Sure, and it's great that Tesla made a profit just on EV sales for the first time. Credit where credit is due, Tesla posted a whopping 6x net income in 2021 over 2020, with the biggest increases in sales being in China and Europe; however, given Tesla's history, I'm skeptical that this trend will continue, especially with the supply chain disruptions that Musk didn't plan for.
No one assumed that they were being given regulatory credits by the EV Fairy and were not attached to any work they've done. Instead of an SEC document which will be hard for people to read, it would probably be more effective to just link a source that describes how they're assigned. It would also be good for anyone coming into the conversation late and just wanting to understand what regulatory credits are:https://www.sec.gov/Archives/edgar/d...a-20211231.htm
Automotive regulatory credits includes sales of regulatory credits to other automotive manufacturers. Our revenue from automotive regulatory credits is directly related to our new vehicle production, sales and pricing negotiated with our customers
- LinkOriginally Posted by (CNBC) What ‘regulatory credits’ are — and why they’re so important to Tesla
The problem with the regulatory credits isn't the selling of the credits themselves, although it does make the idea of being a "green" company while selling credits to companies like GM a bit funny (and has been something Tesla has not wanted to engage with historically because they know it's a bad look), but it's when people try to convey this as meaning Tesla's car sales are profitable. There's a difference between:
"We sell electric vehicles for a profit."
and
"We sell electric vehicles for a loss, but use government-provided regulatory credits to sustain our business."
Full disclosure, I am a layperson when it comes to understanding the inner workings large-scale business, and it's far outside of my realm of expertise so I have to rely on professionals to form my opinions on how these things work. In this case, that would be the interpretation of how much Tesla made in 2020, including both car sales and regulatory credits. With this in mind, why should I take your word over someone who is credentialed and writing for a reliable news source? Understand that I have to choose between believing you or believing the article's writer, Chris Isidore, who is a business writer, overseen by editors, and focuses on financial news. I'm not trying to be rude, but I'm sure you see the problem here.
I'm only referring to Musk's ability to run a profitable business. This was my original post:We were specifically talking about car production and profitability.
Even if you take the company as a whole, it's now making money hand over fist producing cars.
Which is entirely about Tesla not being profitable, which started with this article, that describes Tesla losing billions of dollars due to supply chain disruptions. This is why I'm focused on net income, and disregard gross income. I'm not concerned with Tesla selling cars, I'm concerned with Tesla, for almost its whole lifetime, selling cars for a loss (i.e.: selling cars and not making a profit after all deductions).