Comment on Elon Musk demands another huge payday from Tesla
partial_accumen@lemmy.world 10 months agoand no one can explain how it is actually profitable.
Hang on a sec, its publicly trade company. Its pretty easy to see how its profitable especially compared to other legacy automakers.
Tesla vs Ford numbers:
On the other hand, “let’s look at Tesla and the Model 3. Tesla is aiming for 25% gross margin on the Model 3 and mid-teens profit margin (let’s say 14%). The average price of the Model 3 is projected at around $42,000… [so] the average gross margin on a Model 3 would be $10,500 and profit margin would be $5,880. Compared to Ford’s average vehicle profit margin of $1,100, the Model 3 would be 5x as profitable.” source
Disclaimer: the source is from March of 2023 and Tesla has cut prices (which means less profit) since then, but they had a lot of room to do so with so much profit per car.
So one could say that Tesla has been able to charge a premium for a cheaper car, or they’ve been able to reduce manufacturing cost for a moderately priced car. Both result in high margin returns for the company.
Hypx@kbin.social 10 months ago
They have a direct sales model which is more expensive to operate and exaggerates profit margin. There’s also reason to believe they are wildly understating warranty costs plus ignoring R&D costs. People who look closely have consistently concluded that Tesla cannot really be making money, or have very narrow profit margins at best.
Huge price cuts will compound these problems dramatically.
partial_accumen@lemmy.world 10 months ago
How would adding a middleman that also has to make profit make the company earn less? Wouldn’t direct sales allow Tesla to sell for a higher price because they can sell at retail instead of a “wholesale” cost normally sold to a dealership?
I’d be interested in reading more on this assertion. Do you have a source you can point me to?
Hypx@kbin.social 10 months ago
You have to build the entire system out yourself. That costs a lot of money. The dealership model also costs the manufacturer basically zero dollars, because it really profits on used car sales and maintenance works. You don't make anymore money by having your own dealerships. The whole argument that there's some secret behind Tesla's business smacks of gaslighting, not something that actually holds up to reason.
It's been a long standing issue with Tesla's accounting. No one can really explain how profits are actually being generated, especially considering everyone in the West is losing money on EVs. It's also being ran entirely by sycophants and people with minimal qualifications, with zero accountability anywhere. So it just seems, via Occam's razor, that they're cooking the books.
partial_accumen@lemmy.world 10 months ago
The manufacturer also has to pay dealerships for warranty work on vehicles. Company owned services centers wouldn’t.
I’m interested in that source you talked about the “people who looked closely”.
rsuri@lemmy.world 10 months ago
Not OP but regarding sources, there’s a community referred to as “TSLAQ” (Q referring to a letter typically added to bankrupt stock symbols) that’s been critical of TSLA’s accounting practices. See: en.wikipedia.org/wiki/Criticism_of_Tesla,_Inc.#Ac…
wikibot@lemmy.world [bot] 10 months ago
Here’s the section for the wikipedia article you mentioned in your comment:
= In 2017, a lawsuit alleged Tesla made materially false and misleading statements regarding its preparedness to produce Model 3 cars. The U. S. Department of Justice also began an investigation in 2018 into whether Tesla misled investors and misstated production figures about the Model 3. The lawsuit was dismissed in Tesla’s favor in March 2019.
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