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For a luxury car, that's not really good. As you move down-market, margins only get lower, so you have to rely on volume to make significant amounts of money. I
by dkrich 9y ago
For a luxury car, that's not really good. As you move down-market, margins only get lower, so you have to rely on volume to make significant amounts of money. If people don't buy Model 3's by the hundreds of thousands every quarter, they are going to have problems squeezing profits from this car.
- toomuchtodo 9y agoLegacy luxury margins. BMW: 8% Mercedes: 11% Audi: 7%
- kgwgk 9y agoGross margins are significantly higher than that (maybe below Tesla's 25%, but they sell many cars cheaper than the model S).
- dkrich 9y agoSo a company that has widening losses claims a 25% margin on its cars. Sounds like some interesting accounting is at work. Ask Bob Lutz whether margins are greater on a Chevy Camaro or a Cadillac ATS (exact same platform, one sells for about $10k more than the other).
- toomuchtodo 9y agoGM: 8.4% Sad!
- dkrich 9y agoSeems like you're missing the point. If a set of parts costs you X, and you can sell it as one product for 2X and as a different product for 3X, which one yields better profits?
- toomuchtodo 9y agoWe're not talking past each other. A Cadillac and a Chevy are much closer to parity than a Model 3 and a Model S/X (considering both parts and manufacturing techniques). I don't know what the Model 3 margins are yet, but I'm confident they're going to be above 15%.