

SpaceX confirms third massive compute deal at Colossus data center

 

Advertisement
-

Musk also used the trip to restate his energy ambitions. “SpaceX is aiming together with Tesla to do 200 gigawatts of solar production per year,” he said at an event in Washington. It is the same combined target he laid out that feeds directly into Terafab, the Tesla and SpaceX chip venture that will need enormous amounts of power.

The showing between Musk and Trump has come a long way, since the two had the very public split in mid 2025 after Musk opposed the “Big Beautiful Bill” and left DOGE. They reconciled at Charlie Kirk’s memorial that September, and Trump later called their relationship “good”. Since then, Musk has joined Trump’s China delegation in May and attended last week’s White House state dinner for Chinese President Xi Jinping.

For Tesla, that access to government official could pay dividends. As Teslarati noted in January, federal autonomy rules, NHTSA oversight and a single national standard for driverless vehicles all run through an administration Musk can more easily reach directly as Tesla works to scale Robotaxi and Cybercab beyond Texas.

Continue Reading

Investor's Corner

Tesla showrooms picked clean ahead of Q3 end as demand looks strong

Published

on

Credit: @thaichiminh1907/X

Tesla (NASDAQ: TSLA) showrooms have been picked clean ahead of the end of the third quarter of the year, as demand looks to be strong and delivery estimates for new vehicles are pushed into late 2026 and early 2027.

Tesla appears to have sold out of many of its Model 3 and Model Y trim levels in the United States, as only the Model Y RWD and Model Y All-Wheel-Drive are available for delivery before the end of the year.

Additionally, many showrooms are either completely empty or void of all but just one demo unit within the buildings themselves in an effort to bolster what could be one of Tesla’s best quarters in vehicle deliveries in recent memory.

Advertisement
-

Additionally, when I spoke to the guys at Tesla Mechanicsburg two weeks ago, when I returned the Model Y L, their third hauler of the week had just arrived, and every vehicle on it, along with every vehicle in their delivery lot, was accounted for and had a name attached to it for delivery.

Advertisement
-

Tesla saw a 25 percent increase in deliveries in Q2 compared to the same quarter the year before. The vast majority of the 480,126 units it delivered, 467,762 vehicles to be exact, were the Model 3 and Model Y.

In Q3 2025, Tesla delivered 497,099 vehicles, once again a figure that was dominated by the company’s two mass-market vehicles. Analysts have unusually wide predictions for this quarter, likely because so many firms missed the Q2 delivery figure by such a substantial margin; Wall Street predicted 408,000 cars, while Tesla delivered 480,000.

Goldman Sachs has Tesla slotted for 435,000 deliveries in Q3, while JPMorgan said it anticipates 482,000. The median guess is about 449,000 deliveries for Q3.

Advertisement
-

Interested in ordering a Tesla? Use my referral code for three free months of Full Self-Driving (Supervised) here.

Continue Reading

Elon Musk

SpaceX turned a heralding moment for Starship into its greatest

Starship reached orbit despite losing an engine, deployed 26 Starlink V3 satellites on Flight 14.

Published

on

By

SpaceX’s Starship reached orbit for the first time on Monday, and for a few nail-biting minutes it looked like it wouldn’t. During ascent on Flight 14, one of Ship 41’s six Raptor engines shut down early, and SpaceX’s livestream host Dan Huot told viewers the team had decided not to commit to orbit. Minutes later, after what Huot described as a lot of conversation in the control room, the final poll came back in favor, and a roughly 19 second burn of a single Raptor pushed the ship into orbit about 170 miles up.

The reversal matters because SpaceX had written the exit ramp into the mission plan. The company said it would only fire the orbital insertion burn if flight controllers confirmed enough backup hardware remained for the deorbit burn, a condition Teslarati laid out ahead of the flight. Losing an engine was exactly the scenario that rule was built for.

Pressing forward fits Elon Musk’s history. Falcon 1 failed three straight times before its fourth launch reached orbit in 2008, with SpaceX nearly out of money, and Starship was developed by flying prototypes until they broke. What changed this year SpaceX going public, and with $SPCX sliding below its IPO price in July when Flight 13 slipped, the short interest climbed significantly, as Teslarati reported at the time. A Starship potentially lost today with revenue generating next-gen Starlink satellites aboard would have landed directly on shareholders.

That pressure showed up after orbit. SpaceX cut a flight planned to last nearly 10 hours to about three, moving splashdown from west of Chile to the North Pacific near Hawaii. SpaceX gave no reason, though Musk said this month the company was being extremely cautious about debris risk. The single Raptor for deorbit worked, and Ship 41 completed its flip and landing burn before breaking apart in the water, an outcome SpaceX expected. Musk has structured SpaceX’s governance to shield long term bets from market pressure.

Advertisement
-

The payload is the bigger business story. Musk posted that all 26 Starlink V3 satellites deployed and are “operating nominally.” Each V3 is rated for about 1 Tbps of downlink and 160 Gbps of uplink, so this single launch adds roughly 26 Tbps, about 10 times what a Falcon 9 load of V2 Mini satellites adds. The V3 is too large for Falcon 9, making Starship the only vehicle that can build out the planned 100,000 satellite constellation, at up to 60 per flight once it reaches routine service. Unlike the 20 V3 units on Flight 13, which reentered on a suborbital path, these will raise their orbits and could begin serving customers within weeks and bring in hundreds of millions of additional dollars in projected Starlink revenue.

SpaceX has already begun winding down Falcon 9 Starlink launches from Florida in favor of Starship. Reported targets put Flight 15 as early as October 19, leaving about three weeks to diagnose Monday’s engine shutdown before the next orbital attempt.

Continue Reading