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USA: Green-Car Credits: Automakers’ New Way to Cash In

As the market for electric cars heats up—in 2011, about 18,000 electric vehicles were sold in the U.S., up from just under 500 in 2010—a new opportunity is emerging for carmakers: selling “credits” required to meet clean-air rules. This year, California begins stepping up the number of zero-emission vehicles, such as electric and hydrogen-powered cars, automakers must sell in the state. Companies that can’t meet their quotas can buy credits from rivals that exceed their targets. “We are in a fortunate position of having positive credit, so [selling them] is obviously something we are able to look at,” says Andy Palmer, an executive vice president at Nissan, which has earned surplus credits from sales of its Leaf, the top-selling all-electric car in the U.S.

Tesla Motors (TSLA) has revealed in corporate filings that it’s sold $13 million worth of credits to Honda (HMC) and at least one other automaker it hasn’t identified, though the company declines to say how many it sold or the price paid.

The number of credits per vehicle depends on its range and how fast it recharges. A model with a 100-mile range and standard charging, such as a Leaf or electric Ford (F) Focus, would generate three credits, while a long-range, fast-charging Tesla Model S is worth seven. Under California’s air-quality rules, automakers that fail to earn (or buy) enough credits face fines or even a ban on selling cars in the state.
More businessweek.com

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