Tesla makes 8 times as much profit per car as Toyota – paultan.org

American electric vehicle maker Tesla makes eight times the profit margin per car sold compared to Japanese manufacturer Toyota, according to a report by Nikkei Asia.

Tesla reported Q3 2022 net profit of US$3.29 billion (RM14.9 billion) while Toyota stated that it made a net profit of US$3.15 billion (RM14.3 billion) for the same period, Teslarati reported.

Toyota’s comparative lack of profitability per car sold was due to several scenarios which required unforeseen spending by the Japanese manufacturer, according to Teslarati. High operating costs sustained by Toyota were due to sharply rising electricity prices, along with increases in material costs which led to Toyota’s vastly increased spending in Q3 2022, thus reducing its operating profit to just over US$3 billion (RM13.6 billion).

In terms of profitability margins in China, Tesla saw gross margins of 39% and 29.4% for its Model 3 and Model Y EVs, respectively, while the American carmaker’s gross margin globally was 27.9% in the third quarter of 2022, which was the same as that of the preceding second quarter in the year.

Certainly, Tesla is on a much smaller scale when compared to Toyota, as the former reported 936,000 vehicle deliveries in 2021 while the latter reported 9.51 million vehicle deliveries last year (financial year ending March 2022; it sold almost 10.5 million vehicles between January and December 2021).

In terms of profit per vehicle sold in the third quarter, Tesla made US$9,570 (RM43,495) per vehicle, while Toyota made around US$1,200 (RM5,454) per vehicle, according to analysis by Nikkei Asia as reported by Teslarati.

“The biggest factor behind Tesla’s profit growth is sales volume, then price hikes and a rise in self-driving software sales,” SBI Securities analyst Koji Endo was reported as saying. Tesla has also been reducing costs from manufacturing with Giga Press die casting press machines that enabled a significant reduction in the number of parts, thus reducing production times and improving efficiency.

Inside EVs cites an example where a rear section of the Model Y frame was made of 70 individual pieces previously, and the use of the Giga Press had reduced that number to just one. The Giga Press machine had also enabled Tesla to eliminate around 300 robots from the production line for the assembly of said 70 parts; the machine will also be used in the manufacture of the upcoming Cybertruck.

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