This doesn&#x27;t give a completely accurate picture of Tesla&#x27;s financial situation. Tesla has MASSIVE capital expenditures and will continue to have so for years. They could probably become quite profitable on a quarter-to-quarter basis by stopping all new development and manufacturing investments, but this would kill their possibility of becoming a major auto manufacturer.<p>The gross margin on Model S is indeed 25%, and the gross margin on Model X is also expected to exceed 25% once volume production is finished ramping up.