Yes, Tesla's profitability is an entirely different discussion, and IMHO one that really isn't all that relevant to how it will compete with MB, VW, etc. over the next few years.
Profitability is relevant to how Tesla will do anything, including but not limited to competing with incumbent auto manufacturers, absent an infinite supply of undemanding capital.
More importantly, the legacy automakers are loosing far more money on the sales of their EV than Tesla. They can't expect to margin of their gas-guzzlers to subsidies their losses on EV for long.