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I am totally in the Tesla camp, but to play devil's advocate, isn't profitability the real important number here? Tesla just became profitable, but Porsche is

I am totally in the Tesla camp, but to play devil's advocate, isn't profitability the real important number here? Tesla just became profitable, but Porsche is the most profitable car company (http://www.dw.de/porsche-emerges-as-worlds-most-profitable-carmaker/a-16727077 http://www.dw.de/porsche-emerges-as-worlds-most-profitable-c...)

devx 13y ago
In the grand scheme of things, that's irrelevant for Tesla. Right now it's good for PR, and it's good that it makes at least as much money as the others. But unlike Tesla, Porsche will never make a mass-market play. Tesla will - at least in the sense that Apple is making a mass-market play in the smartphone market. Tesla may never become the biggest "car company" in the world, although there's a pretty big chance it will become (if it isn't already) the biggest "electric car company" in the world. Either way, it will be a very important and popular car company, that will get big enough to be able to drag the whole industry after it, and set the standards for the industry.
bnejad 13y ago
I'm surprised they are making ~$22 per unit.. I didn't realize car margins were so low. Unless that article means $22,000
- lmartel 13y ago
  The European convention is to use dots in large numbers where Americans use commas. So yes, that's $22000
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- wbond 13y ago
  In many European countries a period is the thousands separator and the comma is the decimal separator. So yes, $22k per unit.
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zissou 13y ago
Porsche is owned by the Volkswagen Group who has a completely different strategy than Tesla. Volkswagen already makes money off makes and models marketed across the spectrum of consumers (from Skoda to SEAT, VW, Audi, Porsche, Bentley, Lamborghini, Buggati) -- all of which are owned by VW. The Volkswagen Group doesn't get nearly as much press as it should, but I suppose the incumbent doesn't need it -- they already sell hundreds of thousands of vehicles world wide every year. That being said, Tesla certainly has a long ways to go, but I think they have a good strategy going forward. Not to mention, I think the Model S is a beautiful car.
- mbreese 13y ago
  VW probably also doesn't want their product lines necessarily linked together in people's minds. I mean, if you're looking to buy a Porsche or Lambo, do you want people thinking VW Beetle? Same reason why Lexus doesn't play up their Toyota lineage. So, VW group (and all large manufacturers) necessarily have to limit their press to the individual product lines as opposed to the whole auto group.
  - bluedevil2k 13y ago
    Nice aside - read up on the Volkswagen Phaeton - shows that even a company like VW forgets this basic marketing tool sometimes.
    - mbreese 13y ago
      I know... it's like the high end VW engineers forgot and thought they were working for Audi. If that had been an Audi, it might have worked out better...
- 001sky 13y ago
  Porsche was the most profitable auto company prior to the merger, so not sure this is relavant. Porsche is profitable because (1) they are cost effective to produce; and (2) the effectively sell at well above sticker value, as the options are significantly marked up. So, their model is very effective in terms of pulling dollars out of the pockets of those in clined already to buy a porsche. While still leaving a base model within reach for some as well.
pbreit 13y ago
Not really. If Tesla were trying to be profitable (which it is not) it might be. Tesla is in growth mode, trying to sell cars and continue building the infrastructure to support the rollout of the Model X SUV and lower priced sedan.

devx 13y ago

In the grand scheme of things, that's irrelevant for Tesla. Right now it's good for PR, and it's good that it makes at least as much money as the others. But unlike Tesla, Porsche will never make a mass-market play. Tesla will - at least in the sense that Apple is making a mass-market play in the smartphone market. Tesla may never become the biggest "car company" in the world, although there's a pretty big chance it will become (if it isn't already) the biggest "electric car company" in the world. Either way, it will be a very important and popular car company, that will get big enough to be able to drag the whole industry after it, and set the standards for the industry.

bnejad 13y ago

I'm surprised they are making ~$22 per unit.. I didn't realize car margins were so low. Unless that article means $22,000

lmartel 13y ago
The European convention is to use dots in large numbers where Americans use commas. So yes, that's $22000
deleted 13y ago
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wbond 13y ago
In many European countries a period is the thousands separator and the comma is the decimal separator. So yes, $22k per unit.
deleted 13y ago
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zissou 13y ago

Porsche is owned by the Volkswagen Group who has a completely different strategy than Tesla. Volkswagen already makes money off makes and models marketed across the spectrum of consumers (from Skoda to SEAT, VW, Audi, Porsche, Bentley, Lamborghini, Buggati) -- all of which are owned by VW. The Volkswagen Group doesn't get nearly as much press as it should, but I suppose the incumbent doesn't need it -- they already sell hundreds of thousands of vehicles world wide every year. That being said, Tesla certainly has a long ways to go, but I think they have a good strategy going forward. Not to mention, I think the Model S is a beautiful car.

mbreese 13y ago
VW probably also doesn't want their product lines necessarily linked together in people's minds. I mean, if you're looking to buy a Porsche or Lambo, do you want people thinking VW Beetle? Same reason why Lexus doesn't play up their Toyota lineage. So, VW group (and all large manufacturers) necessarily have to limit their press to the individual product lines as opposed to the whole auto group.
- bluedevil2k 13y ago
  Nice aside - read up on the Volkswagen Phaeton - shows that even a company like VW forgets this basic marketing tool sometimes.
  - mbreese 13y ago
    I know... it's like the high end VW engineers forgot and thought they were working for Audi. If that had been an Audi, it might have worked out better...
001sky 13y ago
Porsche was the most profitable auto company prior to the merger, so not sure this is relavant. Porsche is profitable because (1) they are cost effective to produce; and (2) the effectively sell at well above sticker value, as the options are significantly marked up. So, their model is very effective in terms of pulling dollars out of the pockets of those in clined already to buy a porsche. While still leaving a base model within reach for some as well.

pbreit 13y ago

Not really. If Tesla were trying to be profitable (which it is not) it might be. Tesla is in growth mode, trying to sell cars and continue building the infrastructure to support the rollout of the Model X SUV and lower priced sedan.