A Bloomberg report has revealed what it dubs the "secret source" of Tesla's cash.
Tesla has been pulling in much-needed extra cash from the same competitors that it criticizes for relying on internal combustion engines. To achieve this, the company has been offloading federal greenhouse gas credits to GM and Fiat, according to disclosures made to the state of Delaware earlier this year.
The sales of hybrid Chevrolet Volts and all-electric Chevy Bolts have put GM in a position where they don't need the credits today, but they are buying them as a hedge against potential stricter future regulations, which could be a reality, especially if President Trump is dethroned by a socialist democrat in 2020.
Mike Taylor, the founder and president of Emission Advisors, a Houston-based environmental credit consultant and broker said: “This might not be a bad hedge. If a Democrat gets elected in 2020, GM may need the credits and prices may go up.”
GM's agreement to buy the credits was dated February 25. A company spokesperson said that GM was buying the credits "as insurance against future regulatory uncertainties."