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The question is: if a car sale in the US makes $X margin, but a car sale in the UK makes $Y margin, and X>Y, why are they selling the car in the UK in the first place?

Not only are they making less money on the sale, but they face higher costs even just getting the car to the UK, meaning that the effective margin on the international is even lower.



Why would you think the UK margin is lower than the US one? When Tesla expands in a new market, they start with the high margin top of the line models, so the margin should be rather higher. Also they have a large backlog in markets that have not been sold to, so they try to roughly equalize backlog across markets.


> why are they selling the car in the UK in the first place?

Pure uninformed speculation, but it seems to me like its about sales pipeline and leveraging momentum. It doesn't make sense for them to fully pump the US dry before then expanding into other major international markets. You want to be entering a new large market on an upswing, not on a downswing. Also, waiting would give a lot of space for other international automakers to catch up in their local markets, since people are increasingly interested in buying EVs today


Because margin is margin, and establishing a market in Europe is crucial to staying ahead of the EV game.


Lots of good reasons:

Restricted supply of hot product leads to greater demand and froth... see Tickle me Elmo, early model iPhones, etc. Hype is gold for new products.

Markets that never get demand met will eventually wither as alternatives arrive and resentment grows.

Establish distribution channels early at low volumes, fix the bugs, then scale at maximum profitability.


US have just reduced their tax breaks on Teslas by half, and are going to remove them completely soon. Meanwhile, in Europe more countries decide to subsidize electric vehicles, so European sales might actually have higher margins.




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