Does tesla stocks benefit from government subsidies?

**Tesla's stock does not significantly benefit from government subsidies.** Here's the analysis to support this conclusion: 1. **Subsidies are not the primary driver of Tesla's success**: According to Tom Lee from Fundstrat, Tesla's "magical alchemy" is not due to government subsidies, but rather a combination of engineering talent, manufacturing expertise, leading AI and software, leadership, and massive datasets. 2. **Tesla's growth is largely self-funded**: Tesla has been able to fund its growth through its own cash flows and capital markets activities, rather than relying heavily on government subsidies. For example, Tesla's 2024 profit of $7.1 billion included $2.8 billion from trading "regulatory credits," but these were not the sole source of its funding. 3. **Subsidies account for a small portion of Tesla's revenue**: While subsidies do provide a boost to Tesla's revenue, they constitute only a small percentage of the company's overall sales. For instance, in 2024, subsidies accounted for about 38% of Tesla's profits, but this does not translate to a majority of its revenue. 4. **Tesla's business model is resilient to subsidy reductions**: Despite the potential impact of subsidy reductions, Tesla has managed to maintain its profitability and growth trajectory. This suggests that the company's business model is not overly dependent on government support. 5. **Investor sentiment is less influenced by subsidies**: Investor sentiment and stock prices are more influenced by factors such as leadership, product innovation, and long-term contracts (like the one with Samsung for AI chips) than by government subsidies. In conclusion, while government subsidies have been a part of Tesla's financial landscape, they are not the primary driver of the company's success or its stock performance. Tesla's benefits from subsidies are relatively small, and the company's growth and profitability are largely self-funded.