Tesla’s financial health has long depended on its ability to sell loads of regulatory credits each quarter. In 1H20, credit sales accounted for all of Tesla’s positive earnings. Things were hardly any better in Q3. $TSLA $TSLAQ

R/T @TESLAcharts

2/ https://twitter.com/TESLAcharts/status/1319661868487761920?source=content_type%3Areact%7Cfirst_level_url%3Aarticle%7Csection%3Amain_content%7Cbutton%3Abody_link
In Q4, Tesla reported $270M in net income, as well as regulatory credit sales to the tune of $401M. Tesla’s net income actually shrank 19% while revenue from credit sales barely budged. Moreover, Tesla’s income tax provision in Q4 amounted to just $83M. $TSLA $TSLAQ

Alas, Tesla will not be able to rely on revenues from credit sales to cover up its operational deficits forever. Indeed, the sun is already beginning to set on the regulatory credit market. $TSLA $TSLAQ

R/T @BradMunchen

6/ https://twitter.com/BradMunchen/status/1360198738191392772
The basic economic force of supply and demand will erode Tesla’s credit business over time. How long it can last is not clear, but even Tesla’s management has acknowledged that the end is in sight. $TSLA $TSLAQ

Tesla booked $1.58 billion in credit sales in 2020, but with the credit market now living on borrowed time, the clock is ticking to find another way to close the gap, like recognizing more deferred FSD revenue. $TSLA $TSLAQ

R/T @DeanSheikh1

8/ https://twitter.com/DeanSheikh1/status/1358874354369523712
Repeated price cuts have certainly not helped matters. In Q4 2019, Tesla recorded $386 million in net income on 112k deliveries, or $3.5k per car sold. In Q4 2020, Tesla recorded $270 million in net income on 180.6k deliveries, or $1.5k per car sold. $TSLA $TSLAQ

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