I think the key is I think the law is largely well thought out in this space if often poorly implemented. There is a balance between exerting control over markets and letting markets run rough shod over us. Not every practice that’s distasteful need be controlled nor every whim fulfilled. Loss leading is a way for monopolies to be broken too - imagine a world where Tesla is well established with super chargers everywhere and has become complacent. It’s fat and inefficient, doesn’t use the best tech anymore, and rests on its market dominance. Startups just get crushed under foot. You could do some sort of antitrust thing then but that doesn’t ensure competitiveness. See Netscape vs MSFT, the action was way too late to be effective. It wasn’t until another adjacent company with a huge war chest loss led their way into the browser market that internet explorers illegally monopoly was actually broken up.

So in the Tesla case, imagine now CATL sees an opportunity to leverage their battery dominance to enter the charger network business. If they don’t loss lead they face insurmountable penetration challenges even with superior technology that integrates better with their batteries. The capital and operational overhang is too great to immediately be profitable with a starting from 0% market share. The margins would have to start at infinity and work down as share grows to not loss lead. No one would pay a near infinite amount of money to charge their car. So A way to gain market share quickly would be to subsidize the bootstrap of their market share by pricing way under the cost covering margin required, and probably one that’s much lower than Tesla and is more in line with their at scale margin in the future if they’re successful.

Is that fair? Maybe not in some very strict sense of the word. Does the same technique work in less established markets? Absolutely. What do you think startups are doing with VC money? Are the financiers of startups adorable small business owners trying to make it in a tough world of hard nosed business so deserve special carve outs? Because they’re the ones subsidizing the loss leading startups do to establish themselves. The startups are just the workers, the capital is coming from ugly megawealthy folks with near monopolistic control over capital deciding who wins and loses, seeking to create more and more monopolies from the winnings of their prior monopolies.

Edit: on Tesla’s efficiencies I actually wouldn’t be too surprised if their relative cost covering margin is closer to 5x than not. However, expansion requires enormous capital investment and charging networks even at maximized margins can’t compare to return on investment to car sales. It’s an enabler for car sales scale, and a rising tide for EV lifts all boats. Every car maker wants to sell cars before charging services for that reason. So if they have $10 of capital for car making or $10 for charging infrastructure the cars get the money. So why does Tesla want the government to subsidize capital investment? Because they would rather deploy their earned and fundraising capital on their core business. The government wants the infrastructure and frankly other car makers want it too. Tesla takes operational risk, covers a non trivial amount of the capital commitment, and everyone gets the charger infrastructure we need in the present. The optimization of the competitive market would come later - once there’s a market to optimize. Frankly at a certain point Tesla would almost certainly spin off their charger network as it become a commodity and a capital distraction. Other car makers might compete then when their margins in cars are saturated, but I would put my money on gas station chains and oil companies deciding to get out of the age of fire and getting with fundamental forces and maxwells equations.