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This is Tesla's 'trick' to lower its prices and keep making money

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Tesla has signed its fifth consecutive quarter away from the red. But it has a trap. Those of Elon Musk they are not making more money by selling more electric cars. In fact, your eccentric CEO is still hell-bent on lowering your prices. The ruse that allows the company to boast of profitability has a name: green credits.

States like California require a minimum of green or environmental credits from their auto manufacturers. Tesla, by its 100% electric nature, has plenty. That is why it sells them to other companies, which thus pose as green in the eyes of the law, and Musk's take a pinch that ends up being the difference between being profitable or not.

Tesla has sold $ 1.18 billion in green credits during the first nine months of the year, more than double the number in all of 2019. In the last quarter of 2020 alone, the manufacturer has earned $ 397 million from the sale of these required badges. by federal law to sell the world the idea that climate change is being fought.

Musk and his people will keep dancing as long as the music keeps playing. "We have sold those credits and we will continue to do so in the future, so that other automakers can come to meet regulatory standards," Tesla said in a recent statement. How long can you continue doing business with them?

MUSK TURNS IN TO LOWER PRICES

Some analysts believe that the Tesla beach bar may have its hours numbered. It is only a matter of time before the most traditional manufacturers raise their bet on the electric car which, added to the irruption of some startups, may end up undermining the demand for these green credits with which Musk makes the August each quarter.

The opinion of these experts is that if Tesla wants to remain profitable and justify its current valuation on Wall Street, it must stop hiding behind these green credits … and continuing to lower the price of their cars does not help fuel a solid profit alternative. "If a car is very expensive, people will not have the money to buy it regardless of its performance," continues to defend Musk. Will it end up reversing?

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