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.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV