The Ford F150 makes a gross profit margin of $10,000 to $13,000/vehicle. It sells 800,000 F150s each year, for a profit of $8 billion or more on just the F150s. By the way, F150s sell for about the same as the Model 3.
Porsche has gross margins of $18,000 to $23,000 on its vehicles, which are comparably priced to Tesla's other models.
Really, if you drill down into the actual numbers, you'll see that Tesla isn't significantly more profitable than other car makers on a per-vehicle basis, and they're certainly not wildly more profitable.
With the Model 3, Tesla needs to scale up just be in the black. It would need to sell somewhere on the order of several hundred thousand Model 3s each year to approach the per-vehicle gross margins of the Camry, and more than a million Model 3s each year to achieve the gross margins of the F150. Unless they drastically improve quality control, that's simply not happening.
“In North America, Ford had a record operating margin of 12.9 percent. This compares with rival General Motors' first-quarter operating profit margin of 8.7 percent, and Fiat Chrysler Automobiles's 7.2 percent in North America.”
Are you seriously comparing the operating margins of profitable companies to a company that has yet to make a profit based on its operating activities? (Selling credits doesn't count, that's a one-time stunt.)
The numbers for Ford, GM, and Fiat Chrysler include all of their global activities, including their sales of lower-margin cars, compliance cars (i.e., no-margin or negative-margin vehicles, massive R&D, international operations, etc.). You are literally trying to compare the gross margin on a single Tesla model to the overall operating margins of entire companies...that's not even apples to oranges. That's comparing apples to zucchinis.
I'm making observations with all publicly available information I can get my hands on.
I'm not saying Tesla's margins are 30%. I am saying that if they're able to attain their production goals, it's likely they will hit their target margin, which are above legacy automakers.
“So how does Tesla actually do on a per-vehicle basis? To that, we turn to the quarterly reports. Before Model 3 production became significant — aka, just S and X sales — Tesla was earning a 25% non-GAAP margin / 27,9% GAAP margin in their automotive division. These are very healthy margins. As Model 3 production ramped up — and famously encountered difficulty — Tesla’s gross margins fell, bottoming out at 13,8% non-GAAP and 18,3% GAAP, before rising back to 18,8% non-GAAP and 19,7% margin.”
And you can't compare these numbers to other car makers, because they include all the lifecycle costs for each car model, including the design, production line spin-up, etc.
If you're an auto startup, computing numbers the Tesla way makes sense: Tesla is growing rapidly and will outgrow its current high fixed costs. If you're an established automaker that's not growing, adding in everything makes sense.
Porsche has gross margins of $18,000 to $23,000 on its vehicles, which are comparably priced to Tesla's other models.
Really, if you drill down into the actual numbers, you'll see that Tesla isn't significantly more profitable than other car makers on a per-vehicle basis, and they're certainly not wildly more profitable.
With the Model 3, Tesla needs to scale up just be in the black. It would need to sell somewhere on the order of several hundred thousand Model 3s each year to approach the per-vehicle gross margins of the Camry, and more than a million Model 3s each year to achieve the gross margins of the F150. Unless they drastically improve quality control, that's simply not happening.