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0 pointsfweespeech9y ago0 comments

Per-unit margin goes down (but is still profitable per unit) but you make up in volume to create a profit.

Tesla's main costs aren't the cost per unit but the engineer/software costs iirc.

0 comments

@cortesoft - It takes a lot of time and infrastructure investment to ramp up production to those sort of levels.

This has actually been Tesla's business plan all along: start with a low volume, high-priced product (the Roadster) and gradually move towards successively higher volume, lower cost models.

jrv9y ago

As per the earnings call, the profit per unit actually went up, and the discounts were never sanctioned and also not relevant to this end result.

cortesoft9y ago

If they make more profit by selling more units at a lower price... then why don't they always just do that?

jacquesm9y ago

They don't make more profit per vehicle, they just made more profit in a short window of time by doing more sales but this may not be sustainable because it just shifts sales around rather in time at a lower profit per vehicle.

fweespeechOP9y ago

Production bottlenecks.

Tesla is constantly behind on producing cars for its customers. They just wanted to generate money now rather than later.

mikeash9y ago

Building lots of cars is hard. It takes a lot of time and money to ramp up production capacity to this level. They've been building cars as fast as they could for years now.

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