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A comment on Tesla posts big loss, cuts production of Models X and S to catch up on Model 3. Parent comment

Re:Tesla posts big loss, cuts production of Models X and S t... by opportune on Wednesday November 01, 2017 @06:01PM (#15605899)
The gross margin changing is fine and natural, I think. The Model 3 is a lower-priced good, so by being able to sell more of it, they can deal with somewhat lower margins. By that I mean, 100 cars * $12,000 gross margin each is definitely worse than 5000 cars * $4,000 gross margin (for Tesla at least, I suppose branding could come into play with other brands), even though the gross margins drastically collapse. It's just a different business model, and it's what Tesla wants to happen so they can get into the more regular-consumer market.
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Re:Tesla posts big loss, cuts production of Models X and S t... by 11thEarlOfMar on Wednesday November 01, 2017 @06:24PM (#15606054)
But the ratio of Model 3 to S+X units sold in Q3 does not support a 10% drop in Gross Margin for Q3, unless the cost of manufacturing the 3s they did ship was way higher than the associated revenue (significantly negative gross margins on the 3s). Maybe there are costs associated with the gigafactory that are getting assigned as cost of goods for the model 3s and throwing the margins out of kilter until the volume gets up? Or perhaps depreciation on the stamping equipment and fixtures that are largely idle?

I'm fine with the gross margin trending towards, say, 20% over the next few quarters since GM for example is at 12% (I'd expect Tesla's gross margin to be higher than GMs because Tesla keeps the revenue that GM has to give to its dealers).

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Re:Tesla posts big loss, cuts production of Models X and S t... by sliken on Wednesday November 01, 2017 @06:55PM (#15606230)
Man hours aren't free. Nor is a huge amount of your production facility running idle because one of your parts is constrained. The parts that aren't automated are being done by hand for now.

So sure they might well be making a loss at the current rate of sales of the model 3, but will be quite profitable once the production rate increases.

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