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As of August 2018 that appears to not be the case: Tesla says that the Model 3’s gross margin “should grow significantly” to approximately 15 percent in the

As of August 2018 that appears to not be the case: Tesla says that the Model 3’s gross margin “should grow significantly” to approximately 15 percent in the third quarter and 20 percent in fourth quarter, thanks to “continued reduction in manufacturing costs and to some extent an improving mix.” From here on out, CEO Elon said during a call with analysts Wednesday evening, “the goal is to be profitable and cash flow positive every quarter going forward.” Source: https://www.theverge.com/2018/8/1/17639588/tesla-earning-q2-2018-model-3-production https://www.theverge.com/2018/8/1/17639588/tesla-earning-q2-...

bryanlarsen 7y ago
Last quarter's gross margin was 15%. Given that the small number of Model S and X's probably have much better margins, the Model 3 margin is below 15%, but probably not much below. https://ycharts.com/companies/TSLA/gross_profit_margin https://ycharts.com/companies/TSLA/gross_profit_margin
eatbitseveryday 7y ago
>Tesla says that the Model 3’s gross margin “should grow significantly” to approximately 15 percent in the third quarter and 20 percent in fourth quarter, thanks to “continued reduction in manufacturing costs and to some extent an improving mix.” From here on out, CEO Elon said during a call with analysts Wednesday evening, “the goal is to be profitable and cash flow positive every quarter going forward.” Please do not quote by using a code box. Use italics (put an asterisk on either end) or a carrot > to indicate a quote, rather than creating a endlessly long sideways scroller.
gamblor956 7y ago
Important caveat: this is under Tesla's made-up accounting rubric. Under GAAP accounting (i.e., the standardized accounting methods everyone else uses) they lose money on each car, i.e., they have a negative gross margin.
- rainyMammoth 7y ago
  This should be upvoted to the top of the page. I'm not rooting against or for Tesla, but they are extra shady regarding accounting. They are losing money on each car. There is so much misinformation around this pushed by Tesla fans and the company itself though that you might easily believe they are profitable, but they are not!
- danhak 7y ago
  Totally false on both counts. 1) Tesla's GAAP gross margin was 14.5% for the most recent quarter [https://ir.tesla.com/static-files/1e70a30c-20a7-48b3-a1f6-696a7c517959 https://ir.tesla.com/static-files/1e70a30c-20a7-48b3-a1f6-69...] 2) Breaking out GAAP and non-GAAP figures is totally standard and commonplace among publicly traded companies. Take a look at Ford's Q2 letter, for example, which includes a whole page describing how and why they use Non-GAAP financial measures to supplement GAAP figures [https://s22.q4cdn.com/857684434/files/doc_financials/2019/q2/updated/2Q19-Financial-Release.pdf https://s22.q4cdn.com/857684434/files/doc_financials/2019/q2...]
- bryanlarsen 7y ago
  GAAP gross margin last quarter is 15% versus the 19% "made-up" number they quote in their press release. It's not negative.

bryanlarsen 7y ago

Last quarter's gross margin was 15%. Given that the small number of Model S and X's probably have much better margins, the Model 3 margin is below 15%, but probably not much below. https://ycharts.com/companies/TSLA/gross_profit_margin https://ycharts.com/companies/TSLA/gross_profit_margin

eatbitseveryday 7y ago

>Tesla says that the Model 3’s gross margin “should grow significantly” to approximately 15 percent in the third quarter and 20 percent in fourth quarter, thanks to “continued reduction in manufacturing costs and to some extent an improving mix.” From here on out, CEO Elon said during a call with analysts Wednesday evening, “the goal is to be profitable and cash flow positive every quarter going forward.” Please do not quote by using a code box. Use italics (put an asterisk on either end) or a carrot > to indicate a quote, rather than creating a endlessly long sideways scroller.

gamblor956 7y ago

Important caveat: this is under Tesla's made-up accounting rubric. Under GAAP accounting (i.e., the standardized accounting methods everyone else uses) they lose money on each car, i.e., they have a negative gross margin.

rainyMammoth 7y ago
This should be upvoted to the top of the page. I'm not rooting against or for Tesla, but they are extra shady regarding accounting. They are losing money on each car. There is so much misinformation around this pushed by Tesla fans and the company itself though that you might easily believe they are profitable, but they are not!
danhak 7y ago
Totally false on both counts. 1) Tesla's GAAP gross margin was 14.5% for the most recent quarter [https://ir.tesla.com/static-files/1e70a30c-20a7-48b3-a1f6-696a7c517959 https://ir.tesla.com/static-files/1e70a30c-20a7-48b3-a1f6-69...] 2) Breaking out GAAP and non-GAAP figures is totally standard and commonplace among publicly traded companies. Take a look at Ford's Q2 letter, for example, which includes a whole page describing how and why they use Non-GAAP financial measures to supplement GAAP figures [https://s22.q4cdn.com/857684434/files/doc_financials/2019/q2/updated/2Q19-Financial-Release.pdf https://s22.q4cdn.com/857684434/files/doc_financials/2019/q2...]
bryanlarsen 7y ago
GAAP gross margin last quarter is 15% versus the 19% "made-up" number they quote in their press release. It's not negative.