New Rules in California to Hurt Tesla’s Bottom Line

Tesla will be feeling a financial squeeze this year thanks to new rules from the California government. 

California’s Air Resources Board (CARB) revised its rules, reducing the number of credits Tesla gets per Model S sold to four compared to the seven it got in 2013. Last year, the Palo Alto, Calif.- based electric car manufacturer sold $129.8 million worth of the credits to other automakers. That income played a pivotal role in Tesla being able to report a profitable first quarter in 2013.

CARB is actually raising the maximum number of credits available per emissions-free vehicle to nine, but Tesla won’t qualify. In order to meet that requirement, vehicles must be capable of refuelling in no longer than 15 minutes while still offering a long driving range. Hydrogen-powered vehilces will be able to fulfill those requirements.

Last year, Tesla showcased how the Model S is capable of a rapid battery swap as a solution to slow charge times. Stations would offer owners the option to exchange their battery, but Tesla has yet to open a single example.

GALLERY: 2013 Tesla Model S

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[Source: Bloomberg]