Profit Margin On Cars
Models S, 3, X, Y. The most expensive of them is the Model X. Around $99,900 for this car. Then, Model S at $90,000. Model Y at $55,000. And Model 3, the most sold Tesla car, it’s also the cheapest Tesla car, at $42,000. It’s being expected that Tesla would soon introduce the Model 3 in India But in India, it will cost around ₹7 million. It will be the cheapest model of Tesla.
One thing is for sure, that Tesla cars come in the high-end luxury category. If you look at this chart you’d know the volume of sales of each model. Generally, the Tesla Model X and S are around 10,000. And Tesla Model 3 at 90,000. This chart is for the quarterly deliveries. What is Tesla’s profit margin in selling one car?
To have a fair estimate, we can look at the Automotive Gross Margin. It is the overall sales minus the manufacturing cost. For Tesla, this is at 30.5%. It is believed to be a very high profit margin. In comparison, in the past, it used to be around 27%. And now it has crossed 30%. It has seen good growth too. And if you compare it to the other car companies, it is more than in most companies. Even BMW and Mercedes don’t get such a high profit margin. For most car companies, it is in the 15%-20% range.
In fact, this margin of more than 30%, is only for the high-end extreme luxury brands. Like Porsche or Ferrari. Selling cars is the main source of revenue for Tesla. Most of the revenue earned by Tesla, is from the car sales. But it is not the only source of revenue.
