January 31, 2023

Wire Service Canada

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Tesla makes over $15,000 per car

In recent days, the company’s decision caused a sensation among insiders Tesla to “lower” the prices of its most sought-after cars, Form 3 And Y modelby more than 20%, with a discount exceeding 12,000 euros (here news). Many wondered how the American automaker managed to adopt this pricing policy Quite aggressive, even given the current historical period.

According to a recent analysis of ReutersTesla’s “secret” is the high profits it makes on every car sold. According to research, Tesla registered in the third quarter of 2022 Total profit is $15,653 per vehicle, more than twice the Volkswagen Group, four times the Toyota Group and five times the Ford Group. check about production costsTesla has invested heavily in new production technologies, such as the use of the so-called GigaPress, that is, giant presses capable of making one piece, capable of replacing small metal parts.

This is amazing higher profitability So it constitutes Tesla’s “weapon” in the current price war for electric cars. Until a few weeks ago, the company led by Elon Musk had caught up with competitors, sharply raising prices for its most popular models such as the Model Y. Shortages of semiconductors and other materials have caused global auto industry production to decline, “forcing” companies in the sector to focus on new models. Higher margin and solid profits, even with lower sales volumes. But Tesla’s current decision raises questions about this strategy.

Analysts warn that the global electric vehicle market may soon have a head start Production capacity exceeded demand. According to Warren Brown, an industry forecaster, by 2026, demand for electric vehicles in North America will reach a level of nearly 2.8 million vehicles per year. But electric vehicle plants in North America will be able to assemble more than 4.5 million vehicles, which means total capacity utilization will be just under 60 percent.

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in ChinaIn Beijing, ending state subsidies will accelerate the market share war between competitors. in the land of the dragon Xpeng It initially benefited from Tesla’s price hike. But now, due to the current US home policy, Xpeng is also lowering prices in China, but with a smaller financial margin than Tesla. Xpeng, according to my analyst Reutersreported a third-quarter gross income of $4,565 and a net loss of $11,735 per vehicle.

there BYDThe company, the leader in the electric vehicle market in China, announced a price hike from January 1 following Beijing’s decision to phase out subsidies for electric vehicles. Again me margins BYD’s total of $5,456 per vehicle gives more wiggle room in the price war than VW, Toyota or GM.