Tesla Senior Associate For Regulatory Credits Leaves After Realizing $890M In Revenue For EV Giant In Q2

Tesla Inc.’s TSLA senior associate for regulatory credits Ashlee Ramanathan took to Linkedin earlier this week to announce her departure from the company, days after the company reported revenue of $890 million from the sale of regulatory credits alone in the second quarter.

What Happened: Ramanathan said in a post on LinkedIn that she made the “difficult decision” to leave a few weeks ago.

“Tesla has been more than a job: an all-consuming Mission demanding my time and efforts constantly as we closed deals to sell emissions credits to obligated parties (both automotive and oil & gas companies) across the world,” she wrote.

Talking about her plans, Ramanathan said that she would take a break for a few weeks before embarking on another job.

What Are Regulatory Credits: Regulatory credits are incentives awarded to automakers by governments for selling electric vehicles. Each company is supposed to have a minimum number of regulatory credits each year, failing which they have to buy from other companies that have excess credits.

Given that Tesla only sells EVs, they have excess credit which they sell to other companies for profit.

Why It Matters: The sale of regulatory credits to players falling short of their emission requirements was a major revenue source for Tesla in the second quarter as revenue from car sales dipped 9.3% year on year to $18.53 billion. Revenue from automotive regulatory credit sales in the meantime jumped 216% from just $282 million in the second quarter of 2023.

“We recognized record regulatory credit revenues in Q2 as other OEMs are still behind on meeting emissions requirements,” Tesla announced during its second-quarter earnings last week.

According to Tesla’s 10Q filing, the company has unsatisfied or partially unsatisfied contracts for the sale of regulatory credits worth $4.9 billion as of June 30. Of this whopping amount, $459 million is expected to be recognized in the next 12 months and the remaining over a period of time.

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