Somehow, Elon Musk managed to garner pretty good notices from both Tesla’s performance in Q4, unveiled after the market close on January 28, and the vision he detailed in the earnings call that followed. Wall Street analysts generally applauded the numbers as “a beat,” and investors didn’t seem overly disappointed, pushing shares just slightly lower at the open the following day.

Musk’s a bit like a playwright allowed to author a flop, then write the reviews—reviews so glowing that they make the audience forget what a mess they just sat through.

Specifically, the EV-maker’s CEO promises of a big pivot into Cybercabs and autonomous robots poised to set Tesla on a “mission of amazing abundance” succeeded once again in distracting folks and funds from numbers that, when you drill down, look shockingly bad. Tesla posted GAAP net earnings of $3.79 billion, down 75% from the peak of $15 billion for 2023. Why? EV revenues have plummeted 16% over the last two years, while overall operating expenses jumped 44%, blunting strong sales growth in batteries and services such as charging stations, two franchises that are too small to salvage the overall numbers, since combined they’re half the size of the EV side.

Tesla’s also piling on assets, notably for new plants and equipment, that it’s losing money on. While earnings plummeted over the past two years, it’s added $31 billion, or nearly 30%, to the left side of its balance sheet. The more capital intensive Tesla becomes, the less efficiently it’s deploying that capital.

It’s particularly ominous that so much of these paltry profits are flowing not from making and marketing cars and batteries, but via the sales of regulatory credits to other automakers that purchase them to compensate for failing to meet emissions standards, notably in California and the EU. This line item’s been gradually declining, and Musk acknowledges that the bounty will eventually end. Hence, it’s instructive to study just how much Tesla earns excluding this “non-core” item, as well as past, profitable sales of Bitcoin that can’t be counted on in the future.

In 2025, Tesla pocketed $1.45 billion in credits after tax, plus $69 million from the sale of digital assets, for a total of $1.51 billion. That’s almost 40% of its net earnings of $3.79 billion. After subtracting those non-operating items, Tesla booked just $2.28 billion in “bedrock,” repeatable earnings.

The gigantic gulf between Tesla’s valuation and its reported profits has long made it difficult to imagine how Musk could expand earnings fast enough to deliver even decent returns to investors going forward. Using these lower, and more realistic, core figures renders the challenge even greater. At its current market cap of $1.44 trillion, Tesla’s selling at an adjusted PE of 632 ($1.44 trillion divided by $2.28 billion). Palantir, the super-hot supplier of software to the intelligence community, is often cited as the ultimate in over-the-top valuations at a multiple of 353. But Palantir’s got nothing on Tesla. At a “core” multiple that’s 80% higher, Tesla easily beats Palantir for offering minimal pennies in profit for every dollar you’re paying for the shares.

The mountain Tesla must climb to even modestly reward shareholders gets ever steeper, and for a bad reason: Its numbers keep skidding, while its valuation remains stratospheric. As long as Musk gets to keep writing the reviews, and Wall Street and his loyalists keep believing the scene the legend conjures and ignoring what they see in front of them, what increasingly looks like a turkey as a profit-maker may keep doing boffo as stock.