<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5cc21dacb14bf46a53672794-1210/screen shot 2019-04-25 at 44817 pm.png" border="0" alt="Tesla on Fire" data-mce-source="North American Heavy Rescue Symposium, YouTube" data-mce-caption="Professionals burn a Tesla to demonstrate how to put out a high voltage battery vehicle fire." data-link="https://www.youtube.com/watch?v=8n5Wf7TlGrU" /><p class="source"><span><a href="https://www.youtube.com/watch?v=8n5Wf7TlGrU">North American Heavy Rescue Symposium, YouTube</a></span></p><p class="caption">Professionals burn a Tesla to demonstrate how to put out a high voltage battery vehicle fire.</p></div><p></p></div></div></p><ul class="summary-list"><li>Several <a href="https://www.businessinsider.com/category/tesla">Tesla</a> vehicles have <a href="https://www.businessinsider.com/tesla-updates-battery-software-after-a-shanghai-hong-kong-fires-2019-5">caught fire recently</a>, spurring concerns that the cars and their batteries are hazardous.</li><li>The statistics about electric-vehicle fires aren't worrying, but <a href="https://markets.businessinsider.com/news/stocks/tesla-stock-price-analyst-cuts-target-as-demand-concerns-pile-up-2019-5-1028204868">Tesla</a> attracts a lot of attention, so every reported fire has been scrutinized.</li><li>In fact, more than 170,000 vehicles, including both electric and internal combustion cars, caught fire between 2014-2016. And those fires were just in the US, <a href="https://www.usfa.fema.gov/downloads/pdf/statistics/v19i2.pdf">according to 2018 data from the Federal Emergency Management Agency (FEMA)</a>. (Fewer than 1% involved fatalities.)</li><li>Some 60% of the fatal vehicle fires FEMA tracked were due to a collision; the remainder were caused by other factors.</li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories</a>.</li></ul><p><br />A minor panic has set in about Teslas catching fire, with several recent incidents in the US, China, and Hong Kong.</p><p>Some of the fires are under investigation because the vehicles appear to have combusted for no obvious reason. There is always a small risk of overheating with the types of batteries that Tesla and other vehicles use, but the unexplained fires are worrisome.</p><p>However, it's always worth noting that electric vehicles are considered statistically no more likely to burst into flames than gas-powered cars. And they might be statistically safer; it's difficult to tell now, as their sample sizes are dwarfed by internal-combustion (ICE) cars.</p><p>The <a href="https://www.nhtsa.gov/sites/nhtsa.dot.gov/files/documents/12848-lithiumionsafetyhybrids_101217-v3-tag.pdf">National Highway Traffic Safety Administration sponsored a study</a> on the questions of electric vehicles and fires in 2017, which concluded that "the propensity and severity of fires and explosions from the accidental ignition of flammable electrolytic solvents used in [lithium-ion] battery systems are anticipated to be somewhat comparable to or perhaps slightly less than those for gasoline or diesel vehicular fuels."</p><p>Still, a combination of a very human fear of fire and Tesla's outsized position in the global auto industry has led to a predictable fixation on its runaway thermal occurrences, to borrow the technical term for battery fires.</p><p>Tesla has generally been proactive in dealing with fires. The company shielded its early battery packs for the Model S sedan to protect them from road damage that could lead to combustion, and it <a href="https://www.tesla.com/firstresponders">advises emergency crews</a> to douse battery conflagrations with thousands of gallons of water (foam, a means of fighting gas fires, can be used if water isn't available, but only to keep the blaze at bay). The carmaker also helps responders to deal with the voltages in Tesla vehicles when conducting rescues, and in reaction to recent fires, it <a href="https://www.businessinsider.com/tesla-updates-battery-software-after-a-shanghai-hong-kong-fires-2019-5">updated vehicle software</a>.</p><p><em><strong>Read more</strong>: <a href="https://www.businessinsider.com/why-tesla-should-go-into-stealth-mode-for-the-rest-of-2019-2019-5" data-analytics-position="3">It's time for Tesla to go into stealth mode for the rest of 2019</a></em></p><h2>Electric cars could end up being safer than ICE cars</h2><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/558ad00169bedd5d5757802c-2272/car engine fire.jpg" border="0" alt="car engine fire" data-mce-source="Wikimedia Commons" /><p class="source"><span>Wikimedia Commons</span></p><p class="caption">Gas-powered cars also catch fire.</p></div><p></p></div></div>Electric vehicles have the potential to be safer than their gas-powered relatives. But as far as lowering fire risk is concerned, we won't have any definitive sense of whether EVs are better until there are many more on the road, or until solid-state batteries replace lithium-ion units.</p><p>The drivetrain of an EV is far simpler than what you'd find in an internal-combustion car: a large lithium-ion battery pack, made up of smaller cells (thousands, in Tesla's case) sends power to one or more electric motors to move the wheels.</p><p>Contrast that with the hundreds of millions petrol vehicles on the road today. The internal-combustion engine requires a tank filled with an extremely volatile, flammable liquid; that liquid is then pumped under great pressure to an engine where, typically, it's mixed with air, sprayed into combustion chambers, ignited, and exploded, over and over and over again.</p><p>The energy from the fuel is transformed from potential power to kinetic power, with the up-down movement of the cylinders mechanically converted from linear motion to rotational motion, routed to the wheels through several shafts and a transmission packed with gears.</p><p>Rube Goldberg would be impressed. It's a testament to the skill of engineers that this entire clattering apparatus doesn't fly apart due to its own violent nature. Oh, wait, internal combustion engines can literally blow themselves to pieces. These days, that's usually in a race car being driven under extreme conditions on a track, but old-timers such as yours truly can remember when motors would throw a rod, blow a head gasket, seize up, or when cars would burn after their gas tanks were compromised.</p><p>They also sometimes combust when they're just sitting around. <a href="https://www.nytimes.com/2017/11/04/business/bmw-recall-fire.html">BMW recalled about a million cars in 2017</a> to address such a risk - which is, in fairness, extremely low in modern automobiles. Gas-vehicle fires are also easier to extinguish, while fires from electric-vehicle batteries can burn for hours or even days, sometimes reigniting after firefighters think the blaze is over (this happened with a Tesla earlier this year in Florida.)</p><h2>The problem with thinking that engineering is magic</h2><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5c7e85a3262898614e19e716-1024/gettyimages-1048741014.jpg" border="0" alt="Old Car" data-mce-source="USC/Getty Images" /><p class="source"><span>USC/Getty Images</span></p><p class="caption">Get under the hod and learn something!</p></div><p></p></div></div></p><p>Not grasping that an automobile is a type of well-managed detonation leads to magical thinking and toxic misunderstandings. But if you know even just a little bit about engineering, you understand that an electric vehicle's technology is not that much different from your iPhone or laptop meeting up with a blender. In fact, a Tesla car is basically a large remote-control car, it's just too challenging for a child to operate.</p><p>My father and uncle were both engineers, and my grandfather was an amateur mechanic, so I grew up around the demystification of machines. But I don't think my insights are unique. Anyone can plainly see that the design of an electric vehicle is potentially safer than an internal-combustion car. (That takes nothing away from the engineers who have been working on ICE cars for decades; they've created magnificent levels of safety from a dangerous initial idea.)</p><p>Still, it's worth considering that to get my iPhone battery to spark and burn, I'd have to smash it with something heavy, a lot, and it might not combust (the battery also might malfunction on its own and short-circuit). Whereas all I need to do to ignite gasoline is strike a match.</p><p>Look, I get it. Runaway thermal events, a.k.a. battery fires, are scary - more so because thermal runaway with lithium-ion batteries can happen in seemingly random ways. There have been Tesla accidents that have involved fires and tragic loss of life.</p><p>Adding to the concern is that electric cars are a new thing. And new things provoke anxiety. The danger of internal-combustion engines is something we've lived with for over 100 years. We've seen Indy 500 race cars explode in flames; we've witnessed countless cars blow up in movies; and many of us witnessed a burning vehicle on the road. Experience is our guide, and experience can be far more powerful, with justification, than reason.</p><h2>We should pay more attention to gas-vehicle fires - but there are way too many of them</h2><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/55d5f52ebd86ef10008b49f6-2400/parking lot.jpg" border="0" alt="parking lot" data-mce-source="REUTERS/TIM WIMBORNE" data-mce-caption="A parking lot full of cars." data-link="http://pictures.reuters.com/C.aspx?VP3=SearchResult&amp;VBID=2C0BXZ0ZPSNXU&amp;SMLS=1&amp;RW=2048&amp;RH=1036" /><p class="source"><span><a href="http://pictures.reuters.com/C.aspx?VP3=SearchResult&amp;VBID=2C0BXZ0ZPSNXU&amp;SMLS=1&amp;RW=2048&amp;RH=1036">REUTERS/TIM WIMBORNE</a></span></p><p class="caption">A parking lot full of cars.</p></div><p></p></div></div></p><p>Every single automaker on Earth builds and sells vehicles that can and do catch fire. But Tesla gets most of the attention when its vehicles catch fire.</p><p>Yes, this is partly driven by the incidents where Tesla cars have ignited without any apparent reason. But it's also because of the media's tendency to report news on anything and everything, good and bad, about the carmaker.</p><p>CEO Elon Musk points this out all the time. He argues that journalists should cover vehicles that aren't Teslas when they catch fire, under whatever circumstances, because there are so many more gas-powered car fires annually.</p><p>OK, point taken. But that would be quite difficult. Why? Because <a href="https://www.usfa.fema.gov/downloads/pdf/statistics/v19i2.pdf">according to 2018 data from the Federal Emergency Management Agency (FEMA)</a>, 171,500 "highway vehicles" of various types caught fire in the US alone between 2014-2016. One in eight fires that fire departments respond to is a vehicle fire, FEMA reported.</p><p>That's 157 vehicle fires <em>per day.</em> You'd need some pretty diligent robot journalists to keep track of that much carnage. (As for EV fires, Business Insider <a href="https://www.businessinsider.com/why-tesla-cars-catch-on-fire-2019-4">counted 20 Tesla fires since 2013</a>, while Chevy dealt with at least one fire in its Volt hybrid-electric vehicle in 2011 by recalling the car. Other automakers have seen a small number of fires since EVs began to hit to road in appreciable numbers since 2010, with Fisker Automotive losing 16 stored vehicles that were flooded by Hurricane Sandy in 2012.)</p><p>I'm not going to entirely let Tesla off the hook here. As the company builds and sells more cars, it's possible that its fire stats will become significant, at which point the design of its batteries might be legitimately questioned.</p><p>But you know who'll do that? Engineers. And they might still conclude that EVs are comparatively safer than what we've been driving our kids around in for more than 100 years.</p><p class="tagline">Get the latest Tesla stock price<a href="http://markets.businessinsider.com/stock/TSLA-Quote"> <strong>here.</strong></a></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/elon-musk-tesla-robotaxi-app-make-money-repurposing-cars-autonomous-2019-4">Elon Musk says Tesla owners could make up to $30,000 a year turning their cars into 'robotaxis'</a></h3>        <div>            <iframe class="bijwplayerclass" data-player="jwplayer" src="https://content.jwplatform.com/players/n7Sefg6x-CEZHWCBG.html" width="100%" height="100%" frameborder="0" scrolling="auto" style="margin:0px;" allowfullscreen=""></iframe><script>function receiveMessage(event){ console.log(event.data.fullscreen); Android.fullscreen(event.data.fullscreen); }window.addEventListener("message", receiveMessage, false);</script>        </div>    </div>

Tesla is facing scrutiny for its cars catching on fire, but electric cars could actually end up being safer than gas-powered cars

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5cc09ed0b14bf441781ba767-2400/gettyimages-1035234230.jpg" border="0" alt="Elon Musk" data-mce-source="David McNew/AFP/Getty Images" data-mce-caption="Elon Musk speaks near a Falcon 9 rocket during his announcement that Japanese billionaire Yusaku Maezawa will be the first private passenger who will fly around the Moon aboard the SpaceX BFR launch vehicle, at the SpaceX headquarters and rocket factory on September 17, 2018 in Hawthorne, California. - Japanese billionaire businessman, online fashion tycoon and art collector Yusaku Maezawa was revealed as the first tourist who will fly on a SpaceX rocket around the Moon." /><p class="source"><span>David McNew/AFP/Getty Images</span></p><p class="caption">Tesla CEO Elon Musk.</p></div><p></p></div></div></p><ul class="summary-list"><li><a href="https://www.businessinsider.com/category/tesla">Tesla's</a> recent precipitous stock-price decline has led to some renewed speculation that it could be bought by a deep-pocketed tech firm.</li><li>CEO Elon Musk has reportedly discussed a <a href="https://markets.businessinsider.com/stocks/tsla-stock">Tesla</a> acquisition with both Google and Apple in the past.</li><li>NYU professor <a href="https://www.businessinsider.com/tesla-acquired-by-tech-firm-within-year-scott-galloway-2019-5">Scott Galloway thinks somebody could buy Tesla in 12 months</a> if it drops below $100 per share.</li><li>But nobody is going to buy Tesla. The company is on its own from here on out.</li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories</a>.</li></ul><p> </p><p>A persistent dream of Tesla boosters has been that a technology giant with piles of cash would swoop in and rescue Tesla from doom, should the carmaker's finances become so tattered that bankruptcy threatens.</p><p>Reportedly, CEO Elon Musk has in the past talked with both Google and Apple about possible takeovers. But Tesla remains independent.</p><p>It's also in the midst of a severe stock swoon that's knocked shares down 40% since the beginning of the year, to around $190. Is the bottom in sight? Who knows, but the Silicon-Valley-to-the-rescue narrative is back in vogue, this time from NYU professor Scott Galloway, who previously called Amazon's buyout of Whole Foods.</p><p>Galloway doesn't think a major automaker would buy Tesla, but he seems to think that a tech firm might take a shot, or so he suggested on Kara Swisher 's Recode podcast.</p><p><em><strong>Read more: </strong><a href="https://www.businessinsider.com/tesla-tanking-stock-price-good-for-company-2019-5">Tesla's tanking stock price is actually the best thing that's happened to the company recently</a></em></p><p>The problem with this prediction is that nobody wants to buy Tesla anymore - except for maybe investors, who recently gobbled up a nearly $3-billion stock offering. Tesla looked better as an acquisition target a few years back, before it became a 250,000-per-year carmaker and revealed that it wasn't immune to the economics of the auto industry. It might be relatively cheaper, but it's now a huge execution risk, as the company's ambitions collide headlong with the capital-intensive nature of making hundreds of thousands of cars.</p><h2>A Tesla buyer would be acquiring a lot of baggage</h2><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5424153a69bedd303f97c797-1600/84054070947c5ebf4dbdo.jpg" border="0" alt="Scott Galloway at DLD" data-mce-source="Hubert Burda Media" data-mce-caption="Scott Galloway at DLD" data-link="http://www.flickr.com/photos/hubertburdamedia/8405407094/in/photolist-neaTvJ-neaNQG-neaUCN-neaTU9-neaTNN-neaU6v-ngbwuV-nkQZPv-nmaE2j-nkQWFs-nj5PKw-dNKUFY-nganGp-nga2kK-nkQUWq-nm8nNn-nnNjQn-nkQWgu-nj5SCW-nmaELW-ax126R-54dLDh-53sJUs-c8krnb-ax3LQ9-6jRkDS-nnTTS4-nn4UVT-nkkAAN-nk1YXs-nkikLT-nn4UqK-c9i21y-8Wo8L7-8WkqPn-8Woupy-9Auzf4-8Woub1-8Wovxo-54T3c2-c9hWrN-c9i6Zm-8jXDvb-c8M2KW-nkQZhD-nmaDMb-ne7D79-nkQVBJ-nkQWLB-ne7CDQ" /><p class="source"><span><a href="http://www.flickr.com/photos/hubertburdamedia/8405407094/in/photolist-neaTvJ-neaNQG-neaUCN-neaTU9-neaTNN-neaU6v-ngbwuV-nkQZPv-nmaE2j-nkQWFs-nj5PKw-dNKUFY-nganGp-nga2kK-nkQUWq-nm8nNn-nnNjQn-nkQWgu-nj5SCW-nmaELW-ax126R-54dLDh-53sJUs-c8krnb-ax3LQ9-6jRkDS-nnTTS4-nn4UVT-nkkAAN-nk1YXs-nkikLT-nn4UqK-c9i21y-8Wo8L7-8WkqPn-8Woupy-9Auzf4-8Woub1-8Wovxo-54T3c2-c9hWrN-c9i6Zm-8jXDvb-c8M2KW-nkQZhD-nmaDMb-ne7D79-nkQVBJ-nkQWLB-ne7CDQ">Hubert Burda Media</a></span></p><p class="caption">NYU professor Scott Galloway.</p></div><p></p></div></div></p><p>This doesn't mean Tesla has a worthless business; quite the contrary - it could eventually post some enviable profit margins, if it dials back its ambitions to flood the market with vehicles. </p><p>But technology companies that might have looked at the multi-trillion global auto industry a ripe opportunity have now sampled the market and decided the actually building and selling cars probably isn't the way to go. Better to do as Waymo has done, developing a hardware-and-software self-driving system that can be installed in vehicles manufactured by partners such as Chrysler and Land Rover.</p><p>Or to do as General Motors has done, integrating a self-driving startup - Cruise - with existing, well-establishing manufacturing processes.</p><p>For the sake of argument, however, what would Apple get if it bought Tesla?</p><p>It would get a pile of debt and extensive production obligations, not to mention immense future capital demands and a volatile CEO in Musk. All so it could make Tesla into the Apple Car. Not worth it. </p><h2>Tesla's real value was in absorbing risk</h2><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5a861bcdd0307263058b4662-1800/tesla model 3-33.jpg" border="0" alt="Tesla Model 3" data-mce-source="Hollis Johnson/Business Insider" /><p class="source"><span>Hollis Johnson/Business Insider</span></p><p class="caption">The Tesla Model 3.</p></div><p></p></div></div></p><p>Apart from its beloved brand and some technical innovations, Tesla isn't unique. It was a few years back, and most major automakers knew it. That's why they watched and waited as Tesla essentially created a market for electric cars, soaking up all the early risk. </p><p>The automakers that want to take the EV plunge have now dived in. Those that haven't could plausibly partner with Tesla without having to acquire the California company. In fact, that's what happened when Tesla was much smaller and Daimler and Toyota took equity stakes that led to lucrative exists when Tesla's stock price surged.</p><p>So with apologies to Prof. Galloway, nobody is going to buy Tesla - not a traditional automaker nor a big tech firm that might bafflingly want to obliterate billions.</p><p>Tesla, for better or worse, is on its own from here on out.</p><p class="tagline">Get the latest Tesla stock price<a href="http://markets.businessinsider.com/stock/TSLA-Quote"> <strong>here.</strong></a></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/elon-musk-jeff-bezos-feud-rivals-spacex-blue-origin-2019-5">Why Elon Musk and Jeff Bezos are in an epic feud that's lasted years</a></h3>        <div>            <iframe class="bijwplayerclass" data-player="jwplayer" src="https://content.jwplatform.com/players/47dtRaOH-CEZHWCBG.html" width="100%" height="100%" frameborder="0" scrolling="auto" style="margin:0px;" allowfullscreen=""></iframe><script>function receiveMessage(event){ console.log(event.data.fullscreen); Android.fullscreen(event.data.fullscreen); }window.addEventListener("message", receiveMessage, false);</script>        </div>    </div>

Nobody is going to buy Tesla - the company is now on its own

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5769c57791058425008ca9f0-2400/gettyimages-479833746.jpg" alt="Elon Musk" data-mce-source="Scott Olson/Getty Images" data-mce-caption="Elon Musk." /><p class="source"><span>Scott Olson/Getty Images</span></p><p class="caption">Elon Musk.</p></div><p></p></div></div>Tesla CEO Elon Musk said it's a "fundamental misunderstanding" to believe eliminating zero-emission vehicle (ZEV) credits would hurt Tesla competitively.</p><p>Musk took time to debunk the theory that the political climate under Trump will hurt Tesla's auto business during a question-and-answer session held Thursday, which followed <a href="http://www.businessinsider.com/tesla-shareholders-have-approved-the-solarcity-takeover-2016-11" target="_blank">shareholders voting in favor</a> of Tesla's acquisition of SolarCity.</p><p>Trump, an <a href="http://www.businessinsider.com/trump-presidency-bad-tesla-solarcity-2016-11" target="_blank">ardent climate denier</a> who has expressed strong support for the US coal and oil industries, has led many to believe he could put pressure on California to abolish its ZEV mandate.</p><p>But Musk said eliminating ZEV credits, if it should ever happen, would actually improve Tesla's competitive position in the market.</p><h2>What ZEV credits mean for Tesla</h2><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/57322d5fdd089572028b48c1-2400/screen shot 2016-05-10 at 11.23.22 am.png" alt="tesla model 3" data-mce-source="YouTube/Motor Trend" /><p class="source"><span>YouTube/Motor Trend</span></p><p class="caption">Tesla's Model 3.</p></div><p></p></div></div></p><p>First, some background on ZEV credits and Tesla's stance on the program.</p><p><span>The ZEV mandate is run by the California Air Resources Board (CARB) and requires automakers to sell a certain number of zero-emissions vehicles or risk a fine. The mandate has been adopted by nine other states, such as Maryland and Maine.</span></p><p><span>Automakers who are unable to earn enough ZEV credits toward compliance can choose to buy the credits from other companies.</span></p><p><span>Because T</span>esla, naturally, only sells electric cars in states supporting the mandate, it always has an excess of ZEV credit that it then sells to other automakers. <a href="http://www.businessinsider.com/tesla-zev-credits-ok-2016-10" target="_blank">Tesla made $139 million</a> in the third quarter from selling ZEV credits.</p><p>But because of the way the program is set up, there's an oversupply of ZEV credits flooding the market. That's made it harder for Tesla to consistently turn a profit from selling them. For example, ZEV credits were so negligible in the second quarter that Tesla didn't even break them out.</p><p>As <a href="http://www.bloomberg.com/news/articles/2016-08-04/musk-tears-into-california-board-over-emission-credits-standards" target="_blank">Bloomberg reported</a> at the time, this sparked a particularly nasty tirade by Musk on Tesla's second-quarter earnings call. </p><p>"The California Air Resources Board is being incredibly weak in its application of ZEV credits," he said. "The standards are pathetically low. They need to be increased.... It's a crying shame that they haven't. And as a result, you can barely sell the ZEV credits for pennies on the dollar."</p><p>Musk said Thursday that Tesla typically makes "50 cents on the dollar" when it sells ZEV credits, a claim <a href="http://www.businessinsider.com/tesla-zev-credits-ok-2016-10" target="_blank">he also made</a> during Tesla's third-quarter earnings call.</p><h2>The incentives 'are disadvantageous'</h2><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5823107c691e882a4e8b4e19-1778/ap_16314319459998.jpg" alt="Donald Trump" data-mce-source="AP" data-mce-caption="Donald Trump." /><p class="source"><span>AP</span></p><p class="caption">Donald Trump.</p></div><p></p></div></div></p><p>Musk's general criticism of the ZEV mandate is why he said Trump's presidency wouldn't really affect Tesla.</p><p>"The incentives either don't scale or are disadvantageous," he said Thursday. "If General Motors or Ford or somebody else makes electric vehicles, they get to monetize their ZEV credit at 100 cents on the dollar, so if there are two ZEV credits per vehicle, General Motors would have a $5,000 cost advantage over Tesla."</p><p>"If people are concerned about Tesla incentives, they should be concerned with, 'Well, how does Tesla overcome the disadvantage of EV incentives,'" Musk continued.</p><p>Now, a counter-argument would be that even if the ZEV credit mandate doesn't fully play to Tesla's favor, it's still a source of income that would be detrimental to lose.</p><p>"If ZEVC (ZEV credits) were removed, for example, Tesla Motors would lose a major source of income at a time when it is looking to ramp up its operations in order to launch the Model 3," BMI research wrote in a report, according to <a href="http://www.forbes.com/sites/neilwinton/2016/11/09/tesla-might-suffer-if-trump-weakens-fuel-economy-rules-electric-subsidies-report/2/#2728d5511890" target="_blank">Forbes</a>. </p><p>The counter there, essentially, is that it's unfair to consider the ZEV mandate a "major source of income." Although it played a role in getting Tesla to turn a profit in the third quarter, Tesla's second profitable quarter ever, the revenue Tesla draws in from ZEV credits is not consistent from quarter-to-quarter.</p><p>CFRA Research analyst Efraim Levy told Business Insider that ZEV credits are not a big enough piece of the Tesla pie to really determine its future profitability.</p><p>"Broadening it out to the big picture, if you're buying Tesla stock or even holding it, you're not dependent on the ZEV credits for your thesis," he said.</p><p>"If you want to buy Tesla, it's because either you want to invest in someone who is changing the world, whether or not you make money, or because you expect them to become very profitable when they bring out their mass market vehicle the Model 3," he continued.</p><p>But all of this is not to say Musk is a proponent of eliminating ZEV credits.</p><p>"We do believe there should be incentives and government incentives for electric vehicles, but we believe they should be there for the good of the industry and to accelerate the advent of sustainable transport," he said.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/elon-musk-unveils-solar-roof-solarcity-video-2016-10">Elon Musk just unveiled something that could revolutionize how you power your home </a></h3>        <div>            <div>    <script src="http://player.ooyala.com/v3/6e12e8b3387a44daacfb73afba25a76e"></script>    <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="ZtcHQzNzE6rJiNVeNBtErYRi4yljUmMb" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>    <script>    if (typeof RunFunctions === 'undefined') { var RunFunctions = []; }     RunFunctions.push(function()    {         var ooyalapopvideo = OO.Player.create('ooyalaplayer_popvideo', 'ZtcHQzNzE6rJiNVeNBtErYRi4yljUmMb',{ autoplay: 'false' });     });    </script>    <noscript><div>Please enable Javascript to watch this video</div></noscript></div>        </div>        <script>(function() { function createPlayer() { OO.ready(function() { RunFunctions.forEach(function(ooyalaFunction) { ooyalaFunction(); }); RunFunctions = [];}); } createPlayer(); }()); </script>    </div>

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