Tesla currently earns more per car sold than any other manufacturer in the world. But the boom may end soon.
For many years, Elon Musk did not make any money from his cars. But in 2022, Tesla has become the most profitable car manufacturer in the world. On average, the profit per car sold was $15,653 (€14,380) before tax. That’s more than double what VW gets from its models (6,295 euros).
The figures are based on Reuters industry data analysis and relate to the third quarter of 2022. Like all other manufacturers, Tesla had previously raised prices again and again. The main reason for this was the shortage of raw materials and parts on the world market. In general, fewer cars were produced, but in larger quantities. According to Tesla, it was able to post a profit of $3.7 billion in July, August and September alone.
However, other manufacturers were also able to benefit from the high demand for expensive cars. Mercedes increased operating margin to 13.2 percent in the third quarter of 2022, BMW to 9.9 percent. However, it was not as high as Tesla. Americans earned 17.2 percent per car – a year earlier it was 12.1 percent.
The high relative profit is mainly due to highly efficient production processes. The batteries are built by Tesla itself, there are fewer supplier parts and the standardized design improves economies of scale. “Giga” die-cast aluminum presses also reduce costs. Because they make the entire Tesla Model Y rear floor assembly in one piece.
A price war begins
Tesla can now use this price advantage to lower prices and put pressure on other manufacturers. Because after a strong year for e-mobility, where demand for e-cars was greater than supply, that relationship could soon be reversed. After all, many manufacturers are increasing their production capacity. Tesla has already put up the first signs of a discount war with recent price cuts.
Especially in Tesla’s second important market China, small electric start-ups like Xpeng or the Vietnamese company Vinfast could be pushed out of the market in this way. Because, like the well-known automakers, they don’t have nearly as much freedom in terms of pricing due to low margins.
Yes, now the time has come.
No, nothing for me.
OK: You can see which new electric cars are coming to the market in 2023 in our slideshow.
Tesla may reach the highest rate in the world among automakers at 17.2 percent. Americans make more than anyone else on everything sold. But the looming discount war could dampen results.