Tesla and the Myth of the Zero-Emissions Vehicle


Auto enthusiasts were thrilled last week as green automaker Tesla made it into the black, earning $11 million profit on revenue of $562 million in the first quarter of 2013. “I’d be lying if I said it wasn’t somewhat surprising to see they’ve been able to turn a profit so quickly” said Alec Gutierrez, an industry analyst for Kelley Blue Book.

A closer inspection of the numbers, however, reveals that the Palo Alto–based carmaker made its profit by selling $68 million in carbon credits to other automakers. Under a mandate that 15 percent of sales be zero-emission vehicles by 2025, California requires that automakers make a certain number of electric vehicles (EVs) or be penalized. And since Tesla makes only the athletic, $70,000 electric Model S, it has credits by the trunkload — while full-line automakers like GM pay a penalty.

“At the end of the day, other carmakers are subsidizing Tesla,” says Thilo Koslowski, an analyst at Gartner Inc. Combine the Golden State’s generous zero-emission credits with federal tax credits ($7,500) and a state rebate ($2,500) on purchase of each Model S, and the government subsidy amounts to $45,000 per car.

But the greater con is the fiction that electric cars are zero-emission vehicles.

According to a comprehensive engineering study published in the February 2013 Journal of Industrial Ecology, greenhouse gas emissions for an EV’s full life cycle — from production through road use — are not much greener than a comparable gas-powered auto, and no more planet-friendly than a diesel car. Indeed, when you factor in the toxicity of materials used in battery production, it’s hard to make the case that EVs are a very green alternative.

“Almost half of an EV’s life cycle global-warming potential is associated with its production,” concluded a study group from the Department of Energy and Process Engineering at the Norwegian University of Science and Technology. “We estimate the GWP from EV production (to be) roughly twice (that) with gas-engine production.”

Read more at the Detroit News here.


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