I thought 1st quarter gross margin was 5% w/o the zev credits. Elon Musk said that that was the average in the quarter, meaning that they started lower and ended higher than the 5% average. I think they're well on their way to 25% by the end of the year. In the conference call Elon shared that it took several months for the gross margin improvements they make to show up materially, meaning that they will have implemented most of their gross margin improvements months ahead of the 4th quarter. This is why Elon is so confident with 25% gross margin by the end of the year... because most of the manufacturing improvements have already been made and it just takes time to realize the increased margins.
I thought I read 5% somewhere, but went and looked it up and saw 2%. Probably depends on how you count it. Either way, that is a huge increase. Musk has a long history of exaggerating, which is what I suspect he's doing here.
