A big chunk of Tesla Motors' revenue is about to become a victim of the law of supply and demand. In 2009, Tesla earned at least $13.8 million selling zero emissions vehicle credits, mainly to Honda, and it has commitments to sell more this year. However, the ultimate demand for these credits is limited by the number of zero emission vehicles mandated by California. If actual sales of plug-in (or hydrogen) vehicles exceed the mandate, the number of available credits will vastly outstrip the demand.
As a result, the market value of those credits will likely plummet from the current $5,000 per vehicle that Tesla is getting to almost nothing by 2012, at the latest, and possibly as soon as 2011. For example, Nissan is planning to have U.S. production capacity for 150,000 units of the the Leaf by 2013. General Motors and Ford will also be earning credits for the Volt, Transit Connect Electric and Focus Electric.