Now the EPA is on a collision course with California and the 13 states that want stricter rules. The EPA said it wants a harmonized national fuel economy standard rather than a patchwork and said California’s benchmarks are “technologically infeasible.^[27]”

“The Trump Administration has launched a brazen attack, no matter how it is cloaked, on our nation’s Clean Car Standards,” wrote California Attorney General Xavier Becerra in a statement. “The California Department of Justice will use every legal tool at its disposal to defend today’s national standards and reaffirm the facts and science behind them.”

Here’s how this hurts Tesla

Since Tesla only makes electric cars, it can sell a variety of state and federal credits to other automakers who are having a harder time meeting the Obama-era goals. They come in three mutually exclusive categories: zero-emissions vehicle credits, greenhouse gas emissions credits, and fuel economy credits.

“They can leverage the same car in multiple categories,” said Benjamin Leard, a research fellow at Resources for the Future.

Other carmakers like Honda and Toyota^[28] also sell credits since they are beating the current standards.

According to Tesla’s latest 10-K filing^[29] with the Securities and Exchange Commission, the company has seen more and more money coming in from selling these credits. “Revenue from the sale of regulatory credits totaled $360.3 million, $302.3 million and $168.7 million for the years ended December 31, 2017, 2016 and 2015, respectively,” according to the filing.

The expectation was that as emissions limits ratchet down, conventional car companies would have to spend more on credits to comply with the rules or invest in cleaning up their cars. But with the emissions and fuel economy standards holding steady, the demand for new credits would shrink.

“I would certainly expect the prices of those credits to go down” with the rollback of the standards, Leard said.

Tesla is nonetheless gaining market share, though the company still wants tougher efficiency standards. “Fuel economy standards should be strengthened, not weakened,” Tesla spokeswoman Gina Antonini told Vox. “This is overwhelmingly the opinion of the scientific community.”