Industry gut punch -- The Tesla price drop maintains insane margins

[Jimrpa]

tesla is a public company you can see their financials, you don't need to watch youtube (???) i started watching the first 3 minutes and it's one guy doing a weird thing with his hands and them showing you binders of paper

https://www.sec.gov/Archives/edgar/...a-20211231.htm#management_discussion_analysis

that's 2021, it clearly tells you the gross margins of tesla's automotive segment is 29%.

reducing price drops straight down to profit, so if their margins were 29% before and they lowered their price by 10%, their margin is now 19%.

Sorry, it doesn’t work quite that way. Stop for a moment and consider Cost of Goods Sold. I’ll leave the solution as an exercise for the student

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[Jimrpa]

I think these are 2021 data:
Industry average was 10.85%.

I would suggest citing sources when publishing data like this. It’s usually helpful for reference.

 

[HGxxx]

Well I watched that Munro video and I think he missed something, why would Tesla drop the price?? Because they are being challenged. Forget about the margins as Tesla will have better margin than most because their product is monotonous and people think de contenting is luxury

 

[RedOctobrrr]

Yeah but who wants to drive an electric econo-shitbox? which is what Tesla will be in 5 years

If it goes 0-60 in 1.9 seconds while one of the largest auto manufacturers in the world can't make an EV that goes fast for more than 5 seconds? Yeah I'm still down for a mind-numbingly fast Tesla.

The Model Y Performance absolutely destroys the Mach E GTPE for $20k less.

 

[Logal727]

If it goes 0-60 in 1.9 seconds while one of the largest auto manufacturers in the world can't make an EV that goes fast for more than 5 seconds? Yeah I'm still down for a mind-numbingly fast Tesla.

The Model Y Performance absolutely destroys the Mach E GTPE for $20k less.

Who cares about acceleration? Looks like shit drives fast, wow, whoop de doo

 

[RedOctobrrr]

Who cares about acceleration?

 

[Hammered]

Well I watched that Munro video and I think he missed something, why would Tesla drop the price?? Because they are being challenged. Forget about the margins as Tesla will have better margin than most because their product is monotonous and people think de contenting is luxury

They dropped the price one because of incentives via tax rebates, and to crush the competition. It's like stomping a beaten opponent.

I would suggest citing sources when publishing data like this. It’s usually helpful for reference.

Yeah, most people don't understand business. Around some parts, people miss most things. They can't understand that ford selling a 60k vehicle that cost them 56k in parts / labor / marketing to build and tesla selling a 60k car that cost them 41k in parts / labor / marketing aren't even close in terms of sustainable.

Ford's sales for the last 5 years

vs tesla's

When margins are nice and fat, you get exponential growth if you desire. Or really, with that much cash flow you can do just about anything you want. Tesla is printing money even though they look like catfish.

 

[Hammered]

Who cares about acceleration? Looks like shit drives fast, wow, whoop de doo

Most people do, especially with traffic. Having a vehicle that you can slip into just about anywhere allows for safer operation. It's safe to say people who go for mopeds don't really care for acceleration.

 

[Logal727]

Most people do, especially with traffic. Having a vehicle that you can slip into just about anywhere allows for safer operation. It's safe to say people who go for mopeds don't really care for acceleration.

Oh yeah stuck in my MME 4X not being able to accelerate lol. Get out of here.

 

[Hammered]

Oh yeah stuck in my MME 4X not being able to accelerate lol. Get out of here.

You're questioning who likes it... not me. I beat on my pe like it owes me money

PS: my truck is faster than your 4x (granted it's almost faster than the pe)

 

[Logal727]

my truck is faster than your 4x

Who cares? Lol

 

[Maquis]

I would suggest citing sources when publishing data like this. It’s usually helpful for reference.

Good point.

https://companiesmarketcap.com/automakers/automakers-ranked-by-operating-margin/

 

[Billyk24]

Idra's massive presses and the molds have higher upfront costs, but they're able to mold an entire section of the vehicle in seconds. The end goal is to 1-shot the entire vehicle frame, and with cyber truck, the entire vehicle body is the frame (sans doors, obviously). That not only removes several steps, raw goods are brought in as efficiently as possible. 1 tool, 1 machine, replacing up to 30-40 other machines from stamping / forming, to welding. Each individual part has at least 2 steps to its creation, then it's joined with dozens of other parts (and their steps), welded, etc... The model Y's rear end went from 70 discrete parts to a single diecast part.

That's not only highly inefficient, each step opens the door up to tolerance deviation. If several segmented parts that rely on the one before it are joined just a little bit off from the previous, the final product could end up well out of tolerance due to compounding deviation. Tesla started out doing things like traditional OEMs and then quickly moved into molding parts. In one step they reduced that part's cost to a fraction of the previous process while simultaneously achieving the best tolerance possible, all in one step.

Other companies have since been scrambling to jump onboard with it because it's the most cost effective way in both time and money to do it. Idra's order backlog is several years now for these presses. Someone wanting to get in on the process now wouldn't have a vehicle with the parts for a good 5 years from now.

Also makes minor fender benders almost impossible to repair.

 

[tdmeng]

Who cares about acceleration?

Enough people that buy the GT and are upset at the 5 sec gray bars. Otherwise, Ford would only need to sell the Premium AWD.

If acceleration didn't matter, the Audi Q4 would be a direct competitor, and Ford wouldn't have attached the Mustang name to the MME.

 

[67mustang]

I'm a 1 driver household with 3 Fords, and the tax rebate wasn't a consideration for my purchasing as I wouldn't qualify. I'm likely buying a 4th here in a few months. I can both enjoy and like my Ford products, while also seeing the writing on the wall.

What writing on the wall? That Tesla is cheaper? Sure, for now. So they make a bigger profit on their sales, big whoop. They sell one type of vehicle, EVs. If EV sales take a nosedive, so does Tesla and their profits. Ford makes more than just EVs, You think Ford is going to be going out of business or something because their EVs aren't selling like hotcakes?

"The writing on the wall" is such a dumb take.

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