Tesla already confirmed record deliveries last quarter due to improved Model 3 production, but now the delivery numbers for California are coming in and the automaker delivered an insane number of cars in the state – resulting in a massive amount of ZEV credits.
Here’s the delivery breakdown for the quarter:
- 18,440 Model 3’s
- 10,930 Model S vehicles
- 11,370 Model X SUVs.
Based on registration data released by the California New Car Dealers Association (CNCDA), an impressive number of those Model 3 vehicles, 8,951 of them to be exact, have been delivered in Tesla’s home state.
When adding Model S and Model X deliveries, Tesla’s total deliveries grew by 139% during the last quarter:
For the whole year to date, the Model 3 took a 21% market share in what CNCDA calls the ‘near luxury’ segment – beating other vehicles like the Mercedes C-Class and the BMW 3-Series.
That’s despite deliveries being very slow during the first few months of the year.
Tesla now claims Model 3 outsold all other premium sedans combined in US in July due to the recent ramp of production.
The result should be even more impressive in California where Tesla still concentrates a lot of Model 3 deliveries.
It is resulting in Tesla getting an incredible amount of ZEV credits, which could help the company achieve profitability in the coming months.
Based on the latest form of CARB’s ZEV credit system, Tesla should be able to get at least 3 credits per vehicle delivered in the state.
With 14,099 deliveries based on registrations during the last quarter, Tesla should have increased its bank of ZEV credits by 42,297 credits.
It’s difficult to determine the value of the credits since Tesla doesn’t need to use them to compensate for the sales of gas-powered cars, like other automakers, in which case they are worth $5,000.
Instead, the company tries to sell them to those automakers for a lower value in order for them to buy the credits from Tesla instead of paying full price to CARB.
Therefore, the price is highly dependent on the need of other automakers and the availability of the credit on the market.
In its latest earnings results, Tesla disclosed that it sold $50 million worth of credits during the first quarter and no credits during the second quarter.
I think that could make the difference between Tesla turning a profit over or not in Q3 and Q4.
Again, it’s difficult to estimate the value of the credit and Tesla could also still have a bunch of credit left from previous quarters, but I would estimate new credits earned in Q2 to be worth anywhere between $125 million and $170 million.
It could be difficult to unload them all at once, but if Tesla didn’t sell any during the last quarter, it would be much easier.
Tesla is also likely to deliver even more vehicles in California during the current quarter, which should result in even more credits.
What do you think? Let us know in the comment section below.
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