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Note that they are still selling each car at a material loss; and only managed to show a profitable quarter by trading green credits they gained from their manu
by NickM 13y ago
Note that they are still selling each car at a material loss; and only managed to show a profitable quarter by trading green credits they gained from their manufacturing.
I'm not sure that's entirely accurate. I'm looking at their quarterly results for Q1 2013: gross profit was $96.3 million, but the ZEV credit sales were only $67.9 million for the quarter. Unless I'm missing something, it would appear that they are profitable even without taking the ZEV credit sales into account.
- hncommenter13 13y agoI believe you are missing something. "During the first quarter of 2013, we recognized $67.9 million in ZEV sales, which contributed to our gross margin. ZEV credit revenue should decline in future quarters relative to our automotive sales as we grow our sales outside the United States and earn fewer credits on the 60 kWh Model S battery variant for those sales that occur in the United States. Other regulatory credit sales recognized during the first quarter of 2013 were $17.1 million." (1Q2013 10Q, p. 22). $67.9 + 17.1 = $85M in revenue from ZEV + other regulatory credits. Presuming these credits have a nominal cost-I would imagine they're almost 100% margin, given that they're pieces of paper--that leaves $96.3 - 85 = $11.3M in gross profit from selling cars.
- NickM 13y agoAh, good catch! I did miss that note about the $17.1 million. Also, the $11.3M is partly from other stuff - selling drivetrains for the RAV4 EV, selling apparel, etc - not just selling cars. However, it would seem my main point still stands: it's not accurate to say Tesla wouldn't be profitable without the ability to sell energy credits.