[dragontamer]

The Model 3 has positive gross margins. Its an issue of volume, not an issue of margins.

There's a lot of things they did wrong to get to this point: changing the design of the M3 too much and too often, making it difficult to stock parts for repairs and all that... but ultimately, the vehicle is actually positive margin.

That doesn't make the company profitable. They spend $700 Million / quarter on their Supercharger network, their sales channels, salaries for employees, and other such "static costs". They need to get to the 5000 cars / week (or higher) point to become profitable.

That's all it come down to. They've got a positive gross margin car, its an issue of selling more of them. If there's a ton of customers waiting for a cheaper vehicle, well that was an error in Musk's marketing. Too many people are holding out waiting for a cheaper car. IMO anyway.

At ~$40,000, they make $8k per vehicle or so. If they raised average prices to $50,000 or so (assuming a base price of ~$45k), they'd only need to sell 1/2 as many vehicles to make a profit.