[meowface]

The rest of your arguments are valid, but the CO2 credit system is working as intended there. That's why it's called a credit. That's a lot of money that gets to be directly invested into getting electric cars in the hands of more people, which is what will actually reduce emissions in the long run.

Fiat's emissions already happened; they can't turn back time. Selling the credits to them will result in a net decrease in emissions (assuming they don't spend all the money on flamethrowers or something). If they didn't sell the credits, Fiat still put out exactly the same amount of emissions, and would be likely to do so in the future even with the fines.

If you've helped accelerate climate change, you're supposed to buy credits to offset the damage you've caused. If you've helped mitigate climate change, you're supposed to sell the credits, because the credits are there in the first place to incentivize mitigating climate change. This system obviously isn't sufficient to halt climate change all by itself, and maybe there are some other reasons it's a bad system, but it seems like the credit system is working exactly as it was supposed to. At the very least, I don't see what Tesla's doing wrong when it comes to that particular area.