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Tesla (TSLA) achieved 29.2% automotive margins without tax credits in Q4 2021

Even without a federal tax credit incentive, Tesla still appears to be doing well.

Ozzie Mejia

January 26, 2022 1:40 PM

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Tesla (TSLA) has posted an impressive quarter to end its fiscal year. What may be most eye-opening about its latest numbers is that the company managed to achieve 29.2 percent of its automotive margins without any sort of tax credit incentive.

Recall that the Tesla vehicles are no longer eligible for federal tax credits, largely as a result of the company's early success. In spite of the loss of that incentive, Tesla's sales have not slowed down. In fact, the opposite appears to be true, with Tesla's sales numbers doing better than before.

Here's an excerpt from today's Q4 2021 earnings report.

2021 was a breakthrough year for Tesla. There should no longer be doubt about the viability and profitability of electric vehicles. With our deliveries up 87% in 2021, we achieved the highest quarterly operating margin among all volume OEMs, based on the latest available data(2), demonstrating that EVs can be more profitable than combustion engine vehicles.

Additionally, we generated $5.5B of GAAP net income and $5.0B of free cash flow in 2021 – after spending $6.5B to build out new factories and on other capital expenditures.

Tesla will seek to ramp up production through its Austin and Berlin factories, though the company previously admitted to facing supply chain-related challenges.

We'll have more on Tesla's Q4 2021 earnings throughout the day. Be sure to check on our Tesla topic page for the latest updates.

Ozzie Mejia

Senior Editor

Ozzie has been playing video games since picking up his first NES controller at age 5. He has been into games ever since, only briefly stepping away during his college years. But he was pulled back in after spending years in QA circles for both THQ and Activision, mostly spending time helping to push forward the Guitar Hero series at its peak. Ozzie has become a big fan of platformers, puzzle games, shooters, and RPGs, just to name a few genres, but he’s also a huge sucker for anything with a good, compelling narrative behind it. Because what are video games if you can't enjoy a good story with a fresh Cherry Coke?