Tesla’s just-released annual 10-K for 2015 acknowledges that sales in China tanked by 33 percent, and the market value for environmental credits has plunged by 49 percent, since last year.

The Tesla Motors (TSLA:NASDAQ) business strategy used huge U.S. federal and state regulatory credits for environmental mitigation to fund the company’s development and production of battery-powered electric vehicles in the U.S. and worldwide.

In May 2014, CEO Elon Musk’s letter to shareholders trumpeted the company’s first export of a Model S to China and he promised in a follow-up conference-call that: “We plan to expand in China as fast as possible because we believe the country could be one of our largest markets within a few years.”

Musk emphasized the company was investing heavily to build out its network of battery-charging stations and service centers across China “as fast as possible.” Expectations were so high for 50 percent compounded sales growth in China that Tesla planned to open a new manufacturing plant in China by 2018 to avoid paying a 25 percent import tariff, and because “shipping two tons of metal over long distances is not very efficient.”

But China sales fell in 2015 to just $319 million from $477.1 million in 2014.

With a population of 1.3 billion, China sales have fallen from Tesla’s number two market to its number three market, behind Norway with a population of only 5.1 million. The only reason Norway moved up is that sales in that country fell by only 14 percent, from $412 million to $356 million in 2015.

Total auto sales revenue for Tesla vehicles that sold for an average of about $100,000 per unit did grow from $3 billion to $3.74 billion. But that 25 percent growth rate is only about the same 2015 as Fiat Chrysler (NYSE:FCAU) Jeep sales growth, which rose from 692,348 units in 2014 to 865,028 units in 2015, based on an average sales price of about $34,000 per unit.

Tesla’s 82-page annual 10-K for 2015 also contains a jarring comment on Page 55: “Revenue from the sale of regulatory credits totaled $168.7 million, $216.3 million, and $194.4 million for the years ended December 31, 2015, 2014 and 2013.”

Tesla in 2014 realized an average of $12,960 for the sale of federal and state regulatory credits on the sale of each of the 16,689 new Model S vehicles sold in the U.S.

But Tesla in 2015 realized only an average of $6,638 for the sale of environmental credits on each of the 25,202 Model S and 214 Model X vehicles sold in the U.S. That means that market value for those environmental credits expected to fund Tesla’s expansion plunged in 2015 by 49 percent, costing Tesla about $113.1 million in cash.

Page 40 of Tesla’s 10K for 2015, under the “Liquidity and Capital Resources” section,  states, “Sources of cash are predominately from our deliveries of vehicles, as well as customer deposits, sales of regulatory credits, proceeds from financing activities.”

Despite the price of oil plunging by about 75 percent since mid-2014, Tesla, based on management’s expectations for weekly production and deliveries of their Model S and Model X vehicles combined, will produce about 88,400 vehicles in 2016.

But if the selling price this year for “regulatory credits” does not return to 2014 levels, Tesla will come up about $393.4 million short on cash flow compared to its business plan just two years ago.