Tesla, with a net profit five times that of BYD and a net profit of 50,000 per vehicle, can’t beat Ideal and SERES?

How much money can a manufacturer make from selling a car? It doesn't seem like much.

In 2023, BYD sold 3 million new energy vehicles with a net profit of 30.04 billion yuan, equivalent to 9,933 yuan per vehicle, less than 10,000 yuan.

This is still the level of the leading company. At present, except for Ideal, most domestic new energy manufacturers are in a loss-making state. It is not unfair to say that they are losing money to gain publicity.

This is the irony of online public opinion. While netizens are saying that new energy vehicles are backward industrial products with no technological content, they are also finding that manufacturers around the world are really rushing forward with losses.

In fact, if you simply use your brain you won't be led by the trend. If it is really an outdated product, why would so many manufacturers including Europe, America, Japan and South Korea continue to invest in it?

So, are there any manufacturers that are particularly profitable? Tesla may be one of the few. According to calculations by Nikkei Asia, Tesla's net profit per vehicle in the past year was as high as 50,000 yuan, which is five times that of BYD, and also exceeds famous luxury brands such as Mercedes-Benz, BMW, and Audi.

Why are Tesla's profit margins so high?

First of all, we need to understand how the "profit per vehicle" is calculated. The most commonly used calculation method in the industry is to divide the net profit in a certain period by the sales volume, and the resulting value is the net profit per vehicle.

This calculation method is simple and crude, and does not necessarily reflect the actual operating conditions of a car brand. For example, Tesla's total revenue includes not only car sales revenue, but also energy storage business revenue, FSD software revenue, subsidy revenue, etc. In addition, tariffs in different countries are not the same, and these are all "off-market" factors.

However, the profit per bike indicator is still of great reference value. Manufacturers with high profits can be regarded as having "strong earning power" to a certain extent.

The question is, why is Tesla so profitable?

In fact, there are only two factors that determine a brand's high net profit: first, high revenue; second, low cost. Tesla's performance is outstanding in both aspects.

Tesla currently has a total of four models on sale, namely Model 3, Model Y, Model S, and Model X. Model 3 and Model Y contribute more than 90% of sales.

In the Chinese market, the price of Model 3 is RMB 231,900-335,900, and the price of Model Y is RMB 249,900-354,900, both of which are mid-to-high-end models. In overseas markets, Tesla's price is even higher. When conducting industry analysis, many overseas automotive media directly classified Tesla as a luxury brand, on par with BMW and Mercedes-Benz.

At the same time, Tesla's sales volume has remained high.

In the past two years, Tesla has been the world's second largest new energy vehicle manufacturer after BYD, with cumulative deliveries reaching 1.81 million vehicles in 2023. The huge sales volume means that Tesla has greater bargaining power when purchasing parts, which can greatly reduce Tesla's vehicle costs.

In addition, Tesla also saves as much as possible in terms of materials. Sitting in its cockpit, you will have a "bare" feeling, so it is nicknamed "rough house" by netizens. The minimalist interior design is indeed easy to cause controversy among users, but it can indeed greatly reduce costs.

However, Tesla's main cost reduction comes from innovations in production processes. The extensive use of integrated die-cast components not only reduces the number of processes but also reduces material costs.

For example, the Shanghai Super Factory, which uses this process, can reduce the number of Model Y front and rear floor parts from 171 to 2, and the number of welding points is reduced by more than 1,600. Some experts believe that through this process, Tesla can reduce the cost of each car by 3,000 to 4,000 yuan.

Of course, the reason why Tesla has become one of the few electric car manufacturers in the world with stable profits is related to its own strong strength and its business strategy of taking root in China. It is well known that before the Shanghai Super Factory went into production, Tesla was essentially no different from other new car manufacturers in the United States. They all suffered losses for many years and could not deliver on time. However, since the Shanghai Super Factory went into production, its delivery capacity has been greatly improved, instantly widening the gap with other manufacturers.

At the same time, Tesla also relies on China's powerful new energy vehicle supply chain to purchase a large number of Chinese local parts. According to authoritative analysis, only a small number of Tesla parts such as chips and electronic controls are not provided by China. The localization rate is close to 100%, which is higher than most Chinese local brands. With such conditions, Tesla's cost in developing electric vehicles is much lower than other European and American brands.

Moreover, contrary to many people's inherent impression, Tesla is not a very aggressive manufacturer in upgrading. Its two main models, Model 3 and Model Y, have hardly undergone major upgrades from their launch to the present, except for minor repairs, which has saved it a lot of R&D costs.

This is equivalent to Tesla completing the construction of its product lineup before 2019, and then in the following five years, just like the GL8 more than ten years ago, it can continue to generate gold coins without any modification, and the marginal cost is very low. This kind of gameplay is actually very close to that of Internet companies. Managing a large App is like cooking a small fresh dish. The fundamental thing is not to change it. After the successful development of an App that can be called a money-printing machine, a major modification is a taboo for businesses.

What makes Tesla different from other car companies is that it has a boss like Musk who brings his own traffic. So far, Tesla still insists on not placing any advertisements, and its product marketing relies almost entirely on the traffic brought by Musk, and this traffic is completely free, which saves Tesla a lot of marketing costs.

We can compare it to NIO, a new domestic car manufacturer, which has lost more than 86 billion yuan in the six years since its listing. In 2023, NIO's marketing expenses and R&D expenses were equal, both reaching more than 10 billion yuan; and although Xiaomi also has Lei Jun, a boss with his own traffic, Xiaomi also spent a lot of money on hot searches and other publicity expenses in the month before and after the launch of Xiaomi SU7.

This money can be saved at Tesla.

Taking into account the combined effect of various factors, it is no surprise that Tesla's per-vehicle net profit ranks first in the industry.

However, Tesla is not without crisis, and there is no need to deify Tesla because of this. High net profit per vehicle does not mean that it can lead the development of the industry, nor does it mean that its model is omnipotent.

In the first quarter of 2024, Tesla's net profit was US$1.144 billion, and the cumulative deliveries were 386,000 vehicles. A simple calculation shows that Tesla's net profit per vehicle has dropped to around US$3,000, which is roughly equivalent to RMB 21,000.

Is it true that no other brand can match the net profit of this bicycle?

In 2023, Ideal Auto will have a full-year net profit of 11.81 billion yuan, deliver 376,000 vehicles, and have a per-vehicle net profit of more than 30,000 yuan. High per-vehicle net profit is not an unattainable achievement.

In fact, Tesla's current gross profit margin has lagged far behind that of BYD and other manufacturers. In the first quarter of 2024, Tesla's gross profit margin was only 17.4%, while BYD's gross profit margin reached 21.9% and Ideal Auto's gross profit margin was 20.9%.

In addition, SERES also achieved profitability in the first quarter. With the completion of Huawei's early R&D investment and the continuous increase in sales, by the end of 2024, SERES's per-vehicle profit may reach a relatively high level.

Overseas media have always liked to praise Tesla. On the one hand, it is because Tesla is the only new energy manufacturer outside of China that can show off its strength. On the other hand, due to reasons such as trade protection, they have not really felt the iron fist wielded by Chinese new energy manufacturers.

In fact, Musk can't smile at such a single-vehicle profit. Tesla's sales in the first quarter of this year were only 387,000 vehicles, down 8.53% year-on-year. At the same time, Tesla has been slow to come up with more main models, and the progress of 4680 batteries and FSD systems is far below expectations, all of which cast a lot of uncertainty on Tesla's future.

Large automobile manufacturers compete mainly on scale. If the scale cannot be continuously improved, high net profit per vehicle will not be of much significance in the long run, and they will be easily eliminated. After all, Tesla is not Ferrari, but an electric car brand for the general public.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.