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Former GM Product Czar: Tesla a "Fringe Brand"
cartechboy writes There's been plenty of skepticism when it comes to Tesla. The Silicon Valley startup unveiled an all-electric car that stunned the world and had many other automakers rolling their eyes. Fast forward to 2014 and Tesla's preparing to launch its third model, the Model X. Production of the Model S sedan is humming along, and this new automaker continues to make headlines multiple times a week. Industry veteran Bob Lutz was the champion behind the Chevrolet Volt, and has been quite vocal about Tesla from the beginning. So what's his view on the company now? He said Tesla will remain a "fringe brand" until it launches its next generation of vehicles and the smaller, less expensive Model 3. Speaking Wednesday on CNBC's "Squawk Alley" finance show he said that Tesla's stock price was "kinda high" at the moment.
FTFY
"First they ignore you, then they laugh at you, then they fight you, then you win, and then their paid lobbyists have you legislated out of business.."
The world's burning. Moped Jesus spotted on I50. Details at 11.
GM market cap 51.8B
Ford market cap 58.44B
Tesla market cap 30.66B and this is after a major drop in stock price, I believe it has been higher than GM !
A fringe brand that is worth over half of the big auto boys... Fringe my a..
If only any other brand got rave reviews like Tesla is getting. Specially in customer satisfaction.
Tesla actually has a significant profit margin per car sold (25%) versus GM at 0.7% for this latest quarter across all of their divisions. That's where the massive disparity comes from. When you can sell luxury cars at a much higher price with much higher margins, volume doesn't mean dick.
Thirty four characters live here.
It also doesn't hurt that they are given zero emission car credits from the California government for each car sold that they then turn around and sell to GM, Toyota, etc for about $30K per Model S. That is where they are getting most of their profit.
Tesla actually has a significant profit margin per car sold (25%) versus GM at 0.7% for this latest quarter across all of their divisions. That's where the massive disparity comes from. When you can sell luxury cars at a much higher price with much higher margins, volume doesn't mean dick.
You don't understand their business models.
If Tesla is claiming a 25% margin, then that's solely on the direct cost of the car and doesn't account for overhead such as the capital depreciation. It doesn't matter how much money they make over the direct cost of the car, what matters is the profitability, money left over after ALL expenses of the company. In accounting circles that's called Net Margin, and Tesla has not has a positive net margin in it's history; they are burning cash to claim market share. That only works for so long.
Last year Tesla lost $75M, which is an improvement over the $350M they lost last year and the $250M they lost before that:
http://finance.yahoo.com/q/is?s=TSLA+Income+Statement&annual
GM makes .7% on their cars. This is a bid for market share. That's ok though, because GM doesn't make money selling cars. They make money on *financing* cars; their auto loan and lease divisions are the real money generators; the physical cars are just an entry point. GM made $5B last year, which was a 3.4% net margin over gross revenues.
I'm a fan of Tesla, but seriously if you're going to make a comparison at least get the facts right and don't obfuscate it with pointless numbers.
Price of 2015 Chevy Volt - $34,345, 60 month loan price per month $587
Price of a Model S - $69,900 , 60 month loan price per month $1,187
Anticpated Price of a Model 3 - $50,000, 60 month loan price per month $855
http://www.ibtimes.com/2017-tesla-model-3-starting-price-50000-according-sobering-report-teslas-future-challenges-1690822
I think on a commodity product like an automobile, customer retention will be dictated far more by the average wealth of the consumer and less so on brand. Brand makes a difference when price is comparable.
According to Yahoo Finance, Tesla is still losing money and recording a -6.82% profit margin. Their margin per car may be positive, but the company isn't making a profit yet. (Key word, yet).
HIs point was if you're worrying about oil changes in your ICE car you're worrying about the wrong thing. Regular cambelt maintenance, fuel quality, ensuring you (or your SO) doesn't wreck the injectors by misfuelling, wrecking your cat converter, catastrophic coolant loss. All things that can trouble an ICE car which don't trouble a Tesla. Basically a Tesla is a big battery, some motors and an ECU. That's a hell of a lot simpler than an ICE car - and a double hell of a lot simpler than a hybrid, which is basically both an ICE and an EV shoved into one chassis and rudely mated. Yes, I'm sure it's expensive if you need to replace a Tesla motor or its battery (aren't they planning swap in / swap out batteries though?) but that's about the only likely major fault.