Remove the subsidies, and you amputate Tesla's profit. Tesla's Musk states that some of the direct subsidies are expected to decline, albeit while Tesla's gross margin is anticipated to increase to 25%. Another factor that shouldn't be forgotten is the tax credits buyers currently receive.
If Tesla is left to stand on its own in the free market and without the support of central planners spending other people's money, it may never become profitable. With budget deficits at the state and federal level increasingly becoming the subject of debate, Tesla investors may quickly find out how fast and how far Tesla can travel under its own power.
At the time of publication, Weinstein held no positions in stocks mentioned.
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