$35K Tesla Model 3 envisioned by Musk not profitable, UBS says
OK, I'd prefer not to be brow beaten over this article or question but I'm going to post anyway.
So, Elon says the high-dollar cars need to be produced first or Tesla would die. I understand that concept. I also understand that even with these high-dollar cars, the Model 3 is the best selling car in its class and I believe that position will only continue to strengthen as ramping continues.
Sandy Munro's firm tears down the Model 3 (yes, a ER, PUP car) and concludes that there is 30% profit margin built into the Model 3.
Then, recently UBS concludes that Tesla won't be able to produce the Standard Battery (SB) version of the Model 3 and become or stay profitable...
Now, I understand basic economics... if it costs more to produce a widget than you are selling it for, losses occur on each piece and the company cannot be profitable... but what about the 30% margin from Monro? I know, the SB Model 3 is less money BUT don't we have to account for VOLUME?
Even if they are making less per car in the SB form, they will be still making something on each car, even at a smaller margin... and presumably, many of the folks still waiting on the list (like me) want to take advantage of the 'Master Plan' car and buy our first EV in the form of the SB (maybe with the PUP on the inside) vehicle because that is the price range we can afford.
So wouldn't/couldn't a smaller profit margin STILL be profitable if the volume of SB cars is high?
I know some of the folks on the reservation list, even from day one, threw in their deposit knowing they want a SB version of the car...
So help me out. I believe Tesla will still make the SB version AFTER the high-dollar cars are produced and with the growing volume of SB buyers, they should be fine, despite what the Bears say.
Educate me...
Thanks All!
OK, I'd prefer not to be brow beaten over this article or question but I'm going to post anyway.
So, Elon says the high-dollar cars need to be produced first or Tesla would die. I understand that concept. I also understand that even with these high-dollar cars, the Model 3 is the best selling car in its class and I believe that position will only continue to strengthen as ramping continues.
Sandy Munro's firm tears down the Model 3 (yes, a ER, PUP car) and concludes that there is 30% profit margin built into the Model 3.
Then, recently UBS concludes that Tesla won't be able to produce the Standard Battery (SB) version of the Model 3 and become or stay profitable...
Now, I understand basic economics... if it costs more to produce a widget than you are selling it for, losses occur on each piece and the company cannot be profitable... but what about the 30% margin from Monro? I know, the SB Model 3 is less money BUT don't we have to account for VOLUME?
Even if they are making less per car in the SB form, they will be still making something on each car, even at a smaller margin... and presumably, many of the folks still waiting on the list (like me) want to take advantage of the 'Master Plan' car and buy our first EV in the form of the SB (maybe with the PUP on the inside) vehicle because that is the price range we can afford.
So wouldn't/couldn't a smaller profit margin STILL be profitable if the volume of SB cars is high?
I know some of the folks on the reservation list, even from day one, threw in their deposit knowing they want a SB version of the car...
So help me out. I believe Tesla will still make the SB version AFTER the high-dollar cars are produced and with the growing volume of SB buyers, they should be fine, despite what the Bears say.
Educate me...
Thanks All!
