The Senate committee’s proposal would eliminate certain CAFE penalties, rendering the need to have credits useless, Chris Harto, senior policy analyst at Consumer Reports, told Fortune in an email.
“It also would essentially turn the CAFE standards into nothing more than a reporting requirement with no consequences for automakers who fail to improve the efficiency of the vehicles they sell,” he said.
The committee argued the provision would “modestly” bring down the cost of cars by eliminating CAFE penalties.
“A key element of Tesla’s profitability has been its ability to generate credits because it makes zero emissions, and sell those credits to more polluting car companies like GM and Ford and Stellantis—primarily gas-guzzlers that don’t really want to make clean cars,” Dan Becker, director of the Safe Climate Transport Campaign at the Center for Biological Diversity, told Fortune.
“By taking away these credits, they’re taking away a key element of Tesla’s profitability,” he added.
Tesla did not respond to Fortune’s request for comment.
