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It's because Tesla makes an extra $7.5K from each car via the federal tax credit and an extra $70M each quarter selling ZEV credits. Without these they would n

by codex 13y ago

It's because Tesla makes an extra $7.5K from each car via the federal tax credit and an extra $70M each quarter selling ZEV credits. Without these they would not be profitable. So they have more money to apply to the fit and finish of the car than luxury manufacturers which don't make an electric. It's because Tesla makes an extra $7.5K from each car via the federal tax credit and an extra $70M each quarter selling ZEV credits. Without these they would not be profitable. So they have more money to apply to the fit and finish of the car than luxury manufacturers which don't make an electric. They also benefit from an enormous, low interest DOE loan. To date Tesla has lost more than billion dollars which has not been recouped; that's roughly -$50K per car sold in 2013 ($1B / 20K). In contrast, BMW only makes a profit of +$5K on each of their 1.5M cars sold yearly.

jfb 13y ago
But a luxury manufacturer like e.g. Audi gets to reuse engineering work from parent VW and sibling Lamborghini to improve their $100k car. Much of the comparative advantage of the Model S is due directly to the engineering differences of building an electric powertrain; they get to make different tradeoffs than BMW does in, say, an M5. The real nutcutting time will come when an established brand decides to build a high-end electric (the BMW i8, for instance), where they get to combine their much more significant economies of scale with the advantages of an electric drivetrain. EDIT: The i8 is a plug-in hybrid, actually, so it's really a worst of both worlds sort of deal. The point still stands as made, however.
- codex 13y ago
  I wonder how the marginal cost of an ICE compares with the marginal cost of one or two electric motors + regen + batteries + charger, and how those change over time. I suspect the electric drive train isn't cheaper now, but will be cheaper in a few years.
  - sliverstorm 13y ago
    I suspect aside from the batteries, electric drive train is already cheaper. Modern ICE are ridiculously sophisticated and require advanced manufacturing capabilities.
jpeg_hero 13y ago
east coaster?
cma 13y ago
If the other manufacturers opened a plant in california, or bought an existing one like Tesla, wouldn't they also get the same ZEV credits which they could sell or use for themselves? > To date Tesla has lost more than billion dollars Are you including liquid assets, like the California plant, as losses? (not accusing you, I haven't looked at their numbers)
- codex 13y ago
  $1B is roughly the GAAP losses for TSLA since they went public. I think that in order to resell ZEV credits more than 13% of a manufacturer's cars must be electric, which is not true of any other luxury manufacturer.
  - cma 13y ago
    That doesn't add up with this: http://www.wolframalpha.com/input/?i=tsla+earnings http://www.wolframalpha.com/input/?i=tsla+earnings But, that may not be GAAP. Where did you find that total?
    - mikeyouse 13y ago
      You can go to google finance: https://www.google.com/finance?q=NASDAQ%3ATSLA&fstype=ii&ei=IP2LUdCMAYjgiAKrCQ https://www.google.com/finance?q=NASDAQ%3ATSLA&fstype=ii... And then select 'Annual', 'Balance Sheet', and then look at the line item for "Retained Earnings (Accumulated Deficit)" Or alternatively, from TSLA's 2012 10-K: "We incurred a net loss of $396.2 million for the year ended December 31, 2012. In addition, we have accumulated net losses of $1,065.6 million from our inception through December 31, 2012. We have had net losses in each quarter since our inception." Source: Page 31 Here: http://ir.teslamotors.com/secfiling.cfm?filingID=1193125-13-96241&CIK=1318605 http://ir.teslamotors.com/secfiling.cfm?filingID=1193125-13-...
      - cma 13y ago
        Well then, that's because I was looking at "since going public", since that is what the guy I replied to said. But you and the original poster are right since you are talking about 'since inception'.
deleted 13y ago
[deleted]
sliverstorm 13y ago
Not to mention, I bet the electric drivetrain is much simpler than existing internal combustion engines. Modern gasoline engines are nothing less than engineering marvels; Tesla, on the other hand, probably gets to devote proportionally more money and effort to other aspects of the car.

by codex 13y ago

jfb 13y ago

But a luxury manufacturer like e.g. Audi gets to reuse engineering work from parent VW and sibling Lamborghini to improve their $100k car. Much of the comparative advantage of the Model S is due directly to the engineering differences of building an electric powertrain; they get to make different tradeoffs than BMW does in, say, an M5. The real nutcutting time will come when an established brand decides to build a high-end electric (the BMW i8, for instance), where they get to combine their much more significant economies of scale with the advantages of an electric drivetrain. EDIT: The i8 is a plug-in hybrid, actually, so it's really a worst of both worlds sort of deal. The point still stands as made, however.

codex 13y ago
I wonder how the marginal cost of an ICE compares with the marginal cost of one or two electric motors + regen + batteries + charger, and how those change over time. I suspect the electric drive train isn't cheaper now, but will be cheaper in a few years.
- sliverstorm 13y ago
  I suspect aside from the batteries, electric drive train is already cheaper. Modern ICE are ridiculously sophisticated and require advanced manufacturing capabilities.

jpeg_hero 13y ago

east coaster?

cma 13y ago

If the other manufacturers opened a plant in california, or bought an existing one like Tesla, wouldn't they also get the same ZEV credits which they could sell or use for themselves? > To date Tesla has lost more than billion dollars Are you including liquid assets, like the California plant, as losses? (not accusing you, I haven't looked at their numbers)

codex 13y ago
$1B is roughly the GAAP losses for TSLA since they went public. I think that in order to resell ZEV credits more than 13% of a manufacturer's cars must be electric, which is not true of any other luxury manufacturer.
- cma 13y ago
  That doesn't add up with this: http://www.wolframalpha.com/input/?i=tsla+earnings http://www.wolframalpha.com/input/?i=tsla+earnings But, that may not be GAAP. Where did you find that total?
  - mikeyouse 13y ago
    You can go to google finance: https://www.google.com/finance?q=NASDAQ%3ATSLA&fstype=ii&ei=IP2LUdCMAYjgiAKrCQ https://www.google.com/finance?q=NASDAQ%3ATSLA&fstype=ii... And then select 'Annual', 'Balance Sheet', and then look at the line item for "Retained Earnings (Accumulated Deficit)" Or alternatively, from TSLA's 2012 10-K: "We incurred a net loss of $396.2 million for the year ended December 31, 2012. In addition, we have accumulated net losses of $1,065.6 million from our inception through December 31, 2012. We have had net losses in each quarter since our inception." Source: Page 31 Here: http://ir.teslamotors.com/secfiling.cfm?filingID=1193125-13-96241&CIK=1318605 http://ir.teslamotors.com/secfiling.cfm?filingID=1193125-13-...
    - cma 13y ago
      Well then, that's because I was looking at "since going public", since that is what the guy I replied to said. But you and the original poster are right since you are talking about 'since inception'.

deleted 13y ago

[deleted]

sliverstorm 13y ago

Not to mention, I bet the electric drivetrain is much simpler than existing internal combustion engines. Modern gasoline engines are nothing less than engineering marvels; Tesla, on the other hand, probably gets to devote proportionally more money and effort to other aspects of the car.