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Tesla Model 3 Earns Five-Star Crash Safety Rating From NHTSA (jalopnik.com)
The National Highway Traffic Safety Administration has awarded the Tesla Model 3 with a five-star safety rating -- the highest possible score. This means that every car Tesla has built has earned a five-star rating. Jalopnik reports: The NHTSA tests cover three primary categories: Frontal Crash, Side Crash, and Rollover, and the Model 3 received the highest ratings in all categories. For some categories, it's easy to understand why Teslas do so well. Rollover resistance, for example, makes sense for cars that carry most of their weight at the very bottom, in the batteries sandwiched in the Tesla's chassis design. Other reasons for the remarkable crash safety may be that, without the need for a heavy chunk of metal as a drivetrain, effective and large crumple zones can be designed in, front and rear. The NHTSA has released videos of their frontal collision test, side pole collision test, and side collision test, for those who like watching these sort of things.
In other stories, people have scoffed at the notion model 3 cars could possibly be more popular than luxury electric models coming out.
Yet here we have another reason beyond just top acceleration numbers why people may want to get a Tesla rather than something else...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Now can we finally see the end of the morons claiming that Tesla doesn't know how to build cars, because it's harrrrrrrd? Sure, it's a hard job. That's why Tesla hired people who know how to do it.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
The second and third links, while different, seem to be the exact same video?
AC comments get piped to
Hey, when you sell cars below cost
Well we all know AC's lie, but by how much?
Here's a good example of a real-life measurement you can use to determine how much fabrication goes into the average AC statement, because Tesla has around a 20% profit margin per car - 5x higher than Ford. Kind of a lot different than "losing money on every car".
Hey, who you gonna believe, a smooth-talking AC where *certainly* has nothing against Tesla, or your lying Ars?
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Hey, when you sell cars below cost (essentially giving them away), you can move a lot of cars! Now, add in the $17,600 that Tesla loses on each vehicle ($717 million loss last quarter to ship 40,740 cars) and the $7500 the Government gives you to buy one, and you end up with the mythical $35K and up car actually costing $60K.
You are clearly not an accountant and you obviously don't work in manufacturing because you have the accounting analysis completely wrong. Where to begin...
TLDR version is that Tesla isn't going to have to raise prices - the just have to keep their variable costs low and sell a lot of cars and they should reach profitability. Presuming their debt load doesn't kill them before that happens of course.
1) You are assuming Tesla's costs are constant and fixed which is never true in manufacturing. This is not unique to Telsa.
2) Tesla has spend a huge amount of money building up a supply chain and assembly line and distribution/service network. This money gets recouped as they build and sell vehicles. This is a fixed up front cost which does not change not matter how many vehicles they sell. They have to achieve a certain volume of sales to be profitable which takes time. Every other car manufacturer experiences the exact same thing.
3) You failed to distinguish between fixed and variable costs and are allocating all the fixed costs to the first few vehicles produced. Literally almost every product manufactured by any company would seem to lose money if you allocated all the fixed costs over the first few units sold and then (wrongly) held that cost constant. That's not how it actually works. The more units Tesla sells the more units they can spread the fixed costs across. This is why buying large quantities of something gets you a better price than buying small quantities.
4) The tax credit has zero direct bearing on Tesla's profitability or lack thereof. It's an incentive to buy external to Tesla but doesn't add or subtract a dime to Telsa directly. Other than maybe getting some marginal sales the wouldn't have otherwise it doesn't add or subtract costs to Tesla.
5) That 40K vehicles sold number you quote is for ALL Tesla cars sold which includes the much more expensive Model S and Model X as well as the Model 3. You cannot evaluate the profitability of one car by conflating it's sales with that of another.
6) Half of Tesla's loss is accounted for by their R&D expenditures.
7) No Tesla will NOT have to raise prices to achieve profitability. If you think their current P&L shows this you don't understand how accounting works.
Here's a good example of a real-life measurement you can use to determine how much fabrication goes into the average AC statement, because Tesla has around a 20% profit margin per car
You are talking about Gross Margin which is NOT the same thing as Profit Margin. Gross Margin is the sales revenue minus the parts and labor directly used to build the vehicle. It does not include engineering, sales, marketing, R&D, financing, interest, taxes, overhead, and a multitude of different costs. Profit Margin only comes after all those other costs are taken into account.
That said, Tesla's Gross Margin is comparable to that of Toyota and FAR less than that of luxury brands like Ferrari (around 50% gross margin). It's a solid number for a company in that particular industry but nothing remarkable either. Ford's gross margin is lower because of some labor cost issues and loses non-truck vehicles but Ford has a NET profit to the tune of billions of dollars a year. Even really profitable car companies generally have profit margins measured in single digit percentages. But when you do billions in sales a year that adds up to a pretty big number. Walmart has low margins too but nobody is arguing they aren't profitable. Tesla's Gross margins should give confidence that they CAN get to profitability but they have some hurdles to get there - most notably their debt burden.
As others have pointed out already, the Model 3 earned a 5 star rating in every category, which is a rare accomplishment. The NHTSA frequently hands out overall 5 star ratings to vehicles that had lower marks in a number of categories.