Range Extender Officially Cancelled!

[mongo]

Again, mixing numbers - confusing individual car margins with marginal profitability that includes non-vehicle costs. Note the comment on depreciation - includes costs that have nothing to do with the actual cost of producing a vehicle

Don't you need equipment to produce vehicles? And isn't that what depreciates? So what definition are you applying for gross margin profitable? Some assumed volume (would be profitable at X volume)? General Motors' variable costs only (sales price > BOM + labor)?

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[dalton108]

Don't you need equipment to produce vehicles? And isn't that what depreciates? So what definition are you applying for gross margin profitable? Some assumed volume (would be profitable at X volume)? General Motors' variable costs only (sales price > BOM + labor)?

Hey ChatGPT 4.5, who’s correct?

—

Final Verdict:

Original “finance professor” claim regarding Tesla never having negative gross margins: False.

Second person’s rebuttal that Tesla had negative margins during ramp-up periods: True and accurately sourced.

—

*The shade and tyranny of the ai basically using quotation fingers! ?

 

[HaulingAss]

Just wanted to thank you for taking time to write this informative response, I know you didn' have to. I love replies like this and unfortunately their appearance are few and far between.

Except that it's factually incorrect in numerous instances and states as a fact other things that do not have sufficient data to back it up. Unless @PungoteagueDave is an insider in multiple automakers, he has stated facts that cannot be supported. Sorry, I don't have the time right now to detail. It gets complicated and there are many very real grey areas in corporate accounting. It's not as cut and dried as he presents it. GAAP accounting fails to clear up all the grey areas (and GAAP accounting itself can introduce distortions that don't need to exist using more straightforward accounting principles).

 

[HaulingAss]

Don't you need equipment to produce vehicles? And isn't that what depreciates? So what definition are you applying for gross margin profitable? Some assumed volume (would be profitable at X volume)? General Motors' variable costs only (sales price > BOM + labor)?

Exactly. Just one problem of many.

 

[HaulingAss]

Again, mixing numbers - confusing individual car margins with marginal profitability that includes non-vehicle costs. Note the comment on depreciation - includes costs that have nothing to do with the actual cost of producing a vehicle

Your comments show that you don't understand even basic accounting principles when it comes to calculating gross profit.

Equipment like stamping molds have a finite lifespan in terms of lifetime unit volume. They are considered wear parts and those parts must be depreciated over the expected useful life to calculate gross profitability.

 

[HaulingAss]

That meant ignoring fixed costs like plant overhead and only including per vehicle costs like BOM, labor, and per shot tool amortization. Theoretically, that means making more vehicle earns them more money; however, they also included credits in the calculation so it's not guaranteed.
Full gross margin means you make money from having a vehicle product. In other words, the variable profit * sold units > fixed manufacturing costs. When gross margin * units sold > operating costs, the company is profitable.

Including credit sales in vehicle revenue is a grey area. That said, because the credits are created with the creation of each additional EV, it makes the most sense to consider the revenue from them as auto revenue. Because the cost of the sale itself is essentially zero and the credit doesn't exist without building the EV.

But you will never get everyone to agree on this point, so I quit trying.

 

[DonSteve]

For those who ordered theirs, did you get your refund yet? Mine still hasn't come through

I have not received my refund yet.

 

[Cyberfamily]

We got our refund three days ago.

 

[mongo]

Including credit sales in vehicle revenue is a grey area. That said, because the credits are created with the creation of each additional EV, it makes the most sense to consider the revenue from them as auto revenue. Because the cost of the sale itself is essentially zero and the credit doesn't exist without building the EV.

But you will never get everyone to agree on this point, so I quit trying.

Yah, but in the discussion of a vehicle on its own being profitable, it's probably more accurate to leave them out.
Credits are valid for the business case, but don't impact sales price vs cogs. Can be profitable due to selling cars even if the cars are not profitable.

 

[CT_AZ_4x4]

I have not received my refund yet.

Neither have I. I’m so disappointed by this decision. It totally screws my plans to pull an Airstream long distances in the Western US even in winter.

 

[Choosing Wonder]

Neither have I. I’m so disappointed by this decision. It totally screws my plans to pull an Airstream long distances in the Western US even in winter.

Ruined my RV towing plans, too! Post your thoughts about this on x.com under Elon's posts, reply to the one about the cybertruck is made with love. here is my response as I thought I could put in terms he would understand:



@elonmusk @Tesla what if you bought a Rocketship that was sold with the promise to go to Mars, but then AFTER you bought it they "cancel" the range extender power that would get you there! And you can't fix/mod it! You just did that to me/Cybertruck Owners!

 

[BigWaveDragon]

So, I have had a CT reservation since about 5 days after the reveal. When I leaned about the range extender, knowing Tesla, I decided to wait until it would be installed and delivered on delivery of the vehicle. I want to tow a larger travel trailer 6 month out of the year, so Range is essential for me.

I really like the CT, but without an option for 450+ mile range, I cannot move forward with a CT purchase.

 

[HaulingAss]

Yah, but in the discussion of a vehicle on its own being profitable, it's probably more accurate to leave them out.
Credits are valid for the business case, but don't impact sales price vs cogs. Can be profitable due to selling cars even if the cars are not profitable.

Sales price is not the only source of revenues from manufacture of EVs. There are also regulatory credits you earn when you sell zero emission EVs.

The only valid reason for excluding regulatory credits from EV revenue is that regulatory credits will eventually diminish and go away over time. Different analysts will chose different methods when it comes to accounting for regulatory credits. My preferred method is to count them as real revenue now, but discount them over time. That said, they have been a lot more persistant than the Tesla naysayers said they would be. By a lot!

The story the Tesla naysayers told back in 2018 is that legacy auto would pumping out so many excellent and low-cost EVs by 2020 that the regulatory credits would not have enough of a market to be worth much at all. But reality is a funny thing. Here we are, 7 years later and Tesla's regulatory credits are worth more than ever! The value did not dimish as predicted by the Tesla naysayers. Legacy auto still only produces small numbers of EVs, not enough to put a decent sized dent in their need to purchase regulatory credits on the open market. And recent decisions by legacy automakers to focus on ICE and hybrids make clear that Tesla's regulatory credits will have significant value for years to come.

The Tesla naysayers were wrong again!

 

[scottf200]

Neither have I. I’m so disappointed by this decision. It totally screws my plans to pull an Airstream long distances in the Western US even in winter.

Ruined my RV towing plans, too!

I want to tow a larger travel trailer 6 month out of the year, so Range is essential for me.

Seems there are only a couple of genuine towing options ...

 

[mongo]

Seems there are only a couple of genuine towing options ...

I think you also need to add payload and towing limits. Then payload assuming 10% tongue weight of standardized trailer.
It's also iffy to use the same Wh/mile with trailer when the base vehicles have different Wh/mile. Ignoring truck-trailer specific aerodynamic interaction, the trailer should add the same Wh/mile to each vehicle.

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