The exact quote:

"Our vehicle gross margin increased Q2 to Q3. One of the other things I've seen out there is that somehow we achieved these numbers as a result of widespread discounting. That is absolutely false. There were a few discounts but they were few and far between and that has been absolutely shut down to zero. You can see that in the fact that the vehicle profitability increased, even excluding ZEV credits, Q2 to Q3."

I'm guessing this is a bit of misdirection. Outright discounts on the purchase price probably were rare and not supposed to happen, as he says. However, from what I've seen from new buyers in that period, it was nearly universal for Tesla to waive the $1,200 "destination fee," which is effectively a $1,200 discount on the purchase price. They also have a referral program going which gets you $1,000 off, although that's been going for something like a year now and isn't new for Q3. That's a $2,200 total discount on many vehicles, which isn't a whole lot on a car that starts at $66,000, but it's something.

Exactly! There were very few discounts, and they were never sanctioned to begin with. Elon made it clear in that internal email that these were not allowed by Tesla's internal policy. Had nothing to do with this quarter's profitability, as reaffirmed by him in today's earnings call.