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Comment by sixQuarks | Hacker News Reader

Having followed the industry closely, I can assure you the likes of Honda and Toyota are not laughing at Tesla anymore.

As the saying goes, "first they laugh at you, then they fight you, then you win".

The laughing stage is far gone.

Tesla's sales are a rounding error for Toyota. Even if Tesla somehow delieved 100% off their Model 3 preorders in 2017, that would be less than 5% of the number of cars sold by Toyota.

They are indeed a small number compared to the total number of cars produced by Toyota, but they are all-electic. How many all-electric cars does Toyota build? Of course, Tesla won't be taking over the car market by numbers any time soon. But they are about to take a huge slice of a profitable segment of cars, with models Toyota at the moment cannot compete with. They are working busily to change that, but right now, Tesla has no competitor in their segment.

All-electric cars are not "a profitable segment". They might be in the future, but it's a bet.

Do you have any numbers to back up your statement? How is the revenue of Renault and Nissan from their electric car programs? At least they sell well, so I would assume they are profitable.

And of course Tesla is not really profitable as in the quarterly revenue, but according to their statements, they do get above 20% profits from selling cars which get eaten up by their aggressive reinvestments - the company is growing by about 50% year over year.

To sell cars in California manufacturers need to get credit for selling a certain number of electric or hybrid cars. I believe Nissan sells leafs at a loss to meet those quotas. BMW and Fiat certainly do. Most of the other big manufacturers are buying credits from Tesla to meet their quotas. The credits were the only reason Tesla made a profit on a recent quarter.

I still would like to see the numbers backing up the thesis that especially Nissan and Renault, who are selling a lot of electrical vehicles here in Europe too where there are no ZEV credits in play, and lose money at that. Yes, the credit business helped Teslas profitability as a company in the last quarter, but that is a statement about Tesla as a company. They are making strong profits on the production of the Model S/X, but are spending all proceeds from that into the expansion. This means: building the Gigafactory, expanding the Freemont plant, setting up dealers and repair centers, running and expanding the supercharger network. At a year over year growth of more than 50% this is an amazing feat. I don't think that supports the statement "you are not making a profit selling electrical cars".

You will not see hard numbers because companies don't show them. Nissan Leaf became profitable about two years ago, if ever (their boss said "We're getting there" [1]) - but that means cost of production of a single unit got below cost of sell. It's still a long road before the RnD and other upfront costs will be returned.

The same goes for BMW. They recently announced they expect lower profitability of the entire make due to cost of production of the electric cars.[2]

Each Fiat 500e is sold with $14000 loss[3].

Besides, I'd argue that Tesla make money on their cars not because they are in a "profitable segment of electric cars", but because they are in profitable segment of luxury sedans (and SUVs). Sure, all-electric is part of their appeal, but they are no more profitable than luxury sedans with combustion engines.

[1] http://www.torquenews.com/2250/nissan-leaf-now-profitable-so... [2] https://www.bloomberg.com/news/articles/2016-11-04/bmw-third... [3] http://jalopnik.com/sergio-marchionne-doesnt-want-you-to-buy...

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