Tesla Is Now Merely the Fourth Most Profitable Automaker in the World as Elon Musk Prepares the Ground for an Epic Distraction
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May the odds be ever in your favor. This iconic phrase from The Hunger Games applies as much to Elon Musk's upcoming cage match with Mark Zuckerberg as it does to Tesla's floundering global rankings, replete with promises of an unmatched theatrical spectacle in the former's case while brimming with all of the angst and melancholy associated with the loss of face in the case of the latter.
2022: $TSLA most profitable carmaker. Q2: drops to 4th. Ex-credits, to 7th (LEFT). $TSLA cut prices while most rivals hiked (RIGHT).
Truly pathetic, yet $TSLA has 2x'd. Street sees 2024 EPS +44%. This is unlikely, given rivals' strength.
See the report in my pinned tweet pic.twitter.com/jgftvl9EJ8
— Motorhead (@BradMunchen) August 10, 2023
We noted in a previous post that Tesla's automotive gross margin fell to 18.10 percent in Q2 2023 on the back of aggressive price cuts and is slated to fall further as Elon Musk continues to show a willingness to sacrifice profit margins to drive volume growth, banking on the eventual solution to the FSD conundrum to drive much higher profits in the long run. However, the full carnage of Tesla's strategy becomes evident when one looks at the pre-tax profit margin. This metric has fallen from 19.30 percent in Q2 2022 to just 11.80 percent in Q2 2023, corresponding to a decline of 7.6 percent and relegating Tesla to merely the fourth most profitable automaker in the world. In fact, no other major automaker has experienced such a sharp drop in its pre-tax margins.
2/17... price cuts/incentives, $TSLA saw the lowest level of Shanghai plant sales in 7 months. In fact,
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