Tesla earns 8 times more profit than Toyota per car

[steveluv]

https://asia.nikkei.com/Business/Automobiles/Tesla-earns-8-times-more-profit-than-Toyota-per-car?utm_campaign=GL_JP_update&utm_medium=email&utm_source=NA_newsletter&utm_content=article_link&del_type=4&pub_date=20221108090000&seq_num=2&si=44594

Tesla earns 8 times more profit than Toyota per car
Focus on few, higher-priced models puts EV maker in lead on net earnings

A Model Y electric vehicle at a Tesla Gigafactory in Germany. The company has focused solely on EVs at the upper end of the market.   © Reuters
KAZUHIRO NOGUCHI, Nikkei staff writerNovember 8, 2022 03:28 JST

NAGOYA -- Tesla earned eight times as much profit per vehicle as Toyota Motor in the July-September quarter despite being outsold more than 7 to 1, a Nikkei analysis shows, putting the American electric-vehicle maker ahead in quarterly net profit for the first time since going public in 2010.

Tesla reported a $3.29 billion net profit in that quarter. Toyota earned 434.2 billion yen -- the equivalent of $3.15 billion based on the average exchange rate for the period of 138 yen to the dollar.

Toyota's decline stemmed in part from extraordinary factors. The automaker is currently shouldering increased material and electricity costs for its suppliers. Higher materials costs, including such assistance to suppliers, pushed down quarterly operating profit by 450 billion yen ($3.07 billion), which was only partially offset by a 370 billion yen boost from a weak yen.

It also booked one-time expenses of 96.9 billion yen from shutting down production in Russia.

"The decreased profit in July-September does not equate to a decline in Toyota's actual earnings potential," said Kota Yuzawa at Goldman Sachs Japan. Toyota came out ahead in terms of operating profit, at the equivalent of $4.08 billion to Tesla's $3.69 billion.

Still, Tesla has become one of the most profitable automakers in the world. Though its net profit fell short of Mercedes-Benz's in July-September, it outearned both BMW and Volkswagen. Its net profit margin came to 15% for the quarter.

Tesla's success stems largely from the profitability of each of its cars. The Toyota group sold 2.62 million vehicles in the quarter, 7.6 times as many as Tesla's 344,000. But its net profit per vehicle came to around $1,200 -- just one-eighth of Tesla's $9,570. Tesla is believed to lead the industry in terms of net profit per vehicle sold, even ahead of players like Mercedes-Benz.

Tesla vehicles at charging stations. (Courtesy of Tesla, Inc.)

Tesla's profit per vehicle has grown especially quickly since April-June 2021. Investors have responded favorably to the gains, and the company's market capitalization was roughly triple Toyota's as of Monday at around $655 trillion.

The gap is a result of the fundamentally different strategies pursued by the two automakers. Toyota offers a wide range of vehicles from gasoline-powered cars to hybrids, electrics and fuel-cell vehicles, and at a variety of sizes and price points.

Meanwhile, Tesla has focused solely on EVs. The Model Y and Model 3 account for over 90% of its sales, which have nearly doubled in two years despite their relatively high price tags. Even the cheaper Model 3 starts at around $40,000 in the U.S.

Confident in its strong brand appeal, Tesla has not hesitated to raise prices to pass on higher material costs to customers. It also started offering lucrative self-driving software as an add-on option ahead of rival automakers.

"The biggest factor behind Tesla's profit growth is sales volume, then prices hikes and a rise in self-driving software sales," said Koji Endo at SBI Securities.

Tesla has been installing so-called Giga Press casting machines to reduce the steps needed for assembly. In general, the use of such a machine could undercut quality but speed up mass-production. Teslas are also sold directly online in principle, a method that offers higher margins than selling via dealerships.

Toyota's bZ4X electric vehicle. (The license plate number has been obscured)

EVs are becoming widespread much faster than experts had anticipated. Boston Consulting Group in June said the share of EVs in global new car sales would reach 39% in 2030, upgrading the estimate it issued a year earlier by 11 points. The group cited tighter environmental regulations in the U.S. and Europe, lower costs and higher demand in revising the figure.

Toyota has set the goal of selling 3.5 million EVs in 2030, but currently the bZ4X is its only mass-produced model. A top Toyota official said at an earnings briefing on Nov. 1 that the automaker is exploring other options for mass-producing EVs, while another betrayed a sense of urgency, saying, "We cannot lose out in EVs."

Electric vehicles still face challenges. "In regions that are heavily reliant on fossil fuels, EVs are not the best solution to cutting carbon dioxide emissions," said a top Toyota official. Furthermore, charging infrastructure remains insufficient and further technological advances are needed.
 

[ER-3682]

That is why Elon Musk so RICH.

[ER-3682]

And Youtube Mechanic Scotty always said Tesla are "Pile of Crap".

Edited November 8, 2022 by ER-3682

[ER-3682]

I wonder Singapore Tesla Owners faced any Problems.?Like something not Working right etc.?

[Victor68]

I guess currently EV is a inflated priced car. No reason other than battery and charging station is holding back this change. Of course the current leaders of motor cars manufacturers are resisting. 

[ER-3682]

Don't forget Tesla are made in China with cheap Production Cost..but selling as a Premium EV in Europe & USA.

[inlinesix]

15 minutes ago, ER-3682 said:

Don't forget Tesla are made in China with cheap Production Cost..but selling as a Premium EV in Europe & USA.

Tesla has 4 production facilities.

Fremont, Austin, Shanghai & Berlin.

Fremont and Austin supplies USA.

Shanghai supplies Asia.

Berlin supplies Europe.

Tesla uses a lot of robots and giant cast machine.

So, your statement is INCORRECT 

p.S. https://www.idragroup.com/en

This Italian co made world biggest casting machine. It has to install before construction completes.

Edited November 8, 2022 by inlinesix

[Windwaver]

50 minutes ago, ER-3682 said:

That is why Elon Musk so RICH.

[t0y0ta]

Selling Rolex of course higher margin than CASIO G-shock.

Actually I am more curious what is the profit margin per car comparison between Tesla and Mercedes. It will be a more accurate comparison.

[Starry]

1 hour ago, ER-3682 said:

I wonder Singapore Tesla Owners faced any Problems.?Like something not Working right etc.?

Actually I am curious where they charge? I seldom see and neither do I remember where are the Tesla charging stations.  Or they build their own charging point within their landed house?

[Beregond]

1 hour ago, ER-3682 said:

Don't forget Tesla are made in China with cheap Production Cost..but selling as a Premium EV in Europe & USA.

Got alot similar stuff, from my secret lab chair, my razor mouse, to iphone, all selling as premium product

They got much higher profit margin as other similar product

Edited November 8, 2022 by Beregond

[Spurman]

Clever tesla.

Do biz no earn. Do for f**k rite

[Sosaria]

2 hours ago, ER-3682 said:

Don't forget Tesla are made in China with cheap Production Cost..but selling as a Premium EV in Europe & USA.

Toyota made in Japan and made in Thailand, so what's used for this comparison?

But you are right about Tesla. Their target market is not very smart in value-for-money. They'll pay for the brand and status, just like buying Apple products.

[inlinesix]

8 minutes ago, Sosaria said:

Toyota made in Japan and made in Thailand, so what's used for this comparison?

But you are right about Tesla. Their target market is not very smart in value-for-money. They'll pay for the brand and status, just like buying Apple products.

Tesla finishing may not be as good as Toyota.

Tesla high price is related to battery rather than premium product.

[inlinesix]

1 hour ago, Starry said:

Actually I am curious where they charge? I seldom see and neither do I remember where are the Tesla charging stations.  Or they build their own charging point within their landed house?

SP Power, Bluesg, Shell

[Heartbreakid]

Tesla is just an overhyped product. 

[Starry]

36 minutes ago, inlinesix said:

SP Power, Bluesg, Shell

Err, have to charge quite long time right?  Unless these places is in front of their homes/office, wouldn't it be quite an inconvenience whenever need  to charge?

 

Edited November 8, 2022 by Starry

[inlinesix]

1 minute ago, Starry said:

Err, have to charge quite long time right?  Unless these places is in front of their homes/office, wouldn't it be quite an inconvenience whenever need  to charge?

Use EV must change habit. How long depends on how much juice still have?

I rather drive EV. Both can top up concurrently