Starting this year, Tesla will be able to sell greenhouse gas emissions credits for its vehicles in Korea. This opens up new sources of income for the company, strengthening its financial position.
According to industry sources, the Korean Ministry of Environment has allowed Tesla to trade its greenhouse gas emissions credits in Korea starting this year, Business Korea reported. To date, Tesla has received an estimated 4 million g/km of credits from the ministry, based on its sales in Korea in 2021 and 2022. By providing its competitors with a carbon offset mechanism, the Texas company plays a significant role in the carbon credit market and receives the opportunity to make money from the fact that others do not comply with standards.
Like many countries around the world, companies that sell cars in Korea are required to ensure that the average greenhouse gas emissions from the cars they sell in a year are less than the standard set for that year. If they exceed the standard, they must pay a fine of 50,000 won per g/km or purchase credits to pay off the excess. So far, Tesla has secured up to 200 billion won of tradable greenhouse gas credits in Korea.
Until this point, Tesla could not trade emission credits in Korea. The country has criteria for who can trade greenhouse gas emissions quotas. When the law was passed in 2011, only automakers that sold more than 4,500 vehicles a year as of 2009 were allowed to trade carbon credits. At that time, Tesla did not meet this criterion and therefore was not on the list of eligible companies.
Selling carbon credits is a solid source of revenue for Tesla. The opportunity to sell them on the Korean market will further strengthen the position of the manufacturer. In 2023 alone, Tesla earned $1.79 billion from selling carbon credits. Tesla’s total revenue from this source since 2009 has been nearly $9 billion.
