
The Tesla Model 3 cost $28,000 to build - prostoalex
https://qz.com/1294282/the-tesla-model-3-cost-28000-to-build-german-engineers-say-and-it-still-may-not-be-profitable/
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dawnerd
Previous:
[https://news.ycombinator.com/item?id=17198517](https://news.ycombinator.com/item?id=17198517)

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notenoughstuff
If anyone else were constantly writing one-sided articles on a product or
company, with referral links in their signature, they'd be down-voted like
crazy. Yet Electrek repeatedly makes the front page.

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ajross
> The margins on the Model 3 must still pay for a cost structure that legacy
> carmakers don’t have, including planned factory expansions, new automation
> investments [...]

What kind of voodoo accounting theory is this? No, R&D costs don't "have to"
be covered by profit, they're bets against future earnings. That's the whole
notion behind the idea of "investment" securities, the stock market, venture
finance, corporate bond sales...

I mean, it's possible to do an analysis such that the margin, expected sales
growth and reasonable efficiency improvements combine to a product that's a
net loss. It happens. But this isn't it.

The numbers as they are say the Model 3 is a profitable car (assuming they can
get production ramped, of course).

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xkjkls
It depends on what is thrown into R&D costs. For improvements and maintenance
to current production lines, that would traditionally be considered as part of
the gross margin. Though research into completely new production lines would
not.

Tesla classifies both as R&D and doesn't include them as part of their gross
margins.

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pboutros
I'd love to see some analysis of the comment section of articles like this.
Would be interesting to quantify the #ProtectElon brigade a little bit.

~~~
newnewpdro
What proportion of HN readers hold TSLA stock...

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clon
I am going to wait for the Sandy Munro figures.

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tejohnso
For those who are unfamiliar with Munro, have a look at the build quality
discussion he had here
[https://www.youtube.com/watch?v=CpCrkO1x-Qo](https://www.youtube.com/watch?v=CpCrkO1x-Qo)

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cryptoz
The headline takes some random person's conjecture and displays it as if it
were a fact. Not to mention, it takes a pretty-sounding number and makes a
small nice soundbite out of it, despite being nearly meaningless. You can't
infer Tesla's profit margin from this, and you also can't trust the number
next week as so much is changing so rapidly that it hardly matters.

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meritt
Elon retweeted [1] the underlying article with the statement: "Best analysis
of Model 3 to date". He also acknowledged [2] that $28,000 is a reasonable
cost estimate once they reach scale.

Try doing a little bit of research before dismissing an article that simply
doesn't happen to fit within your worldview

[1]
[https://twitter.com/elonmusk/status/1002270980755013632](https://twitter.com/elonmusk/status/1002270980755013632)

[2]
[https://twitter.com/FredericLambert/status/10022714993598423...](https://twitter.com/FredericLambert/status/1002271499359842304)

~~~
hinkley
There's a lot of assumptions buried in that statement. Once they reach scale,
sure, but they also raised $1.26 billion to manufacture the Tesla 3. That's
going to take a lot of cars to amortize out the cost of the production
pipeline, and R&D.

These production cost numbers remind me of bad graphs. I'm always left
wondering if the author really meant them to be informative and accurate, or
just wanted to rabble rouse.

A Tesla 3 doesn't cost $28,000 to make. It _contains $28,000 worth of parts
and labor_. Just like my sandwich doesn't cost $1 to make. That's only true if
I ignore the waste materials, kitchen, lights, cleaning supplies, house,
neighborhood and city I bought into in order to enjoy the privilege of making
my own sandwich in peace and quiet. Just standing in my kitchen that long cost
me 6 cents in property taxes, for instance.

