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Am I reading this right? They have 25% profit margin on each automotive? Feels like a tech company's margins. Does anyone know how it compares to traditional au
by yalogin 7y ago
Am I reading this right? They have 25% profit margin on each automotive? Feels like a tech company's margins. Does anyone know how it compares to traditional automakers?
- coherentpony 7y agoIs 25% high? I have no clue.
- artursapek 7y agoFor cars, yeah
- coherentpony 7y agoAnd for tech?
- alteria 7y agoSaaS has really high gross margins (>65%?), but I'm not sure that gross margin number is comparable with the 25% that Tesla reported.
- llsf 7y agoDoes anybody know why Saas on average have such high gross margin ?
- jlbnjmn 7y agoIt doesn't cost much to add a user to SaaS, but it costs a lot to write the software and convince people to pay for it. Gross margins are calculated from per unit costs, so advertising expenses, servers, supporting SaaS, and the salaries of programmers and sales people are not included. Also, physical products are made from relatively scarce resources. Software is typed, and words are not scarce. SaaS companies have benefited from demand outstripping supply. SaaS replaces human labor, so it takes a SaaS competitor to drive down prices.
- Rury 7y agoGross margin = (Revenue - COGS) / Revenue. So reason is very low costs... being that there is almost no physical inventory/material costs involved. Just servers, a few programmers to make and maintain things, any other staff, and whatever bills they have (e.g. electricity/internet/advertising/fees from software they use).
- alteria 7y agoGross Margin = Revenue - Cost of Goods Sold SaaS usually don't include development costs into COGS. Only directly attributable costs (hosting, customer support, etc.) Tesla on the other hand has to include raw materials and even labor into COGS.
- Traster 7y agoI don't think that includes CapEx. So they're making 25% on each car, but they have to spend several billion dollars building a factory to manufacture them that turned up on their balance sheet in previous years. In the same way they're making 25% margin on their car, but they're still losing money - because it all goes into building the facilities to manufacture their next model.
- gamblor956 7y agoThese numbers are not prepared under GAAP for the automotive industry, since there is no such thing as GAAP per-automotive profit margins for global auto manufacturers. Vehicle pricing is too dependent on both the class of the vehicle and the geographic market for a single global number to be meaningful. (For example, Toyota profitably sells vehicles that range from $1000 to commercial vehicles that sell for $250,000 or more.) Tesla provides these numbers because its financials on a GAAP basis show it is under-performing most of its competitors. Despite selling more cars than all of its luxury competitors, Tesla lost money doing so. Its competitors may not sell as many vehicles, but they made profits on a GAAP basis...(and using Tesla's rubrics, would have even higher per-vehicle profits than Tesla since those profits account for capex and other items that Tesla excludes).
- aguyfromnb 7y agoThese are non-GAAP numbers. The real numbers are closer to 17%, which is still pretty good.
- 11thEarlOfMar 7y agoThat would be 25% gross margin. That means before they've paid salaries and recurring expenses. Nonetheless, for autos, that is world class. Last time I checked, only Toyota had higher gross margins. Note that it's also before they've paid interest or principle on loans/bonds, before their capital spend (new factories & mfg. equipment). This type of spending is investing in future profits, such as building CyberTruck, adding capacity for more Model Ys, adding capacity for charge stations, etc.
- gbronner 7y ago20%. The other 5% is from selling credits to other automakers.