Musk is a bit like a playwright who allows the author a flop, then writes reviews—reviews that are so glowing that they make the audience forget what a mess they’ve been through.

Specifically, the EV-maker’s CEO promises the a big pivot to Cybercabs and autonomous robots that are ready to be set Tesla on a “mission of extraordinary abundance” succeeded once again in distracting people and funds from numbers that, when you drill down, don’t look good. Tesla posted GAAP net income of $3.79 billion, down 75% from the peak of $15 billion for 2023. Why? EV revenues fell by 16% in the last two years, while total operating costs jumped by 44%, slowing down the strong growth in sales of batteries and services such as charging stations, two franchises that are too small to save the overall numbers, because when combined they are half the size of the EV side.

Tesla has also been accumulating assets, especially for new plants and equipment, which has been losing money. While revenue has declined over the past two years, it has added $31 billion, or nearly 30%, to the left side of its balance sheet. The more capital intensive Tesla becomes, the less efficient is the deployment of that capital.

It is particularly alarming that most of this small profit flows not from the production and sale of cars and batteries, but through the sale of regulatory credits to other manufacturers who buy them to compensate for the failure to meet emission standards, especially in California and the EU. This line item is gradually decreasing, and Musk acknowledges that the bounty will eventually expire. Therefore, it is instructive to study how much Tesla earns outside of this “non-core” item, as well as the past, profitable Bitcoin sales that cannot be counted in the future.

In 2025, Tesla pockets $1.45 billion in after-tax credits, plus $69 million from the sale of digital assets, for a total of $1.51 billion. That’s roughly 40% of his net income of $3.79 billion. After deducting non-operating items, Tesla booked just $2.28 billion in “bedrock,” recurring revenue.

The large gulf between Tesla’s valuation and its reported earnings has long made it difficult to imagine how Musk could expand earnings sufficiently to provide even decent returns to investors in the future. Using these lower, and more realistic, core numbers makes the challenge even greater. At a current market cap of $1.44 trillion, Tesla trades at an adjusted PE of 632 ($1.44 trillion divided by $2.28 billion). Palantir, the hottest software supplier in the intelligence community, is often quoted as having the highest over-the-top valuations at a multiple of 353. But Palantir has nothing on Tesla. At a “core” multiple that’s 80% higher, Tesla easily beats Palantir for offering less revenue for every dollar you pay for shares.

The mountain Tesla must climb to even modestly reward shareholders is much higher, and for a bad reason: Its numbers keep skidding, while its valuation remains stratospheric. As long as Musk continues to write reviews, and Wall Street and his loyalists continue to believe in the spectacle that the legend conjures up and ignore what they see in front of them, what looks like a turkey as a profit may continue to make boffo as stock.