The margins were inflated during the pandemic, though. Musk even called their prices "embarrassingly expensive".

https://www.carscoops.com/2022/07/teslas-prices-are-embarras...

Tesla’s gross margins were much higher in 2011 than 2022. But yea, this is why I said it’s hard to separate how much of this was Tesla specific vs industry wide. However, the need to cut prices despite high inflation was unusual in the car industry and suggests this was a Tesla specific issue.

It is easy to explain when you consider that 2 car models are representing ~1.7M cars this year.

Their strategy is a little nutty and has basically required them to underprice their vehicles.

Any other mfg would cut back production to maintain margins.

Most non-Tesla auto manufacturers are taking a loss on their new EVs ATM as they try to optimize supply and recoup R&D costs.

Yeah, but I bet that changes once they get to ~400k per year. That isn't much different from Tesla's path.

There is no telling how much money is involved in falling margins if you don't also look at revenues. A quick Google search shows their gross profits look fine.

Also, you would have to compare them to other manufacturers. If profits were down an average of 20% and Tesla's were down 10% then they would be over performing their competitors during a down market.

Gross profits need to pay back capital expenses for equipment or land, R&D, etc which is why moderate drop in gross profits represents a much larger drop on long term profits.