this post was submitted on 09 May 2025
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Things at Tesla are worse than they appear (edition.cnn.com)
submitted 1 day ago by technocrit@lemmy.dbzer0.com to c/technology@lemmy.world
52 comments fedilink hide all child comments
 

Things are undoubtedly bad at Tesla. Its sales are dwindling. Its profits are plunging, as is its share price. There are regular protests outside its showrooms. The Cybertruck is a flop. And somehow, it’s actually a lot worse than that.

The 71% drop in net income it just reported may have been overshadowed by CEO Elon Musk’s announcement that he would be stepping back from his controversial duties at the Department of Government Efficiency (DOGE). But that drop is just one indication of serious financial sickness at the EV maker, problems brought on by falling sales for the first time in its history and falling prices for electric vehicles.

The bottom line problem at Tesla is its vanishing bottom line. A deeper look at its first quarter report shows it’s now losing money on what should be its ostensible reason for existence – selling cars.

It was only able to post a $409 million profit in the quarter thanks to the sale of $595 million worth of regulatory credits to other automakers.

But if the Trump administration gets its way, the company can kiss those regulatory credits keeping it in the black goodbye, too.

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[–] NotMyOldRedditName@lemmy.world 1 points 4 hours ago* (last edited 3 hours ago)

Not a single tesla vehicle has ever been profitable as an actual vehicle.

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.