Yeah, that's normal for startups, they are made profitable (not "become profitable", this is not a process but a deliberate choice) after the growth phase, not during or, in case of Tesla, before it (as you pointed out, they still sell low amounts of cars). Tesla is in process of building their first factories and learning and developing the production, that costs money - money that other car makers have already paid off, but they paid it and their stocks looked just like Tesla at that time. Actually, it is incredible how good margins Tesla has given their stage as a carmaker, and it's a miracle they are profitable at all.

See this HN comment: https://news.ycombinator.com/item?id=25118086

Tesla needs its years too. And it's looking good so far.

> the profits ($331M) are lower than the regulatory credits ($397M)

Correction. They made $874 million in profits in Q3 out of which ~$543M came out as stock-based compensation for Musk (a non-cash expense but has to be reported on GAAP-profit line). This is unusually high and is due to the recent run-up in stock price.

They were definitely significantly profitable net of regulatory credits in Q3. Their automotive gross-margin in Q3 was ~23% excluding regulatory credits. Such margins are unheard of in the auto industry.

Tesla had to manufacture and sell $7.6B in cars to qualify for those credits. As such the credits boosted their gross margin from 23.6 to 27.7%.

The credit revenue will continue as long as competitors continue to sell their polluting ICE vehicles which need EV offsets. And after factoring in credit revenue, Tesla will continue to aim for marginal profits just above break-even while investing as much as possible back into growth.

Their cars generate an industry leading margin even without the credits. So if the question is, could Tesla be profitable without that $397mm the answer is obviously Yes, by spending $397mm less on future growth.

Last year Toyota Motors EVP in North America said, “This is going to be a slow evolution in the U.S. market, unlike in China and Europe where there are government regulations. Nobody is selling electric vehicles at a profitable margin.”

The statement was wrong when he said it, but even more wrong now. EV is clearly a disruptive technology that is poised to become superior in every possible metric for passenger cars, and even short-haul trucking.

Honestly it’s past the time for harping on the “Tesla is structurally unprofitable” trope — I think it’s just willful blindness at this point.