Tesla's $293 Million of Free Cash Flow in Q1 Was an Incredible Year-Over-Year Improvement
High-flying electric vehicle leader Tesla (NASDAQ: TSLA) knocked one out of the park during the first quarter of 2021. Total revenue increased 74% from a year ago, and net income hit a new record of $438 million. However, the usual boost to the headline profitability metric (the sale of regulatory credits) was joined by yet another controversial line item: The sale of Bitcoin (CRYPTO: BTC). Nevertheless, the company's free cash flow operating metric shows this automaker is rapidly approaching a profitable scale even without the aid of any footnotes.
First, let's address the $438 million in net income. Tesla detractors will often point to the company's sale of regulatory credits as being the primary driver of bottom-line profitability. Indeed, at $518 million in the first quarter, the sale of these credits (which Tesla receives from some governments for renewable energy, and which it can sell to other companies that need the credits to offset their carbon footprint) did the heavy pulling once again on the bottom line. As other automakers ramp up their own EV efforts in the coming years, this source of revenue isn't likely to be as lucrative as it is now.
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Source Fool.com
