Tesla’s carbon credits revenue came in at $344 million in Q2, down 49% from $679 million in Q1, and a 3% decline from the same period in 2021.
The regulatory credits made up 1.7% of its total gross margin for the quarter, down from 2.9% the previous quarter.
Tesla has made $5.1 billion since 2017 through selling certified carbon credits. The credits are sold to other automakers to help them comply with their emission regulations and avoid huge fines. What’s more, the credits also represent the carmaker’s effort in eliminating its carbon footprint.
Tesla started to measure its Scope 1 and Scope 2 GHG emissions in 2021 considering the principles and guidance of the GHG Protocol . For its Scope 3 emissions, the company measures two largest categories: use of product and supply chain.
Tesla has access to primary data from its over 2 million vehicles on the road and fleet of solar and storage products, allowing it to calculate emissions from products’ usage each year accurately.
For supply chain emissions, the company has identified key emitters from the materials and production processes in the supply chain so that it can prioritize its involvement and projects to handle those emissions.
In 2022, the company intends to continue advancing on the data points and building its battery responsible sourcing program. More emphasis will be placed on developing plan for reducing supply chain GHG emissions and future investments.