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by giantrobot
1430 days ago
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> That margin will continue to grow and then turn into a weapon when Tesla needs to be competitive. This does not follow at all. Tesla sells their barely up market cars at luxury car prices and makes a significant amount of money off selling emission credits and raking in other government subsidies. As "legacy auto" manufacturers ramp up their EV production they won't need to buy emission credits from Tesla. They'll also themselves be eligible for the bottom line boosting government subsidies. I also don't see Tesla being able to compete on luxury as they have significant problems with fit and finish. Now that traditional luxury brands have solid EV offerings it seems unlikely Tesla will be able to keep their margins and increase their sales volume. |
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Emission credits were 3.6%[1] of revenue last quarter (Q1 2022). I don't know what "subsidies" you are referring too but you may be thinking of the EV tax credit, which was exhausted by Tesla in late 2019[2]. So in that regard other EV automakers have an advantage over Tesla.
> I also don't see Tesla being able to compete on luxury as they have significant problems with fit and finish. Now that traditional luxury brands have solid EV offerings it seems unlikely Tesla will be able to keep their margins and increase their sales volume.
Tesla has certainly had fit and finish issues but they are solving this. Their new Model Y produced in TX uses their "giga castings" which removes the opportunity to screw up alignment by removing ~150 welds for the body. Look it up if you want to know more.
I think error in your thinking is that Tesla will remain static while others catchup. That's not going to happen. Tesla is innovating (increasing margin) and scaling at a faster rate than "legacy auto".
[1] Q1 2022 Financials https://tesla-cdn.thron.com/static/IOSHZZ_TSLA_Q1_2022_Updat... [2] https://fueleconomy.gov/feg/taxevb.shtml