Tesla safe from CO2 costs hitting automakers image

Tesla Motors, the California based startup that has already come to disrupt the natural order among automakers could have another benefit in the years to come.

Because the US automaker has a niche status – it only produces electric cars – Tesla could soon benefit from the fact that its traditional competitors will be hit by increased costs. The spending will be triggered (or rather, already has been triggered) by the new fuel and carbon dioxide (CO2) emissions regulations that will be enforced by the European Union, US government and China.

According to London-based International Strategy and Investment (ISI), Tesla will not be impacted by the new requirements, as its emissions are zero at the end user and the ones produced to generate electricity are dependant on the power stations.

“Conventional (manufacturers) face headwinds of about $1,350 per unit. Yet for Tesla costs will come down about 17.3 per cent with technology advances and scale,” said the ISI report.

ISI has issued the report to include the US automaker in its coverage and investors were counseled to buy Tesla’s shares, adding that traditional automakers will need to cope with the big penalties ushered by the investments needed to meet the new regulations, claiming they could add up to almost $1,500 per vehicle.

Via Forbes