Just last week, Tesla released its earnings report for the first quarter of 2022. According to the financial report data, Tesla's total revenue of the first boarding house was $18.756 billion, an increase of 81% over the same period last year; Tesla's net profit was $3.318 billion, an increase of 658% over the same period last year. Why is it that in this special period of rising raw material prices and policy tightening, Tesla can still create revenue that far exceeds others?
Far more than other people's bicycle profits
If you compare the 2022 Q1 financial report data with the 2021 Q4 financial report data, you will find that Tesla's sales have only risen from about 300,000 to about 310,000 vehicles, while profits have risen from $2.32 billion to $3.32 billion. Tesla's profit has increased significantly in the absence of a significant increase in sales, which can only show that Tesla's bicycle profit has increased significantly.
According to the financial report data, Tesla is still leading the way in the global car companies in terms of bicycle gross profit margin. In the first quarter of 2022, tesla vehicle gross profit margin was 32.9%, an increase of 6.36 percentage points year-on-year, far more than BMW and Mercedes-Benz. Tesla's pre-tax profit on average electric vehicles delivered in the first quarter rose more than 60 percent to $16,203 compared to the same period last year.
Wei Xiaoli, which is also a new energy vehicle brand, is also far inferior to Tesla in terms of bicycle profits. In the data of the first quarter of 2022, WEILAI Automobile's bicycle profit was 21.1%, ideal car was 20.6%, and Xiaopeng Automobile was even worse, with a bicycle profit of only 11.5%. Compared with Tesla, there is still a big gap.
What caused Tesla's profits to skyrocket?
The first is the increase in the price of raw materials. Yes, the first reason for Tesla's soaring profits is the price of raw materials. Tesla has always pursued the "law of cost pricing", which is the main reason why many consumers have no complaints about Tesla's price increase. That is, according to the fluctuation of supply chain price and transportation price, the price of the vehicle is determined. And this year, because of battery supply, raw material price increases, policy changes and other reasons, domestic Tesla has a three-time price increase in a week. Even Musk himself admitted on the conference call that the direct cause of the sharp profit surge was multiple price increases.
However, the original intention of the cost pricing law should be to set the price according to the fluctuation of cost while keeping the profit unchanged. Tesla's increasingly high bicycle profits obviously do not meet the original meaning of the cost pricing law. The explanation given by Musk is that because too many orders have been scheduled for next year, the pricing currently given includes material costs and transportation costs that may rise in the next 6-12 months. What does that mean? It's Tesla's pricing now and includes costs that could rise in the next 6-12 months.
The second is cost control. It is undeniable that Tesla is very strong in cost control and management. In the industrial field, there is a phenomenon that the more output, the lower the cost, which is often referred to as "output sharing cost". The simple understanding is that as production increases, Tesla's car manufacturing costs have been declining. Coupled with its strong management capabilities, Tesla can operate in the most cost-effective way. From the financial report, Tesla's excellent management ability can be seen in the warehouse for only three days at most.
Finally, there is the reduction, which has always been one of Tesla's ways to control costs. From the famous "cancel the dashboard", "cancel the kinetic energy recovery force control function" to the recent "cancel the charging cable", "cancel the trunk escape device", etc., many times Tesla will not reduce the price when reducing the allocation, which also saves Tesla a lot of costs.
summary
Under the "cost pricing law", Tesla can easily pass on its own cost increases to consumers. Musk's explanation, in particular, seems to make sense, but if you think about it carefully, you will find a question. Why do consumers buy a car now, but they have to bear the cost increase after 6-12 months? Since Tesla can't solve so many orders now, why continue to accept orders and then pass on the cost increases that may be encountered in the future to consumers? And if after 6-12 months, the cost has not risen but has declined, then what should the main prepaid prepaid car with a rising cost? Obviously, Tesla's "cost pricing law" is not equal to the "cost pricing" in consumer understanding.