When we talk markets, Tesla is unavoidable. So this time I’m keeping it clean: facts only, and how to read them. No predictions, no vibes—just what the company already published (quarterly update PDF, 10-Q, and the production/delivery press release), translated into plain language.
Here’s the big picture: auto margins are under pressure, energy margins are doing the heavy lifting. In the quarterly update, Tesla spells out that auto margins are squeezed by price/mix and lower regulatory credits. Meanwhile, energy (Megapack/Powerwall) keeps posting record deployments, with margins that are relatively steady. In the latest operating update, deliveries exceeded production, which usually signals inventory drawdown—my read: a healthier balance between demand and price. The 10-Q also shows a thick cash cushion (with higher R&D) and steady growth in repeat-revenue lines like Supercharging and service. In short: while auto margins are soft, energy and services are the shock absorbers.
Policy and pricing are the gravity in the near term. U.S. regulatory credits look set to decline, and margin commentary keeps referencing credits coming down. Tesla’s tactical response has been Standard (lower-priced) trims—pulling in demand with lower entry prices. Naturally, ASP comes down and the margin debate gets louder. The question is simple: does the volume effect from lower prices offset the drop in ASP and credits? No need to argue online—the next quarter’s numbers will answer.
So this is how I track Tesla—no forecasts, just a checklist:
- Automotive gross margin (especially ex-credits) trend
You can follow this straight from the tables in the quarterly update/10-Q. A bottoming pattern will show up here first. - ASP vs. deliveries (volume) trade-off
After the Standard trims, do deliveries keep outpacing production—and can volume hold without constant discounting? One page of the quarterly press release gives you this. - Energy deployments (GWh) and margin durability
If energy keeps compounding deployments while holding ~30% margins, it stabilizes the whole P&L while auto recalibrates. - Regulatory credit line
Watch how that revenue line steps down each quarter and what the MD&A says about pricing, cost, and mix as offsets. - Cash, capex, and R&D rhythm
There’s a sizable cash buffer. The key is whether Tesla can keep funding plants/AI/autonomy from strength. If cash dips, check whether it’s investment spend or operating drag.
All five are fully visible in the tables and footnotes Tesla already publishes. The best part: the answer refreshes every quarter. If auto margin bases, energy keeps stacking, and credit runoff doesn’t blow a hole in profitability, the filings will prove it. If not—the filings will prove that, too.
Bottom line? With Tesla right now, focus less on “story,” more on structure. Auto is pressured; energy + services are the counterweight; pricing cuts trade near-term margin for reach; ops need to earn back the spread with volume and execution. I’ll keep watching five boxes: margin, volume, energy, credits, cash. When those boxes flip green, the turnaround is self-evident. Until then, the tables are more honest than the takes.