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Automotive EE here… any article that talks about Tesla’s financials even indirectly and it does not immediately mention how much money they make by selling carb

Automotive EE here… any article that talks about Tesla’s financials even indirectly and it does not immediately mention how much money they make by selling carbon credits back to GM Ford and Stellantis can pay immediately be disregarded. A casual look at the numbers doesn’t explain much. But if you look at that 7% margin, and realize that Tesla is nearly doubling that with carbon credit sales which are 100% margin. It changes the picture. Anyone else has a car they make 7% minus buying credits to be able to sell more in California. Tesla sells a car they make more. Without the carbon program Tesla would drastically have to change its model, which will be interesting because everyone is selling their own EVs and won’t need to buy as many credits soon. It makes no sense for Apple to get into vehicles for 20 reasons, this is just one. They’re way too late.

bushbaba 4y ago
Wouldn’t people have said the same with mp3 players back in the day. Honestly the biggest challenge will be manufacturing. Apple likes to surprise folks, how do you surprise them when you’ve got to build massive new factories
- lisper 4y ago
  > the biggest challenge will be manufacturing Don't underestimate the challenge here. Making an MP3 player is not that different from making a computer. Making a car is very, very different.
  - SV_BubbleTime 4y ago
    It took Tesla a decade to learn this. And they’re just getting around to the ideas that the industry had 100 years to develop and refine.
- kkaske 4y ago
  Wouldn't people have said the same thing with cell phones back in the day? In fact I had a discussion with an Apple store employee asking what they thought about the rumor that Apple was going to be releasing a phone. He said that there was no way Apple would even want to be in that space. I'm not saying they will get into cars, but you just never know.
  - bushbaba 4y ago
    They can make the mp3 players in enough quantity in a single place. You can air freight mp3 players to do JIT delivery. With cars that’s not possible.
    - kkaske 4y ago
      This is true. I would say, however, getting into phones meant dealing with carriers and such. That is still not to the same level of complexity of a car, but I could see Apple partnering with an existing maker to help fill in areas that they don't have skills in. They did that when they partnered with Google for webservices during the iPhone initial release.
martythemaniak 4y ago
Those credits aren't particularly relevant any more. Several years ago they were essential and made up practically the entirety of their profits, but today they're just a side-gig. In Q2'2022: $300m credits, $16 billion in total revenue, 2.3B in profit.
- aclatuts 4y ago
  I was just going to say this. The credits definitely do not double their margins, it adds 2% to their 11% base margin for a total of 13%
- SV_BubbleTime 4y ago
  Q2 was 300m hmm? Ok, do the rest of the math at 5% likely-actual or 7% industry average on sales.
ProAm 4y ago
> They’re way too late. I agree but Apple is never first to the table, they always take others inventions and improve them. Apple also charges an insanely high profit margin so they might get by with or without the credits.... But I agree this is dumb for Apple to pursue.

bushbaba 4y ago

Wouldn’t people have said the same with mp3 players back in the day. Honestly the biggest challenge will be manufacturing. Apple likes to surprise folks, how do you surprise them when you’ve got to build massive new factories

lisper 4y ago
> the biggest challenge will be manufacturing Don't underestimate the challenge here. Making an MP3 player is not that different from making a computer. Making a car is very, very different.
- SV_BubbleTime 4y ago
  It took Tesla a decade to learn this. And they’re just getting around to the ideas that the industry had 100 years to develop and refine.
kkaske 4y ago
Wouldn't people have said the same thing with cell phones back in the day? In fact I had a discussion with an Apple store employee asking what they thought about the rumor that Apple was going to be releasing a phone. He said that there was no way Apple would even want to be in that space. I'm not saying they will get into cars, but you just never know.
- bushbaba 4y ago
  They can make the mp3 players in enough quantity in a single place. You can air freight mp3 players to do JIT delivery. With cars that’s not possible.
  - kkaske 4y ago
    This is true. I would say, however, getting into phones meant dealing with carriers and such. That is still not to the same level of complexity of a car, but I could see Apple partnering with an existing maker to help fill in areas that they don't have skills in. They did that when they partnered with Google for webservices during the iPhone initial release.

martythemaniak 4y ago

Those credits aren't particularly relevant any more. Several years ago they were essential and made up practically the entirety of their profits, but today they're just a side-gig. In Q2'2022: $300m credits, $16 billion in total revenue, 2.3B in profit.

aclatuts 4y ago
I was just going to say this. The credits definitely do not double their margins, it adds 2% to their 11% base margin for a total of 13%
SV_BubbleTime 4y ago
Q2 was 300m hmm? Ok, do the rest of the math at 5% likely-actual or 7% industry average on sales.

ProAm 4y ago

> They’re way too late. I agree but Apple is never first to the table, they always take others inventions and improve them. Apple also charges an insanely high profit margin so they might get by with or without the credits.... But I agree this is dumb for Apple to pursue.