Tesla does not yet produce cars cheaper than their rivals.

Tesla say they do but reach this metric only by leaving out financial items that all other automakers include in unit costing. If those same items were excluded with respect to the Chevy Bolt/Volt or BMW i3, or Jaguar iPace, then those cars are also fantastically profitable as well--even more so than any Tesla model.

> If those same items were excluded with respect to the Chevy Bolt/Volt

Are you talking about the same Bolt? The one where they were estimated to lose $9000 [1] per vehicle sold?

I'm being a bit flippant, but you can't in good faith argue that everyone else is accounting for EV stuff totally normally and only Tesla is doing something different. I expect all those companies are subsidizing the EV production in some way, as they do for all their low-volume cars. The cars that make money are low production high price models (eg, the Lamborghini's and Tesla Roadsters of the world), and the high volume cars (eg all the models (or platforms) that sell 500k+ annually, from Toyota/GM/etc). Model 3 is not quite at this production level yet, though it is close. We'll see from 2Q results tomorrow what the real deal is.

[1] https://www.inverse.com/article/32239-why-gm-loses-money-che...

> ...then those cars are also fantastically profitable as well--even more so than any Tesla model.

Not really. Those vehicles all benefit from economies of scale and have much less resistance to produce in those organizations. Beyond that they produce less of them in comparison. While it's easy to lump them into the same bucket Tesla doesn't enjoy some of the freebies the other manufacturers have for rolling pet electric projects. Beyond that none of the manufacturers disclose pure electrics to the street that I'm aware. So I'm not sure how you can make this assertion. Is there data for all three that breaks out those brands electrics P&L?

That's true.. but I'm just comparing tesla with other tesla models. If you were in the market for a leaf, you were probably never considering a model x/s.

But you make a good point.. there are now more luxury electric cars.. and those people are the same people that would buy a model x/s. Perhaps that's also part of why sales for those are lower.

Model X/S sales are dropping for two reasons.

Firstly they haven't been refreshed in forever and secondly they are being cannibalised by the Model 3. The problem for Tesla (and investors) is that their ARPU is now dropping at a time when they need margins.

The Model X is a profoundly stupid car that needs a redesign now. The model S is just old but still a very enjoyable car, a minor face-lift and some love and care to the interiors should do the trick.

Model S&X were both updated in spring 2019.

I think pre-purchase folks "see" two model S cars, and one model X.

(yes, get more familiar with them and the model S breaks down further in regard to AP and motors and battery sizes, but buyers aren't readily familiar with the distinctions until they do quite a bit of research)

Those other EVs are halo loss-leader cars intended to assuage investors that the company is trying to stay abreast of the very chaotic changes that will be coming to the industry.

Tesla makes EVs at profit. Margins have been confirmed, and they are at scale production.

Name me another scale production EV that has been confirmed to be profitable for the company. AFAIK the Bolt and iPace and even the Taycan are/will be toe-dipping projects.

Tesla is ... mostly ... profitable, with the necessary startup investments and vertical scaling complete.

It's really the only profitable EV company, and probably still has 8-10 years of structural advantage over the ICE incumbents.

A good metal/solid state lithium battery tech will help the incumbents close the gap (I think Toyota in particular is gambling on this), and VW seems to be actually walking the walk (to avoid Dieselgate fines) for EV investment.

But it looks to me all the other CEOs are just treading water with investors and analysts to keep their jobs as long as possible, because none of them are of the kind to do the restructuring necessary to make an established brand go all-in on EV.

> leaving out financial items that all other automakers include in unit costing

As far as we know Tesla includes all the same costs in its unit costing including warranty reserves, etc. What are you referring to?

There are feedback loops at play here. Tesla doesn't have to produce the cheapest cars to have an impact on driving down prices. And that's the conundrum for tesla, the dissonance between the social and capitalistic missions: driving down prices means thinner margins means less profitability.

This is the "Master Plan" Elon outlined 13 years ago so it's curious that 2 articles would come out today (this and one from WSJ) with the exact same misunderstanding.

https://www.tesla.com/blog/secret-tesla-motors-master-plan-j...

It's not really curious at all. I've been a Tesla investor since the IPO and continue to buy on the "dips". Hasn't failed me yet. Tesla has enjoyed a very solid two week bull run. The shorts are hurting, and right on queue, the very peculiar articles come out. Bloomberg has put out many Tesla articles. Same with Business Insider, who just yesterday ran an article of "Man, driving a Tesla, runs a red light. Killing two pedestrians." ... How is that news? Had it been any other vehicle, the vehicle model would not have been named and it would not be NATIONAL news.

I'm also on my second Tesla. You could offer me a Ferrari/Lambo/whatever, I'm keeping the Tesla.

If the Toyota CEO drove without hands on the wheel on national television and bragged about robotaxis and self driving, Toyotas would start joining Tesla accidents in the news, too.

I think part of it is Musk's braggadocio around the "Autopilot".

Not to mention the "autopilot" is fake self driving cars to skirt regulatory enforcement to get Tesla more data to collect and be first to market etc. It's so easy to jam it and cruise around typing emails or doing your makeup etc. Word is out I know someone who practices her flute on autopilot.

Absolutely, Tesla has always had the oddest coverage, whether positive or negative, I rarely feel an article about them is unbiased - there's just too much money slushing around.

I think Tesla is also unique in the extent to which Musk has pursued a high-visibility strategy. If you look at total sales, Tesla isn't even close to being in the top 20: https://en.wikipedia.org/wiki/List_of_manufacturers_by_motor...

So it's unsurprising to me that people will write articles about pedestrians getting killed by a Tesla. I think that would happen even if Tesla hadn't been talking up "Autopilot", autonomous driving, etc. But with those being prominently discussed, it's guaranteed people will find Tesla crashes interesting.

Agreed. They should probably dial down the marketing a bit and get their heads down on creating more amazing things and let that do the talking. At some point, it must be too distracting at all levels.

That's my personal comfort zone, but I think it's far too late for that now. I think Musk has talked both investor and consumer expectations into the stratosphere. That has given him low cost of capital and extremely low marketing costs relative to other car producers.

But now he's in the position of Wile E. Coyote running himself on thin air over a chasm. If he keeps running, he might make it to the other side. But it not, I don't think he falls slowly.

What people don't see is that he's pretty much playing a game of starcraft (or a similar RTS).

He's not showing amazing profitability because he's pouring so much into building his tech tree.

When the competitors finally build their base and start pumping out zerglings, they might just encounter these battle cruisers coming out of the fog of war...

Then why is their CapEx spend so low?