Tesla has appeared in a JD Power Initial Quality Study for the first time, and it doesn’t look good for the electric car maker — although the story is more complex than it sounds. JD Power ranked Tesla last out of 32 brands operating in the US, with 250 problems per 100 vehicles. The top brands, Dodge and Kia, had ‘just’ 136 problems. Tesla wasn’t officially participating in the study as it doesn’t grant permission to survey owners in 15 states where it’s required, but JD Power collected enough surveys (about 1,250) from other states to produce a score.

That’s not a sterling result, but the numbers don’t say everything. JD Power automotive president Doug Betts told CNBC that Tesla’s issues were mostly related to production-related issues like body panel gaps, paint flaws and squeaks. For contrast, nearly a quarter of all automakers’ problems stemmed from infotainment issues like touchscreens, phone connectivity and built-in navigation. Tesla vehicles may have more issues, then, but they’re less likely to be ones that affect the basic functionality of the car.

That said, the loss was hardly unexpected: In its first-quarter update, Tesla made it clear that while the company should become cash-flow positive later this year, short-term losses were inevitable. Bear in mind, the company said that just after it posted a quarterly net loss of more than $700 million, so the $406 million Tesla lost this time around seems relatively more palatable. That Tesla is significantly narrowing its losses is a good sign, though, especially when you consider that — prior to this quarter — the company struggled to actually deliver its vehicles to key markets like Europe and China.

Looking longer-term, though, Tesla is still confident that it can become fully profitable in the second half of the year, and that it can deliver between 360,000 and 400,000 vehicles by year’s end. That last bit might seem a little more questionable considering Tesla’s current sales velocity, but the fact that it’s gearing up to start producing the popular Model 3 in China could be a big help. Less helpful is the fact that, as of July 1st, the tax credit for buying a Tesla has dipped again. Would-be Tesla owners are now only eligible for $1,875 in federal tax credits, though individual states often have their own incentives for electric car purchases. (In Colorado, for instance, you can claim a $5,000 tax credit for buying an electric vehicle.)

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The fact that the state burned through the funds so quickly speaks to the growing popularity of EVs and plug-in hybrids. The number of EVs registered in Maryland reportedly doubled from 2017 to 2018, and it reached more than 18,000 in February. Maryland has a goal to register 300,000 EVs by 2025, and it doubled its funding for the 2019 EV tax credits. But a backlog of applicants from the previous fiscal year meant that all of the money for 2019 was spoken for before July 1st. Unless the state can come up with more funding, it’s likely a similar scenario will play out next year, too.

EV owners are still eligible for federal tax credits, but those aren’t a guarantee, either. The Trump administration has toyed with slashing the incentives (up to $7,500 on the purchase of a new EV) from the 2020 budget. As EV sales continue to increase and funds for tax credits dry up, states might have to get creative and look toward incentives like fast charging and low power rates.

Production of the Fortwo in North America is expected to come to an end in June, but the Smart brand will continue on elsewhere. Daimler has an agreement in place to start selling its all-electric vehicles in China and will build a new factory in the country to produce the cars. Sales in the country are expected to start in 2022. While it won’t be available from dealers, it does appear the Fortwo will remain a presence in the US as part of Daimler’s recently rebranded car-sharing service Share Now.

Despite its unique look and size, Smart just never really caught on in the US. The brand launched in 1998 but didn’t make its way to North America until it debuted in Canada in 2004 and finally trickled to America in 2008. Other electric cars with more seating, better range and competitive pricing made it difficult for Daimler’s vehicles and their novel look to gain much traction.