5 ms·

The Tesla Model 3 cost $28,000 to build

21 points by prostoalex 8y ago

cryptoz 8y ago
The headline takes some random person's conjecture and displays it as if it were a fact. Not to mention, it takes a pretty-sounding number and makes a small nice soundbite out of it, despite being nearly meaningless. You can't infer Tesla's profit margin from this, and you also can't trust the number next week as so much is changing so rapidly that it hardly matters.
- doczoidberg 8y ago
  This is not a random person but a service company which has reverse engineered 4 Teslas for german car manufacturers. Among others these car engineers spotted that the new battery cells use nearly less then a third of cobalt (2,8% vs 8%) of ordinary cells what no other company has achieved. This should be a quite competitive advantage
  - barbegal 8y ago
    That's just the difference between different lithium cathode technologies. ACM uses ~3% Cobalt and NCM 111 uses ~8% [1] [1] https://www.cell.com/joule/pdf/S2542-4351(17)30044-2.pdf https://www.cell.com/joule/pdf/S2542-4351(17)30044-2.pdf Table 1
- meritt 8y ago
  Elon retweeted [1] the underlying article with the statement: "Best analysis of Model 3 to date". He also acknowledged [2] that $28,000 is a reasonable cost estimate once they reach scale. Try doing a little bit of research before dismissing an article that simply doesn't happen to fit within your worldview [1] https://twitter.com/elonmusk/status/1002270980755013632 https://twitter.com/elonmusk/status/1002270980755013632 [2] https://twitter.com/FredericLambert/status/1002271499359842304 https://twitter.com/FredericLambert/status/10022714993598423...
  - deleted 8y ago
    [deleted]
  - hinkley 8y ago
    There's a lot of assumptions buried in that statement. Once they reach scale, sure, but they also raised $1.26 billion to manufacture the Tesla 3. That's going to take a lot of cars to amortize out the cost of the production pipeline, and R&D. These production cost numbers remind me of bad graphs. I'm always left wondering if the author really meant them to be informative and accurate, or just wanted to rabble rouse. A Tesla 3 doesn't cost $28,000 to make. It contains $28,000 worth of parts and labor. Just like my sandwich doesn't cost $1 to make. That's only true if I ignore the waste materials, kitchen, lights, cleaning supplies, house, neighborhood and city I bought into in order to enjoy the privilege of making my own sandwich in peace and quiet. Just standing in my kitchen that long cost me 6 cents in property taxes, for instance.
clon 8y ago
I am going to wait for the Sandy Munro figures.
- tejohnso 8y ago
  For those who are unfamiliar with Munro, have a look at the build quality discussion he had here https://www.youtube.com/watch?v=CpCrkO1x-Qo https://www.youtube.com/watch?v=CpCrkO1x-Qo
pboutros 8y ago
I'd love to see some analysis of the comment section of articles like this. Would be interesting to quantify the #ProtectElon brigade a little bit.
- newnewpdro 8y ago
  What proportion of HN readers hold TSLA stock...
dawnerd 8y ago
Previous: https://news.ycombinator.com/item?id=17198517 https://news.ycombinator.com/item?id=17198517
- notenoughstuff 8y ago
  If anyone else were constantly writing one-sided articles on a product or company, with referral links in their signature, they'd be down-voted like crazy. Yet Electrek repeatedly makes the front page.
deleted 8y ago
[deleted]
ajross 8y ago
> The margins on the Model 3 must still pay for a cost structure that legacy carmakers don’t have, including planned factory expansions, new automation investments [...] What kind of voodoo accounting theory is this? No, R&D costs don't "have to" be covered by profit, they're bets against future earnings. That's the whole notion behind the idea of "investment" securities, the stock market, venture finance, corporate bond sales... I mean, it's possible to do an analysis such that the margin, expected sales growth and reasonable efficiency improvements combine to a product that's a net loss. It happens. But this isn't it. The numbers as they are say the Model 3 is a profitable car (assuming they can get production ramped, of course).
- xkjkls 8y ago
  It depends on what is thrown into R&D costs. For improvements and maintenance to current production lines, that would traditionally be considered as part of the gross margin. Though research into completely new production lines would not. Tesla classifies both as R&D and doesn't include them as part of their gross margins.

21 points by prostoalex 8y ago

The headline takes some random person's conjecture and displays it as if it were a fact. Not to mention, it takes a pretty-sounding number and makes a small nice soundbite out of it, despite being nearly meaningless. You can't infer Tesla's profit margin from this, and you also can't trust the number next week as so much is changing so rapidly that it hardly matters.

doczoidberg 8y ago
This is not a random person but a service company which has reverse engineered 4 Teslas for german car manufacturers. Among others these car engineers spotted that the new battery cells use nearly less then a third of cobalt (2,8% vs 8%) of ordinary cells what no other company has achieved. This should be a quite competitive advantage
- barbegal 8y ago
  That's just the difference between different lithium cathode technologies. ACM uses ~3% Cobalt and NCM 111 uses ~8% [1] [1] https://www.cell.com/joule/pdf/S2542-4351(17)30044-2.pdf https://www.cell.com/joule/pdf/S2542-4351(17)30044-2.pdf Table 1
meritt 8y ago
Elon retweeted [1] the underlying article with the statement: "Best analysis of Model 3 to date". He also acknowledged [2] that $28,000 is a reasonable cost estimate once they reach scale. Try doing a little bit of research before dismissing an article that simply doesn't happen to fit within your worldview [1] https://twitter.com/elonmusk/status/1002270980755013632 https://twitter.com/elonmusk/status/1002270980755013632 [2] https://twitter.com/FredericLambert/status/1002271499359842304 https://twitter.com/FredericLambert/status/10022714993598423...
- deleted 8y ago
  [deleted]
- hinkley 8y ago
  There's a lot of assumptions buried in that statement. Once they reach scale, sure, but they also raised $1.26 billion to manufacture the Tesla 3. That's going to take a lot of cars to amortize out the cost of the production pipeline, and R&D. These production cost numbers remind me of bad graphs. I'm always left wondering if the author really meant them to be informative and accurate, or just wanted to rabble rouse. A Tesla 3 doesn't cost $28,000 to make. It contains $28,000 worth of parts and labor. Just like my sandwich doesn't cost $1 to make. That's only true if I ignore the waste materials, kitchen, lights, cleaning supplies, house, neighborhood and city I bought into in order to enjoy the privilege of making my own sandwich in peace and quiet. Just standing in my kitchen that long cost me 6 cents in property taxes, for instance.

clon 8y ago

I am going to wait for the Sandy Munro figures.

tejohnso 8y ago
For those who are unfamiliar with Munro, have a look at the build quality discussion he had here https://www.youtube.com/watch?v=CpCrkO1x-Qo https://www.youtube.com/watch?v=CpCrkO1x-Qo

pboutros 8y ago

I'd love to see some analysis of the comment section of articles like this. Would be interesting to quantify the #ProtectElon brigade a little bit.

newnewpdro 8y ago
What proportion of HN readers hold TSLA stock...

dawnerd 8y ago

Previous: https://news.ycombinator.com/item?id=17198517 https://news.ycombinator.com/item?id=17198517

notenoughstuff 8y ago
If anyone else were constantly writing one-sided articles on a product or company, with referral links in their signature, they'd be down-voted like crazy. Yet Electrek repeatedly makes the front page.

deleted 8y ago

[deleted]

ajross 8y ago

> The margins on the Model 3 must still pay for a cost structure that legacy carmakers don’t have, including planned factory expansions, new automation investments [...] What kind of voodoo accounting theory is this? No, R&D costs don't "have to" be covered by profit, they're bets against future earnings. That's the whole notion behind the idea of "investment" securities, the stock market, venture finance, corporate bond sales... I mean, it's possible to do an analysis such that the margin, expected sales growth and reasonable efficiency improvements combine to a product that's a net loss. It happens. But this isn't it. The numbers as they are say the Model 3 is a profitable car (assuming they can get production ramped, of course).

xkjkls 8y ago
It depends on what is thrown into R&D costs. For improvements and maintenance to current production lines, that would traditionally be considered as part of the gross margin. Though research into completely new production lines would not. Tesla classifies both as R&D and doesn't include them as part of their gross margins.