HOT TOPICS FOR EV MANUFACTURERS: “TESLA,” “CARBON CREDITS” & “CHINA”

The hottest topics in the EV world are, or are soon going to be, “Tesla,” “Carbon Credits” and “China.” According to recent statistics from the Environmental Protection Agency, 28% of US Greenhouse gas emissions now come from the transportation sector. This figure is expected to get worse. The carbon credit system was devised to control emissions and as an incentive for both producers and consumers to significantly invest in low greenhouse gas products, technologies and processes. Though there are criticisms as to their effectiveness, there is no question that EV’s are emissions free and Tesla was the first PEV company to cash in on this.

The World's Best Selling EV: the 2013 Nissan Leaf® - Photo courtesy Nissan
The World’s Best Selling EV: the 2013 Nissan Leaf® – Photo courtesy Nissan

Up until a few month ago, Tesla was the only EV cashing in on the carbon credit market.   It started in 2009. According to a recent article in the Motley Fool, gas guzzling producers like GM and Ford paid Tesla “$2.8 million in 2010, $2.7 million in 2011 and $40.5 million in 2012” for its carbon credits. The world’s most prolific EV manufacturer, Nissan, decided to follow suit last August.

“We’ve got carbon credits to sell, and we’re selling them — California ZEV credits,” Nissan’s Executive Vice President Andy Palmer told reporters in Irvine, California.

An article on Chevrolet’s website says, “Over the next few years, we’ll be investing up to 40 million dollars in projects that will help reduce up to 8 million metric tons of carbon dioxide from the atmosphere. That’s like planting a forest the size of Yellowstone.“

How long do you think it will take before Chevy cashing in on the Spark’s carbon credits?

With all that “free money” just waiting to be scooped up, expect other EV manufacturers to start selling carbon credits as well.

According to Barclay’s Capital, “Carbon will be the world’s biggest commodity market and could become the world’s biggest market overall.”

That is speculation, but it is worth noting that China’s first carbon credit sale took place on June 18 and they are intending to set up a national exchange.   Seven pilot exchanges are being set up.

“China has committed to developing many different carbon markets over the next three years, and hopefully a national market sometime between 2016 and 2020,” said David Tang of Tianjin Climate Exchange.

It has only been a matter of days since Renault-Nissan’s CEO Carlos Ghosn told attendees at the 2013 Frankfurt Auto Show that ”the explosion of the electric car” would come once China made a strong move in their direction.

Chang'an Avenue in Beijing - Australian cowboy (talk), courtesy Wikipedia.
Chang’an Avenue in Beijing – Australian cowboy (talk), courtesy Wikipedia.

His comment reflects the fact that China has now surpassed the United States as the World’s biggest automobile market and  plans to have 500,000 EV’s travelling on its roads by 2015.

This has prompted a number of American automobile manufacturers to move in. Ford sold 400,000 (gas) vehicles there in the first half of this year. GM has at least eleven joint venture projects in China. GM’s CEO Dan Akerson told reporters, in Shanghai last February, “We have more than 2,700 dealerships and sales outlets …” While the vast majority of this imports are conventional vehicles, some are EVs.

Tesla is taking Chinese orders. What does this mighty mouse of the EV world have in mind for the future? Opening a Tesla factory in Beijing? Maybe cashing in on a new carbon credit market? Hmmmmmm.

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