“Tesla didn’t generate a profit by selling sexy cars, but rather by selling sleazy emissions “credits,” mandated by the state of California’s electric vehicle requirements.
” The competition, like Honda, doesn’t have a mass market plug-in to meet the mandate and therefore must buy the credits from Tesla, the only company that does. The bill for last quarter was $68 million.
“Absent this shakedown of potential car buyers, Tesla would have lost $57 million, or $11,400 per car.
“As the company sold 5,000 cars in the quarter, though, $13,600 per car was paid by other manufacturers, who are going to pass at least some of that cost on to buyers of their products.”
True. By the end of this year, when they scale their production and optimize their supply chain, expected gross margins are 25%, that is ~$25,000 per car sold. They are using the emissions credits to bridge them over to more profitable days, which definitely is a good business decision.
They started in 3Q to sell in international markets. That should double or triple the current demand. In the next three years, they are planning to produce a $35,000 car to sell in larger volume. An all American car build without any union labor that is years ahead of it's competition (both domestic and foreign) - a true American success story in the making.