Biden Caught In Huge Rigging Of EV Carbon Credits At Taxpayer Expense

Authored by Mike Shedlock via MishTalk.com,

Tesla is a huge beneficiary of an improper “no legal basis” Biden-sponsored subsidy. This is a massive scandal reminiscent of the diesel-emissions cheating that rocked Germany.

Carbon Tax Credits

The Biden administration and the Department of Energy colluded to rig estimated gas mileage from EVs.

For example, a Tesla that gets the equivalent of 65 MPG, receives tax credits as if the Tesla gets 430 MPG.

Electric-Vehicle Cheating Scandal

The Wall Street Journal comments on The Electric-Vehicle Cheating Scandal

It’s hard to think of a worse environmental scandal in recent years than Volkswagen’s 2015 diesel-emissions cheating. The German automaker was rightly pursued by regulators, enforcement agencies and class-action lawyers.
The scandal ended up costing Volkswagen an estimated $33 billion in fines and financial settlements—and revealed that diesel-emissions cheating was endemic.
When it comes to electric cars, the government has a cheating scandal of its own. Under an Energy Department rule, carmakers can arbitrarily multiply the efficiency of electric cars by 6.67. This means that although a 2022 Tesla Model Y tests at the equivalent of about 65 miles per gallon in a laboratory (roughly the same as a hybrid), it is counted as having an absurdly high compliance value of 430 mpg. That number has no basis in reality or law.
Until recently, this subsidy was a Washington secret. Carmakers and regulators liked it that way. Regulators could announce what sounded like stringent targets, and carmakers would nod along, knowing they could comply by making electric cars with arbitrarily boosted compliance values. Consumers would unknowingly foot the bill.
The secret is out. After environmental groups pointed out the illegality of this charade, the Energy Department proposed eliminating the 6.67 multiplier for electric cars, recognizing that the number “lacks legal support” and has “no basis.” [Let’s not mince words, how about … illegal subsidy]
Carmakers have panicked and asked the Biden administration to delay any return to legal or engineering reality. That is understandable. Without the multiplier, the Transportation Department’s proposed rules are completely unattainable. But workable rules don’t require government-created cheat codes. Carmakers should confront that problem head on.

Illegal Credits

The Journal noted this scandal is buried deep in the Federal Register—on page 36,987 of volume 65.

Since the tax credits “lack legal support” and have “no basis”, all the beneficiaries should have to return their illegal gains.

How much is that?

Tesla’s Record Carbon Credit Sales Up 94% Year-Over-Year

On October 23, 2023, Carbon Credits reported Tesla’s Record Carbon Credit Sales Up 94% Year-Over-Year

While Tesla has missed this year’s third quarter on both earnings and revenue expectations since its Q2 2019 report, the EV leader reported record-breaking carbon credit sales, which the company referred to as regulatory credits.
For over 4 years, the EV maker has been drawing attention by reporting record-breaking income from selling carbon credits. The automaker reported a revenue of $554 million from the Q3 2023 sale of carbon credits, significantly contributing to its profits.
This record sales also represented a huge portion of Tesla’s net income in Q3 2023 ($1,878 million) – 29%. Most notably, its quarter three carbon credit revenue increased 94% year-over-year, marking the value of Tesla’s EV production.
Despite Elon Musk’s “paranoia” over the global economy’s instability due to ongoing wars, its soaring carbon credit income steadily contributes to its overall profits.
A 29% revenue-to-net income ratio is hard to ignore and speaks highly of the value of the credits for Tesla.
It’s not clear who exactly bought the credits and for how much, but most likely they’re sold to other car companies that miss out on emissions standards of the California Air Resources Board (CARB).

Will Tesla Have to Return Is Unwarranted Gains?

Ha! You know the answer.

However, the carbon credits it does receive are set to drop roughly 85 percent.

Now, about those Tesla profits... Anyone care to crunch some numbers assuming Biden is forced to hand out credits based on reality, not fiction?

Diesel Scandal

Regulators in bed with the auto industry. Gee who coulda thunk? And It happened here too, only worse.

Biden Weighs Banning Natural Gas Exports to Save the Climate

In case you missed it, please see Biden Weighs Banning Natural Gas Exports to Save the Climate

If Biden does follow through with this nonsensical (and probably unconstitutional action), Russia will be the biggest beneficiary.