[11thEarlOfMar]

The biggest news in this release is gross margin.

Gross Margin Jumped from 26.7% in Q2 to 33.2% in Q3.

For reference, MRQ,

GM gross margin: 13.9%

Toyota: 23.6%

VW: 19.9%

Granted, those are not luxury auto makers, but Tesla is more profitable on a gross margin basis. That margin fuels everything from cash flow to R&D spending. 33% for an automaker is huge.

[vvanders]

Yup, and as battery prices drop those margins are going to get even better(although I doubt we'll see the same level on the Model 3).

[ams6110]

Only if they can sustain prices as competition comes online from other makers.

[_ea1k]

It is going to take about 3 years for competition to reach where Tesla is right now with regards to range and charging networks.

[gniv]

Charging networks maybe, but range no. The Chevy Bolt that will start selling in a couple of months has 238 miles range.

GM doesn't have the superchargers, but they can afford to price these cars with zero profit for a while, if they want to undercut Tesla.

[_ea1k]

My point was that the two are important together. A 240 mile range without a supercharger network is still a car that will not be particularly useful for a long trip (2+ hour drive).

[nartsbtaa]

But who would drive a Chevy Bolt if they could drive a Tesla? Even if the Bolt is a better car, Tesla has the better brand name for now.

[ceterum_censeo]

Is the federal EV tax credit a component of the margin calculations?

[danhak]

No, the EV tax credit never goes to Tesla it goes to the consumer. The figures also exclude the CARB ZEV credits.

[ceterum_censeo]

Doesn't the credit go to Tesla when it is leased?

[mikeash]

It goes to the bank that handles the lease.

[ceterum_censeo]

I guess that is my confusion, I thought Tesla was originating the lease.

[mikeash]

Tesla sells the car to a bank, and the bank leases it to the customer. For leases done through Tesla directly, Tesla just talks to the bank for you.