The Globe and Mail reports in its Wednesday edition that a key driver of Tesla's profit is quickly disappearing as the U.S. government changes policies on an environmental asset known as regulatory credits. A Reuters dispatch to The Globe says investors are likely to have questions for Elon Musk when Tesla reports second-quarter results today. Among them are how fast the electric-vehicle maker can turn a trial robotaxi program into a money-making business, how to avoid a decline in sales for the second year in a row and Mr. Musk's possible political plans. Less sexy is the issue of regulatory credits, which are bought by traditional automakers from EV companies to make up for the tailpipe pollution from their gasoline-powered vehicles. But this income segment is crucial for Tesla's finances, having been the main driver of its profit in the first three months of the year. Without the income from those credits, sold to internal combustion engine carmakers, Tesla would have reported a first-quarter loss, and Mr. Musk may be pressed to say how long he thinks Tesla will be able to sell credits. Tesla's revenue from credit sales will fall 21 per cent this year to $2.17-billion (U.S.) and fall consistently in the coming years.
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