Thread by @stealthygeek

Thread time. Here's the thing about @Tesla. It's not a car company. Tesla is a company that has to make cars in order to sell its real product: Emissions Credits.

Let me explain. Back in 2012, the EPA put out new, strident emissions standards for new vehicles fleetwide. 1/

Carmakers here in the US who wanted to either build or sell new cars in US soil needed their fleets of mostly ICE vehicles to meet these new standards. Most couldn't, because their engines weren't nearly efficient enough. Some like Toyota and Honda were in better shape... 2/

...because they didn't sell huge SUVs and trucks as their core product line, and were already pushing hard into Hybrid vehicles, if not pure electrics just yet.

Manufacturers who exceeded their fleetwide emissions targets were given "credits" which they could either bank... 3/

...or sell on the open market.

Manufacturers who didn't meet their emissions targets would need to buy these credits in order to remain compliant with the new EPA standards.

Enter Tesla.

Being the only largish all-electric auto manufacturer, Tesla's fleet is emissions free. 4/

So Tesla doesn't ever need to worry about banking their carbon credits to spend in future years if emissions standards become even more strident again. They can take all of the credits they generate and sell 100% of them on the open market to other builders. 5/

And they do. In Q1 of last year, Tesla's entire profit came from selling half a billion dollars of carbon credits to other carmakers.

Which hey, good for them, but in reality it means driving and owning a Tesla hasn't actually reduced global emissions at all. 6/

Because Tesla is basically selling indulgences to other manufacturers so they can continue building and selling fleets of ICE vehicles that don't meet standards, delaying the day the rest of the industry commits to investing in decarbonization. 7/

Stellantis alone, (the European parent company of Chrysler, Dodge, Jeep, and Ram) has bought more than $2.5 billion in carbon credits from Tesla. All those gas guzzling SUVs, trucks, and 800hp musclecars? Thank a Tesla buyer. They literally couldn't exist otherwise. 8/

This is why I say Tesla isn't a car company.

When you buy a Tesla, you're not the only, or even the primary customer. Actual car companies are. Which would help explain why Teslas are notorious for poor build quality. Their fit and finish is abysmal, and there's so little... 9/

...attention or resources paid to service infrastructure when things do go wrong (which is often) that @GM has been quietly servicing and repairing more than 10,000 Teslas at their own service centers over the last year.

You, the buyer, simply aren't a priority for Tesla. 10/10

So hey, buy a car that hasn't actually helped the environment, might catch fire, can't open the rear doors if it does, and funds a cut-rate Bond villain trying to turn Twitter into a Nazi toilet if you want.

Just know what it is you're actually buying. 11/11

Extra innings...

It's entirely possible the plan in Elon's mind was to use the emissions credits to get the legacy manufacturers to pay him for their own extinction. I assume he guessed Tesla would ramp up EV production quickly enough to build an insurmountable lead. 12/

He wanted to corner the EV market and own the future of cars, blocking out the dinosaurs. The ultimate disruption.

But... he couldn't pull it off. His early lead never grew large enough due to production delays and constraints. Now, better EVs are coming from everywhere. 13/

He had one last advantage to play, which was the Tesla charging network. This advantage remains, but he lobbied hard to get the government to fund a nationwide charging network based on Tesla's proprietary plugs and chargers.

Biden refused in favor of universal designs. 14/

Now legacy manufacturers are drastically ramping up newer, better, cheaper EVs in more types and models than Tesla offers, on platforms that aren't already a decade old. Those manufacturers will rely less and less on buying Tesla's credits to remain compliant. Death spiral. 15/15

"But in Q3 of 2022, Tesla's profits..."

Listen, weird nerds and $8 blue checks, I don't care about the 3rd Quarter of this year. I'm talking about the history of the company, its foundations and how it arrived where it is now. Which is a story most people clearly didn't know.

Well, this is still going like stink and my publisher would be mad if I don't take the opportunity to promote something so if you appreciate what I'm doing here, treat us both to a book: amazon.com/gp/product/125…

OMG, this is just too precious.

At no point in the thread am I talking about revenue. I'm talking about profits.

My first "Added context" on any tweet is of course from Elon stans.