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I think your definition of “best of the best” needs updating. Show me where Toyota has casting machines anywhere near the scale of what Tesla is using in Model

by zaroth 6y ago

I think your definition of “best of the best” needs updating. Show me where Toyota has casting machines anywhere near the scale of what Tesla is using in Model Y, or board design, or AI chips, or even things like buying experience. Fundamentally “best” can be reduced to margins because everything else shakes out in a competitive market. Tesla has the best margins, and they will bring that margin advantage down to the $25k price point and Toyota won’t stop them. The other big number you can look at is depreciation and operating costs. Tesla has the lowest depreciation and operating costs per mile at its price point, making it substantially cheaper to own a $45k Tesla than a $45k ICE. A $25k Tesla with the same fundamentals could be had for perhaps $200/month with $0 down and would essentially obliterate any passenger car competition in any consumer environment where it’s possible to charge it. I would not expect Tesla to have any compunction of selling a $25k vehicle under the Tesla brand. I don’t think their S/3/X/Y cachet would be hurt by a smaller sibling.

bildung 6y ago
Teslas casting machines are just bought from Idra, are they not? If Toyota thought their self-developed casting processes (they do that for nearly a century and had 2500 ton machines since the 1970s) are not competitive, they could simply order the same machine from Idra.
itsoktocry 6y ago
>Show me where Toyota has casting machines anywhere near the scale of what Tesla is using in Model Y, or board design, or AI chips, or even things like buying experience. Toyota has 10s of millions of happy customers, and has car after car after car on top 10 lists, every year. From everything I've read, the Tesla service experience is horrible. >Tesla has the lowest depreciation Source for this? Or do you believe they are appreciating, too? >Tesla has the best margins You know this stuff is dead simple to look up, right? Toyota has profit and operating margins higher than Tesla. So, no, they aren't "the best".
- zaroth 6y ago
  I didn't say Toyota didn't have happy customers. Tesla's Model 3 received the top customer satisfaction score in each of the four age ranges in Consumer Reports survey of 420,000 drivers. [1] A Tesla Model 3 after 3/5 years has a residual value of 77.47%/58.96%/45.35%(est), versus for example a BMW 3 Series after 3/5/7 years with a residual of 61.56%/41.71%/34.15%. [2, 3] And the apt comparison for margins is gross margins not operating margins. Operating Margins will be higher for a stagnant company conversing cash versus a rapidly growing company. Gross margins show you how much they are earning per unit sale, regardless of how much of their profit they are re-investing in future growth. Tesla automotive gross margins in Q3 were 27.7% versus Toyota gross margins of 18.1%. [4, 5] [1] - https://www.thestreet.com/tesla/news/tesla-tops-consumer-reports-owner-satisfaction-survey https://www.thestreet.com/tesla/news/tesla-tops-consumer-rep... [2, 3] - https://caredge.com/tesla/model-3/depreciation https://caredge.com/tesla/model-3/depreciation https://caredge.com/bmw/3-series/depreciation https://caredge.com/bmw/3-series/depreciation [4, 5] - https://tesla-cdn.thron.com/static/4E7BR9_TSLA_Q3_2020_Update_P0Q85U.pdf https://tesla-cdn.thron.com/static/4E7BR9_TSLA_Q3_2020_Updat... https://finbox.com/NYSE:TM/explorer/gp_margin https://finbox.com/NYSE:TM/explorer/gp_margin

by zaroth 6y ago

bildung 6y ago

Teslas casting machines are just bought from Idra, are they not? If Toyota thought their self-developed casting processes (they do that for nearly a century and had 2500 ton machines since the 1970s) are not competitive, they could simply order the same machine from Idra.

itsoktocry 6y ago

>Show me where Toyota has casting machines anywhere near the scale of what Tesla is using in Model Y, or board design, or AI chips, or even things like buying experience. Toyota has 10s of millions of happy customers, and has car after car after car on top 10 lists, every year. From everything I've read, the Tesla service experience is horrible. >Tesla has the lowest depreciation Source for this? Or do you believe they are appreciating, too? >Tesla has the best margins You know this stuff is dead simple to look up, right? Toyota has profit and operating margins higher than Tesla. So, no, they aren't "the best".

zaroth 6y ago
I didn't say Toyota didn't have happy customers. Tesla's Model 3 received the top customer satisfaction score in each of the four age ranges in Consumer Reports survey of 420,000 drivers. [1] A Tesla Model 3 after 3/5 years has a residual value of 77.47%/58.96%/45.35%(est), versus for example a BMW 3 Series after 3/5/7 years with a residual of 61.56%/41.71%/34.15%. [2, 3] And the apt comparison for margins is gross margins not operating margins. Operating Margins will be higher for a stagnant company conversing cash versus a rapidly growing company. Gross margins show you how much they are earning per unit sale, regardless of how much of their profit they are re-investing in future growth. Tesla automotive gross margins in Q3 were 27.7% versus Toyota gross margins of 18.1%. [4, 5] [1] - https://www.thestreet.com/tesla/news/tesla-tops-consumer-reports-owner-satisfaction-survey https://www.thestreet.com/tesla/news/tesla-tops-consumer-rep... [2, 3] - https://caredge.com/tesla/model-3/depreciation https://caredge.com/tesla/model-3/depreciation https://caredge.com/bmw/3-series/depreciation https://caredge.com/bmw/3-series/depreciation [4, 5] - https://tesla-cdn.thron.com/static/4E7BR9_TSLA_Q3_2020_Update_P0Q85U.pdf https://tesla-cdn.thron.com/static/4E7BR9_TSLA_Q3_2020_Updat... https://finbox.com/NYSE:TM/explorer/gp_margin https://finbox.com/NYSE:TM/explorer/gp_margin