General Motors loses $9,000 on each electric Chevrolet Bolt it sells, but it keeps making and selling the cars because of California state laws requiring it to either sell zero-emission vehicles or purchase credits from another company that does so, Bloomberg News reports in a fascinating look at what one expert calls "compliance vehicles."
The more ZEVs a company peddles to the public, the more credits it earns, and those with a surplus can sell them to competitors that are falling behind. As an electric-only manufacturer, Tesla has been able to really tap the program. In the third quarter, it made $139 million selling credits, which helped Tesla hit its second-ever quarterly profit on a GAAP basis.
Nor is GM the only company doing this. Bloomberg reports:
Fiat Chrysler Automobiles NV's battery-powered Fiat 500e is made for California alone, and Chief Executive Officer Sergio Marchionne said in 2014 that it was losing $14,000 per sale. The company's pretty much giving it away, at a monthly lease-rate of as little as $69.
No wonder these companies needed taxpayer rescues to survive: it's partly because they were going broke meeting government-imposed mandates.
