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Things at Tesla are worse than they appear
(edition.cnn.com)
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this post was submitted on 09 May 2025
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This honestly couldn't be further from the truth.
Tesla's vehicles once ramped have always been extremely profitable (except probably the CyberTruck as it hasn't properly ramped due to low demand)
Any losses you see are due to their aggressive growth involving capital expenditures and research and development. It's not that the vehicle isn't profitable.
The ZEV credits are just bonus money that they can then leverage to expand faster.
Edit: If you want to try and see this another way that might make sense... The Model S and X were very profitable, but they didn't make enough money to fund the expansion for the Model 3 and Y. Ditch the Model 3 and Y, and remain a boutique luxury car company, and they would posted profits instead of losses. It wasn't the cars losing money, it was the growth. The ZEV credits accelerated that growth immensely by giving them more breathing room.
Ah, so the actual reason for the loss is that they can't expand capacity without squandering vast amounts of money. That's much better.
A thing would need to officially be a flop to be considered squandered like the Cybertruck is looking like.
They might have a few failures ahead of them yet though, but you can't call a mid flight project squandered.
Edit: e.g part of that loss could be attributed to them finalizing and now starting production at the megapack factory at Shanghai. Short of Elon backlash stopping sales of their commercial batteries, that won't be squandered and will make a billion or two or three in profits this year.
You have just argued against the article itself. Should we believe you?
The article doesn't say they've never made a profit on any of their cars. If that's what you got from that, you should try reading it again.
Also, if you make 1 billion in profit on something, and then spend 2 billion researching and developing and setting up a factory to build a new product, you end up with a loss of 1 billion. That does not mean your first thing is unprofitable. This is pretty basic stuff.
The vehicles are profitable, they just didn't provide enough profit this quarter to cover their R&D and capital expenditures for growth.
Edit: Sorry, and in case it wasn't clear, their R&D and capital expenditures dwarf the ZEV credits every quarter.