[zaroth]

Tesla had to manufacture and sell $7.6B in cars to qualify for those credits. As such the credits boosted their gross margin from 23.6 to 27.7%.

The credit revenue will continue as long as competitors continue to sell their polluting ICE vehicles which need EV offsets. And after factoring in credit revenue, Tesla will continue to aim for marginal profits just above break-even while investing as much as possible back into growth.

Their cars generate an industry leading margin even without the credits. So if the question is, could Tesla be profitable without that $397mm the answer is obviously Yes, by spending $397mm less on future growth.

Last year Toyota Motors EVP in North America said, “This is going to be a slow evolution in the U.S. market, unlike in China and Europe where there are government regulations. Nobody is selling electric vehicles at a profitable margin.”

The statement was wrong when he said it, but even more wrong now. EV is clearly a disruptive technology that is poised to become superior in every possible metric for passenger cars, and even short-haul trucking.

Honestly it’s past the time for harping on the “Tesla is structurally unprofitable” trope — I think it’s just willful blindness at this point.