Just briefly returning to fundamentals. I note the following items in the Tesla 2021 10K:
2021 2020 2019
Automotive sales: 44,125 24,604 19,358 $ billion
Warranty provision 1,056 625 555
costs incurred (525) (312) (250)
% of sales provision 2.39 2.54 2.71
View attachment 799730
View attachment 799733
What these charts all show confirms the data in the Tesla 10K, no surprise in that.
The revealing truth is that Tesla has paid a very high price for actuarial skepticism, so over-reserves at an 'unusual' level. We all should know why this is the case.
The fact is that no OEM even approaches the Tesla effectiveness and efficiency. What is more is that Tesla continues to improve as it has incredible growth rates and new factories, new products and new technologies.
Warranty costs are declining as manufacturing simplicity advances, so manufacturing becomes less expensive while this happens. Of course part of this comes from inexpensive recalls, OTA is quite cheap.
This has become an annual process for me, normally beginning with my own examinations then going to Warranty Week extracts. HODL becomes ever more obvious, doesn't it?