Tesla Stock Drops. This Sales Stream Is Drying Up.

Coming into Friday trading, Tesla stock was down about 17% year to date and up about 57% over the past year. (Dreamstime)

Tesla stock was fell Friday after a report underscored how a key source of income was fading away.

Shares of the electric-vehicle maker fell 1.5% to $330.56, while the S&P 500 fell 0.3% and the Dow Jones Industrial Average gained 0.1%.

The move came after The Wall Street Journal reported that Tesla peers Rivian and Lucid were having trouble getting required paperwork from the National Highway Traffic Safety Administration, or NHTSA, for finalizing zero-emission credit deals.

Car makers essentially earn credits for making zero-emission vehicles. Auto makers that don’t make enough can buy credits from those that do. EV makers only sell zero-emission vehicles, so they have excess credits to sell.

Tesla has generated about $6.4 billion in credit sales over the past three years, which is about one-quarter of the company’s reported operating income over that span. Rivian generated roughly $160 million in credit sales in the first half of 2025. It doesn’t expect to generate any additional sales for the rest of the year. Management’s initial expectation was for $300 million in credit sales for 2025.

Credit sales are on the decline after the Trump administration removed penalties for violating federal emissions standards and took away California’s authority to regulate its air emissions.

Rivian stock added 1.5%, closing at $12.24. Lucid stock dropped 3.1%, closing at $2.18.

The reason the moves aren’t uniform, or larger, is that the loss of credit sales has been on investors’ radar for months. The paperwork issue is an example of how the issue is unfolding.

NHTSA didn’t respond to Barron’s request for comment about the credits.

“NHTSA is focusing on fixing CAFE standards to make cars more affordable again,” the agency told the WSJ. “When that process is complete, we will return to issuing compliance letters to manufacturers.”

Coming into Friday trading, Tesla stock was down about 17% year to date and up about 57% over the past 12 months. Shares were also up about 1.8% for the week.

Write to Al Root at allen.root@dowjones.com