Electric vehicle start-up Fisker plans to generate revenue from the sale of carbon credits in addition to the sale of its electric SUV, the Fisker Ocean. By delivering more vehicles to customers, Fisker will generate more carbon credits. Each tenth of a mile that emissions targets are exceeded by garners a penalty, and automakers have two options: pay a fine, or compensate for non-compliance with credits. Credits generated by a company like Fisker can help non-compliant automakers avoid $5,000 fines for violation of standards. Fisker will sell its car in all 50 US states and the District of Columbia, and its car will qualify for maximum allowable credits of 4 ZEV credits per vehicle in states that follow the California Air Resources Board’s environmental standards. According to Fisker, one large automaker has already agreed to buy its credits at competitive rates.
Environmentalists have criticized carbon credit programs as a way for polluting vehicles to be greenwashed, and credits may not have financial value unless states have their own emissions regulations. However, Fisker’s credits could serve as an additional revenue stream for the electric vehicle start-up. The more electric vehicle makers succeed, the lower the price of carbon credits will be due to competition. Carbon credits will likely be phased out when zero-emission vehicles become mainstream.
Whether electric vehicles are an environmentally responsible choice depends on whether makers ensure battery packs are replaceable and repairable, and if hydrogen is produced from carbon-neutral sources for fuel cell electric vehicles.