Tesla Reports First Profitable Quarter Excluding Regulatory Credits

Most investors in Tesla are probably not expecting to see big profits anytime soon. Instead, they’re focused on the electric vehicle revolution and Tesla’s likely large share the industry profits that will go with its leadership position.

In prior years, Tesla’s reported “profits” actually came from the sale of “regulatory credits” that accrue to the benefit of electric vehicle manufacturers for environmental reasons, and not from Tesla’s actual business. So Tesla investors were both shocked and pleased this week when Tesla revealed a quite large profit even after excluding regulatory credits. Elon Musk likes taking regulators and markets by surprise, and this was a big one.