Tesla Leads Sellers Of ZEV Credits In Past Year, GM Leads As A Buyer

3 years ago by Jay Cole 35

A 85 kWh Tesla Model S With Battery Swap Technology Is Worth 7 ZEV Credits

A 85 kWh Tesla Model S With Battery Swap Technology Is Worth 7 ZEV Credits

Reporting on California zero-emission vehicle credits used to be one of the most widely ignored articles at InsideEVs; but now that Tesla’s quarterly profit or loss basically hinges on that transaction…one of those post popular.

Toyota Has Been Moving AT-PZEV Credits Generated By The Plug-In Prius

Toyota Has Been Moving AT-PZEV Credits Generated By The Plug-In Prius

CARB has recently updated their list of “sellers” and “buyers” of green credits for the past year (1st Oct 2012 – 30th Sept 30 2013), and while seeing Tesla leading the way selling credits is no surprise, seeing General Motors as the top acquirer of credits is a little surprising.

As for Tesla’s dependency on ZEV and other green credit sales for profitability, while it works at improving Model S margins, there can be no arguing that fact:

  • Q1  $15 million profit (adjusted) which included $68 million ZEV credit sales (+17.1 million in other credits)
  • Q2 $26 million profit (adjusted) which included $51 million  ZEV credit sales (+18.0 million in other credits)

Overall Tesla shipped out 1,311.52 ZEV credits (g/mi  NMOG adjusted)over the last year, while Toyota moved the most AT PZEV credits (generated from the plug-in Priuis) at 507.5.  According to the government agency, going into Q4, Tesla still has 276 ZEV credits available to sell.

Interestingly, GM acquired exactly the same amount of AT PZEV credits (507.5) over the year as Toyota sold – perhaps some horse trading of some kind?  Also of note, Nissan who was reported to now be in the business of selling ZEV credits, did not make any of those sales official to CARB, as the updated report said only 25 credits of any kind were transferred from the Japanese automaker.

Below you can find all the current data on who is selling, buying and accumulating green credits in California.

ZEV "Sellers"

ZEV Credit “Sellers” (data via ARB)

ZEV Credit "Buyers" (data via ARB)

ZEV Credit “Buyers” (data via ARB)

Disclaimer (or nerd note if you will) on what an archived/cumulative “credit” as reported by CARB is:

When credits are earned they are multiplied by the g/mile NMOG fleet average requirement for  the appropriate model year.  Please note that in the ZEV Regulation g/mi  NMOG is used only as index (which decreases over time)—it is the “currency”  that credits are stored in and does not represent actual values of g/mi  NMOG.  The intent of this multiplier was to reward early production of  vehicles.

Hat tip to Chris Woodward  (ARB via Bloomberg)

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35 responses to "Tesla Leads Sellers Of ZEV Credits In Past Year, GM Leads As A Buyer"

  1. Dan Frederiksen says:

    The interesting value is the difference between what TSLA had sold after Q2 and Q3.
    If they have sold about the same as prior quarters or if it fell away entirely. Because so far they have indeed depended on ZEV credits to appear profitable.
    Given the sky high stock price they will need to continue that illusion if not to drop a lot.
    And they may have sold a record amount of cars in Q3 which if profitable can give the frenzied stock market the excuse it desires to raise the price even further into the 200s.

  2. Spec9 says:

    Oh, that has got to sting for GM.

    It is no fun to have to pay your competitors. Well, GM, get your alleged 200 mile EV out there.

    1. Taser54 says:

      GM is done buying. That 507 credit purchase in 2012 amounts to 250 Spark EVs at 2.5 ZEV credits each. Done and Done in 3 months.

      1. io says:

        Far from it. Credits in the above tables are given in “g/mi NMOG”; a Spark EV brings GM only 0.0875 of those, IF my understanding is correct.
        See the FAQ near the bottom of http://www.arb.ca.gov/msprog/zevprog/zevcredits/2012zevcredits.htm

      2. Yes, GM has a long way to go. I’m confident that the Spark EV will meet 100 miles of range on the UDDS testing, making it a 3 credit car.

        GM sells half as many cars in California as Toyota (150,000 oil cars versus 300,000 oil cars per year), so for 2013 and 2014 model years, to meet the 0.79% CARB-ZEV credit threshold, they need 150,000 oil cars for each year = 300,000 oil cars total for both years * 0.79% ZEV credit = 2370 / 3 credits per 100 mile range car = 790 cars MINIMUM sold in California for those two years. Obviously, GM had to pay for 2012… really bad planning.

        Toyota needs to build for years 2012-2014, 900,000 oil cars * 0.79% ZEV credits = 7110 / 3 credit for each Rav4 EV = 2370 cars. They will build 2600. Note that Toyota will also receive a small ZEV credit for the Scion iQ EV demonstration fleet.

        The credit balances that are bought and sold are held as a “gram/miles NMOG” balance, which mutliplies the raw credit data by a gram/miles NMOG value that changes over time. Since 2010, that value is 0.035 for cars and 0.043 for Light Duty Trucks over 3750 pounds. The Rav4 EV weighs 4000 pounds.

        So, GM will sell 790 ZEVs in California * 3 credits each = 2370 * 0.035 = 82.95 g/mi NMOG credits.

        Toyota will sell 2600 ZEVs in California * 3 credits each = 7800 * 0.043 = 335 g/mi NMOG credits, plus they currently have about an 870 balance! When Toyota starts selling the hydrogen car, it will earn 7 credits per vehicle for model years 2015-2017.

  3. Brian says:

    Jay – could you point me to, or put together, a “CARB Credits for Dummies” article? This topic comes up from time to time, but I really don’t understand the intricacies of how the whole process works. I’m guessing I’m not alone.

    1. Jay Cole says:

      Not that long ago, we/I actually mapped it all out (give or take, lol) in comments of another article…it can get quiet involved (and it makes babies cry), but I’ll see if I can dig it out the archives for you and link or C&P it here for you, (=

      1. Brian says:

        It doesn’t take much to make babies cry…

        One complaint I would have about this site (if I had to complain) is that it can be difficult or impossible to find information from the comment sections.

        1. Jay Cole says:

          Oh no, you have opened up a “One complaint I would have about this site…” discussion, that can’t end well.

          Here is the thread (well one of them anyway) that basically explains the program/history and requirements in the comments…although not the one I was thinking of. You can also get real technical with it in a bazillion page (or 131) report here.

          If I am feeling particularly upbeat one day, and not at all suicidal, I might put up a primer/reference article on the site.

          1. Brian says:

            Oops, My bad! I’m sure we can put that back in the box, right Pandora?

      1. scott moore says:

        Nice. You have to love that emissions map, it shows the central valley as one of the “problem” areas.

        Not a lot of commuting around bakersfield. The major contributor to bad air quality there is cow flatulence. When does the electric cow come out?

        1. Spec9 says:

          The key word is central VALLEY. Just the basically geography of the area makes it more susceptible to pollution . . . a valley that gets frequent temperature inversions.

        2. David Stone says:

          does not need to.
          Just stop breeding them; the land they vacate would provide much more and better food than they do.

          1. scott moore says:

            Ok, I have put up with the socialists here, but lets draw the line at vegetarians. Sheezzzz…

            1. David Stone says:

              It has nothing to do with vegetarians, but with environmentalism, anti-animal cruelty and maximising food production.

  4. GeorgeS says:

    Why aren’t Volt ZEV credits shown?
    Is it because after they generated ZEV credits w/ Volt sales they were still short??
    what is the conversion rate between AT ZEV and ZEV?
    What is the dollar value of one ZEV credit?

    1. Spec9 says:

      I dunno but the Volt is not a ZEV.

      1. GeorgeS says:

        yes but if you look at Taser’s link you can apply AT ZEV credits towards your total ZEV credit requirement.

        1. io says:

          Hmm, no, only to a point, that’s why GM needs *some* ZEV credits one way or another.
          Look at pages 39, 41, 48 and 70 of the presentation.

          1. ModernMarvelFan says:

            Exactly.

            It needs at least 0.79% of the fleet to be ZEV. AT-PZEV (Volt) can fill up to 79% of the total requirement. But it still has to sell enough Spark EV to meet that requirement…

            1. Jesse Gurr says:

              No, the 0.79% is not the right number. That is the number of ZEV credits available for that example scenario and is not the conversion number. On page 70 of the presentation, AT PZEVs can fulfill up to 75% of the total ZEV requirement for 2012-2014.
              Or Enhanced AT-PZEV can fulfill up to 93.4% of total ZEV requirement. Though i’m not sure what the difference is between advanced and regular AT-PZEV.

    2. The pure ZEV (not a Volt) needs to be 0.79% of the credits). For GM, at 150,000 oil car sales in California, that is 1185 credits worth. The Spark is 3 credits per car, therefore the MINIMUM number of ZEV cars per year for GM through 2014 model year is 395.

      The ZEV credit minimum % increases in 2015, and continuous increasing every few years.

      1. rick ballard says:

        Tony–I have followed the articles and comments you’ve written regarding ZEV sales and the credits, you are clearer than any other writer. Please confirm if my understanding is correct: an OEM sells 150,000 vehicles in CA in MY 2014. He is required to then have (150,000/100*4.5)=6,750 credits that are taken out of circulation during that reporting period. But of these, he must have at least 0.79% of them earned from the sale of an actual ZEV. So for this scenario, he needs to have (6,750*0.0079)= 53.325 from the sale of ZEVs. Is this correct? If not, please correct my math for this specific example. Thank you. (I am thinking that my misunderstanding may be that the 0.79% of the credits may be per vehicle as opposed to being per 100 vehicles. I understand that there must be 4.5 credits per 100 vehicle sales, and of these, 0.79% must be earned from actual ZEV sales. Thank you.

  5. scott moore says:

    The GM thing now makes every sense. The volt was not covering the ZEV requirement, and GM didn’t want to pay others. So out comes the SparkPliance car, sold with all the enthusiasm of a dead carp. Why would GM want that to be popular? It competes with the volt.

    1. Rich says:

      Thanks Scott,
      That made me LOL.

    2. taser54 says:

      Well, it looks to me like GM made a decision to release the Spark early, to reap some of the ZEV credits for last year (if I’m reading things correctly). GM looks to have banked 300+ ZEV credits from the Spark EV. I proffer that originally the Spark EV would have been released in December, when the SAE charge was ready.

    3. scottf200 says:

      chevy-spark-ev-to-be-sold-in-europe-too-will-debut-at-geneva-motor-show
      http://insideevs.com/chevy-spark-ev-to-be-sold-in-europe-too-will-debut-at-geneva-motor-show/
      The car will be sold in select European markets as of 2014. Is CA part of Europe?

    4. ModernMarvelFan says:

      Volt can cover some of the ZEV requirement. But at least 0.79% of the GM fleet in CA has to be ZEV. AT-PZEV (VOLT) can fill a large % of it, but NOT 100%.

      Also, Spark EV will count toward to the total Federal Incentives of $7,500 against the GM 200,000 allocation. So,if GM makes money on the Volt (gross, NOT net) and lose money (gross) on the SparkEV, it is additional incentive NOT to sell more SparkEV than it has to b/c it will limit future Fed credit toward Volt sales (which GM believes as its future to electrification).

  6. IDK says:

    Not sure how much longer Tesla will “hinge” on the credits. Maybe we’ll get a feel for it come November 4th?

    1. pjwood says:

      Let’s hope so. The ARB data release would have been an early sell signal, at least temporarily, if Nissan showed up as unloading a few hundred ZEV credits. It isn’t inside info, but it doesn’t take genius to figure out the impact a “red” quarter might have. Another seller would have the effect of both reducing the number, and price of the credits TSLA moved. I almost wonder if Nissan is consciously doing them a favor?

  7. Big Solar says:

    I know I’m gonna feel dumb for asking but what happens on November 4th?

  8. James says:

    It sure would be interesting to know Nissan’s numbers…

  9. Bonaire says:

    I am kinda dumb. So help me out.

    Why does a car with a larger battery get more ZEV credits than another with smaller? 7 credits for an 85 and 5 credits for the 60. Drivers don’t exhaust the miles each day so most drivers of a model S of either size would drive roughly the same miles per year.

    The program almost seems like it was written with at least one lawyer from Tesla on the staff pushing for a kWh size variance. How about 1 ZEV per ZEV car?

    Was it some side effect of the committee considering larger sizes more appropriate for a delivery truck? What came first, the ZEV scale or the battery capacity of Model S’s?