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Fisker Also Wants To Make Money From Carbon Credits

On June 2, the National Highway Traffic Safety Administration disclosed that Stellantis had to pay $235.6 million in fines for not meeting fuel economy standards. General Motors was also punished with $128.2 million in penalties, for a total of $363.8 million. That is why Tesla makes so much money selling carbon credits. Fisker knows that it can be a nice revenue stream apart from selling its battery electric vehicles (BEVs) and disclosed its plan to get there.
Fisker Ocean deliveries will also allow the BEV startup to sell carbon credits 11 photos
Photo: Fisker
Fisker Ocean deliveries will also allow the BEV startup to sell carbon creditsFisker Ocean deliveries will also allow the BEV startup to sell carbon creditsFisker Ocean deliveries will also allow the BEV startup to sell carbon creditsHenrik Fisker delivers the first Ocean to a customer, which happened in Copenhagen, DenmarkHenrik Fisker delivers the first Ocean to a customer, which happened in Copenhagen, DenmarkFirst Fisker Ocean customers gets to drive his electric SUV for the first timeFisker OceanHenrik Fisker delivers the first Ocean to a customer, which happened in Copenhagen, DenmarkHenrik Fisker delivers the first Ocean to a customer, which happened in Copenhagen, DenmarkFisker Ocean at Copenhagen's Fisker Center+
Predictably, the process will kick off when the company starts deliveries of the Ocean in the US, which will happen sometime in the week of June 19. The more vehicles Fisker hands customers, the more carbon credits it generates. The startup made sure to disclose that it is working to squeeze the most out of each car it manages to sell.

Fisker recently achieved an official EPA range of 360 miles for its electric SUV. That was crucial for the California Air Resources Board (CARB) to grant the maximum allowable credits per vehicle in California and the states that follow its environmental standards: 4 ZEV credits per car.

Fisker Ocean at Copenhagen's Fisker Center\+
Photo: Fisker
That means Ocean units sold in Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York,
Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington will offer the same credits. Fisker will sell its car in all 50 states and the District of Columbia. Those credits will help non-compliant automakers avoid a $5,000 fine for each violation they commit. But there is more.

Fisker gave us an insightful overview of how carbon credits work in the US. The National Highway Transportation Safety Administration (NHTSA) also sets miles-per-gallon goals through the Corporate Average Fuel Economy (CAFE). From 2024 until 2026, it established that light trucks and passenger vehicles should achieve 49 MPG.

Henrik Fisker delivers the first Ocean to a customer, which happened in Copenhagen, Denmark
Photo: Fisker
The system gives credits for each tenth of a mile that is a target improvement and penalizes each tenth of a mile that makes the vehicle worse, which is probably a way to make these credits easier to understand. Automakers have two options. The first is to pay $15 for every tenth of a mile of noncompliance times all the units of a model that fails be present the necessary MPG figures. The second is to compensate for not meeting CAFE's targets with credits. Predictably, the cheapest alternative is the one that wins. The first Fisker Ocean derivatives that will be delivered – the Ocean One launch edition and Ocean Extreme – will generate close to 395 credits per unit under these rules.

Finally, the Environmental Protection Agency (EPA) also has emission-cut credit programs. One of them is for non-greenhouse gases (GHG) – in other words, poisonous emissions. The BEV startup did not elaborate on how many credits this program will generate for its cars.

Fisker Ocean deliveries will also allow the BEV startup to sell carbon credits
Photo: Fisker
The second one relates to GHG emissions. Under its rules, the Ocean versions being delivered now can get 159 credits per unit. The irony is that there is no penalty for vehicles that fail to comply with the regulation. Without that, these credits have no financial value. That is why Fisker mentioned California has the Low Carbon Fuel Standard (LCFS). It is based on EPA's GHG program, and its credits can also give the company some more money.

Environmental activists sometimes criticize carbon credit programs because they would be a way of greenwashing polluting vehicles. Those who defend the strategy claim it helps green companies establish themselves in a competitive landscape. Both claims are true, but the idea is reaching its expiry date – which may be a positive thing.

Fisker Ocean deliveries will also allow the BEV startup to sell carbon credits
Photo: Fisker
The more BEV makers that succeed, the lower the price of carbon credits will be due to the competition. Fisker quickly stated that "a major carmaker" already agreed to buy its credits "at competitive rates." On top of that, companies that make polluting vehicles can also produce zero-emission cars and generate their own credits. As that shift gains speed, it will remove this revenue source from several BEV startups. At the same time, BEVs made by more traditional automakers may also become a massive threat to those still trying to figure out how to survive. The positive aspect of all this for zero-emission vehicle advocates is that carbon credits will cease to make sense when they become mainstream. Summing up, the idea will eventually fade out because it will have accomplished its goals.

Will these clean vehicles be an environmentally responsible choice? If we are talking about BEVs, that depends on whether carmakers will make their battery packs feasibly replaceable and repairable: the vehicle's lifespan should not be determined by a single component. If fuel cell electric vehicles (FCEVs) ever stand a chance, that depends on hydrogen being produced from carbon-neutral sources. Fisker has never spoken about that, but it seems to be following the same path created by Tesla and followed by all other BEV makers so far. Without this discussion, we may have just swapped one environmental problem for another one.
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About the author: Gustavo Henrique Ruffo
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Motoring writer since 1998, Gustavo wants to write relevant stories about cars and their shift to a sustainable future.
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