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>yet the highest profitability, bodes well given Tesla's high growth rate. Comparing these companies like this is a bit odd. Tesla produced 25,000 cars last y

>yet the highest profitability, bodes well given Tesla's high growth rate. Comparing these companies like this is a bit odd. Tesla produced 25,000 cars last year. The others produce millions. Tesla produces a single, "luxury" model, which by definition has good margins. That's tougher to maintain at scale, with lower end, higher competition car classes. I'm actually surprised Daimler's margins are as high they are. Ford has a lot of legacy costs.

btian 12y ago
Why surprised? Daimler only makes luxury models.
- arethuza 12y ago
  Daimler makes lots of stuff other than Mercedes-Benz cars: http://www.daimler.com/brands-and-products http://www.daimler.com/brands-and-products Even Mercedes-Benz do a few models that I would exactly describe as "luxury" - e.g. the A-class.
- lotsofmangos 12y ago
  You mean like the smart car, or the citaro bendy-bus? edit - the luxury car thing is only a fraction of Mercedes-Benz output. They produce loads of commercial vehicles, from light vans and minibuses, up to HGVs and coaches, as well as stuff like roadside mowing vehicles and farming tractors.
bluedino 12y ago
Even if they produced the same amount of cars, it'd be interesting to see how many less people are employed, directly and indirectly, by Tesla than GM or Ford. There are so many fewer parts - GM and Ford spun off so many companies who simply made things like spark plugs, air filters, mufflers, and all the little internal engine parts like lifters, pistons or camshafts.
- stcredzero 12y ago
  Accomplishing the same ends with the input of fewer people is one of the primary means by which innovation advances civilization. If fewer people can satisfy our transportation needs, productivity can be devoted to other goals. (Like the colonization of the rest of the Solar System?)
jbellis 12y ago
Additionally, in 2013 about 12% of Tesla's revenue came from emissions credits rather than selling cars. That's going to do funny things to marginal profit numbers per car.
- matthewaustin 12y ago
  The 25% number for Tesla is from the most recent quarter, where they received no revenue from selling emissions credits. Their profitability has actually increased quarter to quarter even as their emission credit sales have dropped to zero.
- GeneralMayhem 12y ago
  I don't know why this gets trotted out as a knock on them. The whole point of emissions credits existing is to even out the failure of the market to assign cost to polluters. If Tesla is doing better relative to other manufacturers after adjusting for externalities, then it's doing better. The others were only winning by abusing an unenforced "rule" of the market that has now been closed.
sz4kerto 12y ago
You would be surprised: the luxury models are often not making any money at all, sometimes the manufacturer loses money on every single car produced. Some examples from different price levels: Bugatti Veyron, Ford Focus RS, VW Phaeton. The reason why they produce these is because of 'brand image'. VW builds the Veyron so the company can claim that they make the fastest car in the world, but Bugatti could not sustain itself. Same for the Focus RS: it costs a lot of money to design and build a car with that level of performance, but they can't sell it close to the price level of an entry level Ferrari (even though the costs are quite close). This is probably the most important reason why they limit the numbers -- they want the car to be on the front page of magazines, but they also want to make sure not to sell too many.
- jarek 12y ago
  There's luxury and then there's halo-brand luxury. Check the margins on a 7 Series or an S-Class.
bluedino 12y ago
Remember the legacy cost discussion from the bailout days? It cost GM something like $30/hr per employee to pay just for retired workers
mathattack 12y ago
A lot of the other companies are in non-car businesses too. (Example: Credit) In addition, they get skewed a lot based on how much is in-house versus outsourced. I like both numbers as metrics, but it can be hard to do apples-to-apples across industries.

btian 12y ago

Why surprised? Daimler only makes luxury models.

arethuza 12y ago
Daimler makes lots of stuff other than Mercedes-Benz cars: http://www.daimler.com/brands-and-products http://www.daimler.com/brands-and-products Even Mercedes-Benz do a few models that I would exactly describe as "luxury" - e.g. the A-class.
lotsofmangos 12y ago
You mean like the smart car, or the citaro bendy-bus? edit - the luxury car thing is only a fraction of Mercedes-Benz output. They produce loads of commercial vehicles, from light vans and minibuses, up to HGVs and coaches, as well as stuff like roadside mowing vehicles and farming tractors.

bluedino 12y ago

Even if they produced the same amount of cars, it'd be interesting to see how many less people are employed, directly and indirectly, by Tesla than GM or Ford. There are so many fewer parts - GM and Ford spun off so many companies who simply made things like spark plugs, air filters, mufflers, and all the little internal engine parts like lifters, pistons or camshafts.

stcredzero 12y ago
Accomplishing the same ends with the input of fewer people is one of the primary means by which innovation advances civilization. If fewer people can satisfy our transportation needs, productivity can be devoted to other goals. (Like the colonization of the rest of the Solar System?)

jbellis 12y ago

Additionally, in 2013 about 12% of Tesla's revenue came from emissions credits rather than selling cars. That's going to do funny things to marginal profit numbers per car.

matthewaustin 12y ago
The 25% number for Tesla is from the most recent quarter, where they received no revenue from selling emissions credits. Their profitability has actually increased quarter to quarter even as their emission credit sales have dropped to zero.
GeneralMayhem 12y ago
I don't know why this gets trotted out as a knock on them. The whole point of emissions credits existing is to even out the failure of the market to assign cost to polluters. If Tesla is doing better relative to other manufacturers after adjusting for externalities, then it's doing better. The others were only winning by abusing an unenforced "rule" of the market that has now been closed.

sz4kerto 12y ago

You would be surprised: the luxury models are often not making any money at all, sometimes the manufacturer loses money on every single car produced. Some examples from different price levels: Bugatti Veyron, Ford Focus RS, VW Phaeton. The reason why they produce these is because of 'brand image'. VW builds the Veyron so the company can claim that they make the fastest car in the world, but Bugatti could not sustain itself. Same for the Focus RS: it costs a lot of money to design and build a car with that level of performance, but they can't sell it close to the price level of an entry level Ferrari (even though the costs are quite close). This is probably the most important reason why they limit the numbers -- they want the car to be on the front page of magazines, but they also want to make sure not to sell too many.

jarek 12y ago
There's luxury and then there's halo-brand luxury. Check the margins on a 7 Series or an S-Class.

bluedino 12y ago

Remember the legacy cost discussion from the bailout days? It cost GM something like $30/hr per employee to pay just for retired workers

mathattack 12y ago

A lot of the other companies are in non-car businesses too. (Example: Credit) In addition, they get skewed a lot based on how much is in-house versus outsourced. I like both numbers as metrics, but it can be hard to do apples-to-apples across industries.