Dude…don’t feed the trolls.
No one, except those at a high executive level at Tesla, knows what’s going on with the price reductions.
Tesla made massive price cuts in 2020/2021 only to raise them later.
And, unless you’re in the market for a Tesla or are a shareholder, why do you really care?
fwiw, I’m a shareholder and I’m completely ambivalent. They’ll figure it out.
You forgot that Ford cut back prices on their Mach-E when Tesla did their first round of cuts.
We had this discussion before, what makes you think they are not profitable with these cuts? Volume and market share equate to something.
I’m basing it on Ford losing billions on EVs but being a perceived threat to Tesla. So Tesla uses their market might to fight back. It’s a predictable response to an entrant to their turf.
Yes GM and Ford can sell cars but if they don’t scale EVs they’ll lose in the long run. Tesla’s pricing to help make that painful. Why is this nonsense?
More then likely just burning cash to take market share. It’s a smart strategy long term as battery tech gets cheaper.
They cut prices once compared to what 5 or 6 from Tesla ?
Starting the year, Tesla profit margin was at 23.67%. For comparison, GM is 13.93% and Ford 14.05%(including their ICE sales). Some EV only companies, Lucid is -138% and Rivian -150%.
Because they can’t lower prices. Ford split off their EV business starting Q1, called Model E. They now report separate financials for EVs and ICE sales.
Q1 results included 2022 EV sales EBIT. Each Ford EV sold in 2022 had a negative 40.6% profit margin.
They simply can’t lower prices…period. Tesla is going for the throat as legacy automakers struggle to scale EV production.
And they are. Big boys sell every EV at a loss. Even including ICE sales, Tesla profit margins are higher.
On the surface Q1 2023 operating margin of 11.4% vs 19.2% in Q1 2022 doesn’t look that great. I believe BMW’s operating margin is around 9%. All the Germans are just getting started in the EV space and already have some cool alternatives to Tesla.
what is this? are you 14 years old?
Does Tesla factor in carbon credit sales revenue into per profit per car? It’s only $1.78 billion in 2022 but it still has a significant effect on overall profitability since the credits don’t cost anything to produce.
And they have made numerous, significant price cuts since these numbers. Their margins after most recent price cuts( 2 of which are excluded in this past quarters numbers) are now worse than legacy OEMs
I haven’t looked. Are you theorizing this, or are you referencing an investor deck?
11.4% for Q1. With latest cuts, it would have to drop further in Q2.
But as others have mentioned, they are gunning for bigger market share. Diluting profit margins for a bigger market share is a time-tested strategy across the board. Tesla has lead in the EV segment (BYD may be bigger now in China I think, or globally, not sure) and can put the other automakers in a quandary by grabbing market share and starving them off selling opportunities.
The legacy manufacturers still seem to be having so many supplies issues that I’m surprised Tesla has jumped the gun so quickly – you would think they would wait until the legacies started flooding the market if this truly was all about market share
It is WAY easier to keep your strong position in the market compared to trying to regain market share after losing it. Your competitors having problems bringing their products to market is an ideal time to capture new sales.
The second largest EV seller in US is Ford, Tesla’s operating margin is more than double of Ford’s last reported quarter.
Ford, GM, Stellantis all transitioning to all electric, all have worse margins including their ICE sales.
EV alone…it is far worse for legacy brands. Ford just split off the EV business, reporting separate financials. Every EV sold in 2022 by Ford had negative 40.6% margin.
Now EPA is trying to kill ICE early with their proposed very restrictive emissions standards starting 2027.
My guess would be that this move may get some to shelve EV capacity expansion or new plants if the EV business unit is too deep in red and a drag on quarterly reports and a drain on available capital. Board and shareholders may revolt.
Basically Musk might be going on an all-out pre-emptive offensive. He said something about Tesla being okay to sell at 0 profit atm.
It’s a sad day when one can’t make money doing BHPH.
Agreed. When they can’t get those 30% APR and underwater loans moving at all it is bad news.
I mean even the prep/detail guys that get the bloodstains out of the trunk got laid off.
