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Msg  501310 of 535596  at  6/1/2023 3:12:28 PM  by


 In response to msg 501219 by  us2u001
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Re: Tesla Article


<<Tesla’s ability to report a profit is provided by fuel-economy credits that regulators have enabled it to sell to other automakers. Tesla itself is living off the pickup truck profits that support the domestic industry.>>


I know we all like to bash Tesla but the above statement is no longer true. It was true until 2020, the last year that Tesla’s regulatory credits were larger than its net income. In 2021 regulatory credits contributed 26% to net income and in 2022 that number was down to 14%.

Last year Tesla generated a lot of cash (did not have to sell any shares), was very profitable (with a 17.6% net income margin) and has now made up for all past losses. The balance sheet as at 31March2023 is showing $15.4 billion of retained earnings. Of course, regulatory credits are just one element of the support provided by governments to the EV industry but it is hard to argue with Tesla’s success as an EV car manufacturer. The truth is that, rather than Tesla, all other car makers are living off the ICE profits to support their EV side of the business.

Here are Tesla’s income statements for the last three years:


Automotive Regulatory Credits

- We earn tradable credits in the operation of our automotive business under various regulations related to ZEVs, greenhouse gas, fuel economy and clean fuel. We sell these credits to other regulated entities who can use the credits to comply with emission standards and other regulatory requirements.

- Our revenue from automotive regulatory credits is directly related to our new vehicle production, sales and pricing negotiated with our customers. We monetize them proactively as new vehicles are sold based on standing arrangements with buyers of such credits, typically as close as possible to the production and delivery of the vehicle or changes in regulation impacting the credits.

- Automotive regulatory credits revenue increased $311 million in 2022 primarily due to changes in regulation which entitled us to additional consideration of $288 million in revenue in the first quarter of 2022 for credits sold previously. Without that retroactive increase we had only an immaterial increase in automotive regulatory credits revenue.



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Msg # Subject Author Recs Date Posted
501311 Re: Tesla Article mdwitte 4 6/1/2023 3:18:53 PM
501315 Re: Tesla Article newtoboard 3 6/1/2023 4:03:08 PM
501320 Re: Tesla Article coolreit 3 6/1/2023 4:21:56 PM

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