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"Considerably less margin" isn't a bad thing, when the competition heats up it's far easier for a producer that is lean and mean from the start than for a compa
by kryptiskt 4y ago
"Considerably less margin" isn't a bad thing, when the competition heats up it's far easier for a producer that is lean and mean from the start than for a company used to fat margins.
- kjksf 4y agoOr maybe it's the high margin that is a good thing? When competition comes and both Tesla and BYD have to lower the prices, which one will be better off? The one with slightly lower margins? Or the one that is now unprofitable?
- WJW 4y agoI think the implication was that competition has already come and BYD sells a roughly similar car (in terms of range and size) at a cheaper price, because they are willing to accept a lower margin than Tesla. Tesla might have to lower prices just to match BYD.
- NonNefarious 4y agoOr they're subjected to far-less-stringent standards and most likely propped up with illegal subsidies. So... yeah.
- kjksf 4y agoWe can safely assume that all companies are maximizing their margins. Ockham's Razor. BYD isn't "willing to accept lower margin". They just can't price their cars higher or lower the cost of production. Given Tesla's months-long waiting list for new orders and recent price hikes, they don't seem affected by competition from BYD. If you look at revenue, in Q3 2018 Tesla and BYD were neck-to-neck with ~17.5 billion. By Q4 2021 Tesla pulled ahead by over 50% ($53 billion vs. $30 billion). https://seekingalpha.com/article/4486902-tesla-vs-byd-ev-stock-better-buy https://seekingalpha.com/article/4486902-tesla-vs-byd-ev-sto... So far in Tesla vs. BYD, Tesla is pulling ahead. And don't get me wrong: BYD is doing very well in EV market, much better than Toyota or Honda, but they're not a threat to Tesla.
- hef19898 4y agoAs Jeff Brzos put it: Your margin is my opportunity.