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Comment by kmonsen | Hacker News Reader

Sure Tesla can make good cars, but not if it has to sell them at a profit. Over the lifetime of Tesla, each car has been subsidized by like 10k from shareholders and 7.5k from government. Both subsidies are going away as we speak.

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That is really not true. Each individual car is sold for more than the cost of manufacturer. Statistics like this tend to take fixed costs and historical costs into account in a way that shouldn't be divided by unit volume.

I caution you to read more about this, as you see statistics like this quoted often in the press. It is almost always an indicator of issues with article quality.

I read earlier that model 3s had. 20% gross margin. I’m happy to find the source again if you’re interested, but I'd also love to see your source.

When considering whether a fleet of cars has been profitable, you can’t consider only the gross margin (which excludes certain company fixed costs to arrive at an answer to “was that last car we made profitable?”) but must also consider overall profitability (“did we make money doing all of the things we did?”)

Tesla’s answer to the second is “no” for substantially all of the company history.

Agreed. The are using gross margin to fuel crazy growth. Much like Amazon. Tesla went from 0 2012 to #1 in 2018 in the premium segment.

Certainly looks like if they stopped expanding at a crazy rate that they would collect profits at a very healthy rate.

I'm sure just about everyone in the premium segment would love to "fail" by selling 63,000 cars costing over $50k each with gross margin of 20%.

Tesla doesn't make good cars. They make unremarkable cars with good drive-trains. It's like the EV version of FCA's ~700hp offerings. Sure the interior and build quality are kind of crap for what you pay but with 700 ponies on tap you don't care.

This is a joke right? They make some of the most highly regarded cars of all time. Recently buying one and showing it off almost every single person (30~) was blown away at how much better it was then their car and wanted one in the future.

Tesla has many problems but making bad cars isn't one of them, these things are awesome.

No it's not a joke. The Model 3 and Model S have relatively high NVH and a relatively cheap feeling interior compared to vehicles of the same class and price point. You're paying German car money but it goes to the drive-train instead of the "luxury German driving machine" experience. There's nothing wrong with that but to talk up Tesla's vehicles as though they're luxury cars is foolish.

Yeah thanks for explaining it to me, I own one. I personally couldn't care less about the interior but I understand some people do. The driving/overall experience to me is night and day when compared to ICE vehicles or even other EV competitors.

I just can't agree with that on the model 3. The model 3 is basically BM 3 series money, and there is nothing particularly phenomenal about the BMW 3 series from a luxury standpoint.

Are you talking about the elusive $35,000 model 3s? Because most Teslas sell for 5-series and E-class prices.

IDK my SR+ with autopilot was 39,500, before a 3750 tax incentive.

I just priced out a BMW 330i (all wheel drive), which starts at $42,250. The Tesla M3 Long Range (dual motor) starts at $49,500. However, the BMW base price does not include "luxury trim" (i.e., chrome highlights), "convenience package" (basically lumbar support and keyless entry plus app access), "driver assistance", or "parking assistance". All of these seem to be standard in the M3 LR. Once you add those packages, the 330i pops over $51k. If anything, it looks like Tesla has set their prices to compete directly against the 3 series line. (These prices don't include tax subsidies or destination charges, etc.)

The ASP of Model 3 in the US is ~50k, if I'm not mistaken. The base price is just under $40k USD. In the US, the base price for the BMW 3 series ranges from ~40K to ~$56k for the M badge.

Also, the options packages for the BMW will tend to add up. TACC cruise is standard on the Model 3 SR+ for $40k. AFAIK, that will add at least 1k or so to the BMW.

The interiors aren't all that nice though, certainly not for how much change they are asking for. Having everything behind a hulking iPad sucks when you are driving a car. Give me dials, give me buttons that click in, give me levers, give me something where I can tell where the setting is with my fingers without having to take my eyes off the road. I'm really surprised car manufacturers have gotten away with cramming so many features into touch screen interfaces that give you zero feedback if you aren't staring at the screen, it really should be illegal as its absurdly dangerous.

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