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Key Points
Canada’s new regulations require that zero-emissions vehicles (ZEVs) make up 20%, 60%, and 100% of light-duty vehicle sales by 2026, 2030, and 2035, respectively. Currently, ZEVs account for only 9.7% of new vehicle registrations in Canada, raising concerns about whether this target can be met.
Automakers will face penalties of $20,000 per vehicle for failing to comply with these regulations. This could lead to increased demand for Tesla’s zero-emissions credits, which generated approximately $2.8 billion in revenue for the company in 2024. Tesla has sold five times as many credits as its closest competitors, General Motors and Hyundai, between 2020 and 2024.
The potential surge in emissions credits purchases from Canada may provide a significant revenue boost for Tesla, particularly as it faces a recent 13.5% drop in global vehicle deliveries during Q2. Investors are advised to observe the upcoming November shareholder meeting for further insights into Tesla’s future direction.
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