Tesla reported its lowest profit margin in over five years and missed Wall Street earnings targets in Q2, as the company cut prices to boost demand while increasing spending on AI projects. However, Tesla’s carbon credit (regulatory credits) revenue is at an all-time high, hitting $890 million.
Tesla Profit Struggles Amid Carbon Credit Sales Surge
Tesla reported a 45% drop in profit for Q2, earning $1.5 billion on $25.5 billion in revenue, compared to $2.7 billion on $24.9 billion in the same period last year. Thus, the operating profit margin fell to 6.3% from 9.6%.
This decline in profit increases pressure on CEO Elon Musk to find new growth avenues. Despite this, Tesla shares have surged 40% since May, driven by investor optimism that Musk will transform Tesla into an AI company offering driverless taxis and robots.
Tesla’s Q2 electric car sales fell 4.8% to 444,000 vehicles, with production down 14% to about 411,000 cars. This setback follows a 55% drop in profit and a 9% revenue decline in Q1 2024.
Tesla faces increasing competition as other manufacturers ramp up electric vehicle production. For the first time, Tesla’s share of U.S. electric vehicle sales fell below 50% in Q2, according to Cox Automotive.
Amid all these lackluster results, the EV giant has seen a record-high sale of carbon credits at $890 million, the highest since the company started selling these regulatory credits in 2017. This revenue stream is up 216% from $282 million a year earlier and a 102% increase from Q1 ($442m).

Competition Hits Tesla Hard: Carbon Credits to the Rescue
Most notably, the $890 million carbon credit revenue is almost 60% of Tesla’s Q2 net income of $1,494 million. Thus, carbon credit sales bolstered the company’s bottom line.
This additional revenue stream is essentially pure profit, as companies can bank credits exceeding their immediate needs. For an EV-only company like Tesla, which has no combustion business to offset, the constant flow of these credits has been a financial “gusher,” comparable to a highly profitable oil strike in the fossil fuel industry.
Tesla continues to profit from selling carbon credits to competitors who need to comply with emissions standards. This business model is highly lucrative for Tesla, as earning these credits incurs minimal costs, translating to pure profit. This revenue stream has been crucial for Tesla’s financial success.
The EV maker aims to produce new, more affordable EVs by early 2025, though cost reductions will be less than expected. The company laid off over 10% of its workforce to reduce costs, and profits were impacted by restructuring charges and higher operating expenses driven by AI projects. Automotive gross margin, excluding regulatory credits, was 14.6%, below the estimated 16.29%.
As a result of a series of price cuts, profit per vehicle plummeted.

Elon Musk acknowledged that the influx of more affordable electric cars from other manufacturers “has made it more difficult for Tesla” to sell vehicles. From April through June, Tesla’s share of U.S. electric vehicle sales dropped to 49.7%, down from 59.3% a year earlier, according to Cox Automotive.
Ford Motor sold nearly 24,000 EVs in Q2, a 61% increase from a year ago, while General Motors’ sales of battery-powered models rose 40% to nearly 22,000 vehicles. Investment analyst Dan Coatsworth noted that Tesla has missed earnings targets for four consecutive quarters.
Another Growing Business For Tesla
CEO Elon Musk highlighted that new competitors have significantly discounted their EVs, challenging Tesla. The company’s EV deliveries have declined for two quarters, facing rising competition and slow demand due to a lack of affordable new models. Sales of China-made EVs, which are also exported, fell in Q2 compared to strong growth from Chinese automakers like BYD Co.
Despite these challenges, Tesla expects a production increase in Q3. Amid declining profits, the company has seen significant growth in its rapidly growing energy storage business.
In Q1 2024, energy storage deployments reached a record 4.1 GWh, with revenue and gross profit from the Energy Generation and Storage segment hitting all-time highs.
In Q2 2024, Tesla Energy deployed 9.4 GWh of energy storage products, including Megapacks, Powerwalls, and solar products. This marks a 132% increase from Q1 2024 and a 157% year-over-year rise.
The growing number of Megapack installations and an expanding fleet are expected to drive consistent profit growth in this segment. Battery system sales, primarily for electricity grids, doubled to $3 billion in Q2.
Tesla’s Q2 financials reflect a significant drop in profit and production amid intensified competition and rising operating costs. However, record-high carbon credit sales provided a crucial boost to the bottom line, demonstrating the importance of this revenue stream. As Tesla navigates these challenges, its investments in AI and energy storage hint at new growth avenues beyond electric vehicles.
The post Tesla’s Profit Sees a 5-Year Low But Carbon Credit Sales Hit Record High appeared first on Carbon Credits.
Carbon Footprint
Climate Impact Partners Unveils High-Quality Carbon Credits from Sabah Rainforest in Malaysia
The voluntary carbon market is changing. Buyers are no longer focused only on large volumes of cheap credits. Instead, they want projects with strong science, long-term monitoring, and clear proof that carbon has truly been removed from the atmosphere. That shift is drawing more attention to high-integrity, nature-based projects.
One project now gaining that spotlight is the Sabah INFAPRO rainforest rehabilitation project in Malaysia. Climate Impact Partners announced that the project is now issuing verified carbon removal credits, opening access to one of the highest-quality nature-based removals currently available in the global market.
Restoring One of the World’s Richest Rainforest Ecosystems
The project is located in Sabah, Malaysia, on the island of Borneo. This region is home to tropical dipterocarp rainforest, one of the richest forest ecosystems on Earth. These forests store huge amounts of carbon and support extraordinary biodiversity. Some dipterocarp trees can grow up to 70 meters tall, creating habitat for orangutans, pygmy elephants, gibbons, sun bears, and the critically endangered Sumatran rhino.
However, the forest within the INFAPRO project area was not intact. In the 1980s, selective logging removed many of the most valuable tree species, especially large dipterocarps. That caused serious ecological damage. Once the key mother trees were gone, natural regeneration became much harder. Young seedlings also had to compete with dense vines and shrubs, which slowed the forest’s recovery.
To repair that damage, the INFAPRO project was launched in the Ulu-Segama forestry management unit in eastern Sabah.
- The project has restored more than 25,000 hectares of logged-over rainforest.
- It was developed by Face the Future in cooperation with Yayasan Sabah, while Climate Impact Partners has supported the project and helped bring its credits to market.
Why Sabah’s Carbon Removals are Attracting Attention
What makes Sabah INFAPRO different is not only the size of the restoration effort. It is also the way the project measured carbon gains.

Many forest carbon projects issue credits in annual vintages based on year-by-year growth estimates. Sabah INFAPRO followed a different path. It used a landscape-scale monitoring system and waited until the forest moved through its strongest natural growth period before issuing removal credits.
- This approach gives the credits more weight. Rather than relying mainly on short-term annual estimates, the project measured carbon sequestration over a longer period. That helps show that the forest delivered real, sustained, and measurable carbon removal.
The scientific backing is also unusually strong. Since 2007, the project has maintained nearly 400 permanent monitoring plots. These plots have allowed researchers, independent auditors, and technical specialists to observe the full growth cycle of dipterocarp forest recovery. The result is a large body of field data that supports carbon calculations and strengthens confidence in the credits.
In simple terms, buyers are not just being asked to trust a model. They are being shown years of direct forest monitoring across the project landscape.
Strong Ratings Support Market Confidence
Independent assessment has also lifted the project’s profile. BeZero awarded Sabah INFAPRO an A.pre overall rating and an AA score for permanence. That places the project among the highest-rated Improved Forest Management, or IFM, projects in the world.
The rating reflects several important strengths. First, the project has very low exposure to reversal risk. Second, it has a long and stable operating history. Third, its measured carbon gains align well with peer-reviewed ecological research and independent analysis.
These points matter in today’s market. Buyers have become more cautious after years of debate over the quality of some forest carbon credits. As a result, they now look more closely at durability, transparency, and third-party validation. Sabah INFAPRO’s rating helps answer those concerns and makes the project more attractive to companies looking for credible carbon removal.
The project is also registered with Verra’s Verified Carbon Standard under the name INFAPRO Rehabilitation of Logged-over Dipterocarp Forest in Sabah, Malaysia. That adds another level of market recognition and verification.
A Wider Model for Rainforest Recovery
Sabah INFAPRO also shows why high-quality nature-based projects are about more than carbon alone. The restoration effort supports broader ecological recovery in one of the world’s most important rainforest regions.
Climate Impact Partners said it has worked with project partners to restore degraded areas, run local training programs, carry out monthly forest patrols, and distribute seedlings to support rainforest recovery beyond the project boundary. These efforts help strengthen the wider landscape and expand the project’s environmental impact.
That broader value is becoming more important for buyers. Companies increasingly want projects that support biodiversity, ecosystem health, and local engagement, along with carbon removal. Sabah INFAPRO offers that mix, making it a stronger fit for the market’s shift toward higher-integrity credits.

The post Climate Impact Partners Unveils High-Quality Carbon Credits from Sabah Rainforest in Malaysia appeared first on Carbon Credits.
Carbon Footprint
Bitcoin Falls as Energy Prices Rise: Why Crypto Is Now an Energy Market Story
Bitcoin’s recent drop below $70,000 reflects more than short-term market pressure. It signals a deeper shift. The world’s largest cryptocurrency is becoming increasingly tied to global energy markets.
For years, Bitcoin has moved mainly on investor sentiment, adoption trends, and regulation. Today, another force is shaping its direction: the cost of energy.
As oil prices rise and electricity markets tighten, Bitcoin is starting to behave less like a tech asset and more like an energy-dependent system. This shift is changing how investors, analysts, and policymakers understand crypto.
A Global Power Consumer: Inside Bitcoin’s Energy Use
Bitcoin depends on mining, a process that uses powerful computers to verify transactions. These machines run continuously and consume large amounts of electricity.
Data from the U.S. Energy Information Administration shows Bitcoin mining used between 67 and 240 terawatt-hours (TWh) of electricity in 2023, with a midpoint estimate of about 120 TWh.

Other estimates place consumption closer to 170 TWh per year in 2025. This accounts for roughly 0.5% of global electricity demand. Recently, as of February 2026, estimates see Bitcoin’s energy use reaching over 200 TWh per year.
That level of energy use is significant. Global electricity demand reached about 27,400 TWh in 2023. Bitcoin’s share may seem small, but it is comparable to the power use of mid-sized countries.
The network also requires steady power. Estimates suggest it draws around 10 gigawatts continuously, similar to several large power plants operating at full capacity. This constant demand makes energy costs central to Bitcoin’s economics.
When Oil Rises, Bitcoin Falls
Bitcoin mining is highly sensitive to electricity prices. Energy is the highest operating cost for miners. When power becomes more expensive, profit margins shrink.
Recent market movements show this link clearly. As oil prices rise and inflation concerns persist, energy costs have increased. At the same time, Bitcoin prices have weakened, falling below the $70,000 level.

This is not a coincidence. Studies show a direct relationship between Bitcoin prices, mining activity, and electricity use. When Bitcoin prices rise, more miners join the network, increasing energy demand. When energy costs rise, less efficient miners may shut down, reducing activity and adding selling pressure.
This creates a feedback loop between crypto and energy markets. Bitcoin is no longer driven only by demand and speculation. It is now influenced by the same forces that affect oil, gas, and power prices.
Cleaner Energy Use Is Growing, but Fossil Fuels Still Matter
Bitcoin’s environmental impact depends on its energy mix. This mix is improving, but it remains uneven.
A 2025 study from the Cambridge Centre for Alternative Finance found that 52.4% of Bitcoin mining now uses sustainable energy. This includes both renewable sources (42.6%) and nuclear power (9.8%). The share has risen significantly from about 37.6% in 2022.
Despite this progress, fossil fuels still account for a large portion of mining energy. Natural gas alone makes up about 38.2%, while coal continues to contribute a smaller share.

This reliance on fossil fuels keeps emissions high. Current estimates suggest Bitcoin produces more than 114 million tons of carbon dioxide each year. That puts it in line with emissions from some industrial sectors.
The shift toward cleaner energy is real, but it is not complete. The pace of change will play a key role in how Bitcoin fits into global climate goals.
Bitcoin’s Climate Debate Intensifies
Bitcoin’s growing energy demand has placed it at the center of ESG discussions. Its impact is often measured through three key areas:
- Total electricity use, which rivals that of entire countries.
- Carbon emissions are estimated at over 100 million tons of CO₂ annually.
- Energy intensity, with a single transaction using large amounts of power.

At the same time, the industry is evolving. Mining companies are adopting more efficient hardware and exploring new energy sources. Some operations use excess renewable power or capture waste energy, such as flare gas from oil fields.
These efforts show progress, but they do not fully address the concerns. The gap between Bitcoin’s energy use and its environmental impact remains a key issue for investors and regulators.
- MUST READ: Bitcoin Price Hits All-Time High Above $126K: ETFs, Market Drivers, and the Future of Digital Gold
Bitcoin Is Becoming Part of the Energy System
Bitcoin mining is now closely integrated with the broader energy system. Operators often choose locations based on access to cheap or excess electricity. This includes areas with strong renewable generation or underused energy resources.
This integration creates both opportunities and challenges. On one hand, mining can support energy systems by using power that might otherwise go to waste. It can also provide flexible demand that helps stabilize grids.
On the other hand, it can increase pressure on local electricity supplies and extend the use of fossil fuels if cleaner options are not available.
In the United States, Bitcoin mining could account for up to 2.3% of total electricity demand in certain scenarios. This highlights how quickly the sector is scaling and how closely it is tied to national energy systems.
Energy Markets Are Now Key to Bitcoin’s Future
Looking ahead, the connection between Bitcoin and energy is expected to grow stronger. The network’s computing power, or hash rate, continues to reach new highs, which typically leads to higher energy use.
Electricity will remain the main cost for miners. This means Bitcoin will continue to respond to changes in energy prices and supply conditions. At the same time, governments are starting to pay closer attention to crypto’s environmental impact, which could shape future regulations.

Some forecasts suggest Bitcoin’s energy use could rise sharply if adoption increases, potentially reaching up to 400 TWh in extreme scenarios. However, cleaner energy systems could reduce the carbon impact over time.
Bitcoin is no longer just a financial asset. It is also a large-scale energy consumer and a growing part of the global power system.
As a result, understanding Bitcoin now requires a broader view. Energy prices, electricity markets, and carbon trends are becoming just as important as market demand and investor sentiment.
The message is clear. As energy markets move, Bitcoin is likely to move with them.
The post Bitcoin Falls as Energy Prices Rise: Why Crypto Is Now an Energy Market Story appeared first on Carbon Credits.
Carbon Footprint
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