According to
this arcticle from 2013 Porsche´s
gross margin used to be 50%. No idea how much is hat changed, but likely it is still higher then Tesla´s.
The auto industry margin reporting is particularly difficult to compare because of the nature of the industry.
Most auto manufacturers, like Porsche, actually manufacture very little, but outsource to others such as Valmet and Magna Steyr. They also produce in their own factories but nearly all their sales come from vehicles derived from other VAG models and almost all of their parts are bought from others.
Tesla may be the most vertically integrated manufacturer today. If the Panasonic JV contribution is added, they certainly are. For the ICE equivalents:
Engines are often done through joint ventures or bought from other manufacturers. For the most part, more than half, transmissions are bought from third parties with such companies as ZF. Others (Ford and GM new 10 speed for example) are developed jointly by otherwise competitive companies.
What does that have to do with Gross and Net Margins. Among other things, classification. Depending on how these sourcing deals are structures gross margins might shrink or rise based on how development and manufacturing infrastructure have been amortized.
Porsche has long benefitted by their good fortune to buy big parts of their vehicles through VAG, that amortized over large volumes and allocated modest overhead. Others, like Opel/Vauxhall/Holden/Saab did the same but their parent allocated overhead to them in a way that reduced their margins. Both have lots of complexity and many intervening variable.
In practice very few people can accurately compare GM's from one builder to another and nobody can do so precisely.
Still these comparisons are all we have and they do tend to mean something in relative terms if not absolute.
Probably lots of people will disagree with me about my next point. I think Tesla GM's are very impressive and will probably reach 25% overall sometimes around mid-2018. Other things remaining equal the higher the growth rate the lower will be GM. Why? Because staffing, inventory and infrastructure costs tend to lead sales revenue. That is insignificant on a steady state.
So we have many analysts (the bears) who do not really understand the impact of growth rates on nominally steady sate accounting.
Other analysts, like those who assess credit risk, can readily understand how to mitigate those calculation discrepancies though techniques that adjust between periods, for example. Some people cringe at one or the other.
Then there is a third way,
By making JV's and Tier One deals manufacturers can outsource lots of capital cost and buy with purchase price amortizing costs they'd otherwise have on the balance sheet.
and a fourth way,
Don't make your own product at all, outsource it all. Those"badge-engineered" ones tend to have high OM low GM. We probably know lots of these, most resulting from intra company deals which export development costs such as Chevrolet Cruze/Daewoo Lacetti. Such vehicles mostly have shared engineering but the accounting principles used allow treatment to vary according to tax consequences and public perceptions. Usually that depresses Gross margin and increases Operating margin. Sometimes, as in Isuzu Rodeo/Honda Passport and
Honda Accord/Rover 600 the derivative was a nearly zero marginal cost way of introducing a new model. those have essentially auto-dealer-like margins.
Once we evaluate all those details and others, if we can, we realize that Tesla is exceedingly efficient in use of capital, and continue to be. It seems most people who bore themselves with this detail become quite optimistic about the future of Tesla. Strange 'trade secrets' (i.e. not secret but usually ignored) begin to appear, such as the very modest cost of the Supercharger network. We also begin to see that if Tesla even achieves 50% of Model 3 expectations their OM will suddenly skyrocket.
Lastly, we finally begin to understand the impact of production automation for Model 3. Devilishly tricky to coordinated ~500 robots. Once done the GM's go exceedingly high and the OM's go with it. Once that is resolved it will be replicable with far less angst. In accounting terms most of that angst appears as diminished GM's and increased Opex and Capex. In transition the accounting is very messy. Even so the clues are all there.
Some of us want desperately to model all this. I have used up far too much memory with my iterations. Probably a few of us have done that. Not so much the 'analysts', because this stuff is work.
Simply stated, my predictions:
- 2018 will be profitable GAAP and non-GAAP. GM's will be >20% and would be higher except for the costs for Model Y, Semi and the next GF;
-CAPEX will decline in relative terms while accelerating in absolute terms;
-OPEX will be gradually declining as a % of sales;
-during 2018 new arrangements will allow CPO to be recorded as wholesale while reselling in Tesla stores with accounting looking 'dealer-like'
Two huge major issues;
The retail distribution system. At scale the impact of the NADA-States in the US will become serious. If the US Supreme Court does not resolve that issue Plan B will happen. While I have an opinion I do not know how this will be treated. I think this is a more important issue for GM's and sales than is Model 3 buildup.
China. How this issue will be resolved will have huge consequence for every accounting and business issue. GM's, OM's, sales and Capex will all be greatly affected.
All of this ends out boing the GM issue writ large in my opinion. Porsche always can have high GM because it need not deal with any of this and in fact can have most of Capex dealt with through parental support. There is an analogy: a child in 30's, still living with parents, working as a Wall Street trader. High income, low expense, apparent independence. That's Porsche.
