Tesla is still making a lot of money by cutting prices, how can other electric car brands respond?

Mondo Cars Updated on 2024-02-26

DRIVE CHINA, Feb. 26, 2024 (GLOBE NEWSWIRE) -- Recently, a user posted a post on social platform X comparing Tesla's gross profit per vehicle with that of other major electric vehicle manufacturers, which attracted widespread attention. The data shows that despite Tesla's multiple price cuts, its gross profit per vehicle is still as high as $7,000, compared to BYD's gross profit per vehicle of $1,300, while companies such as NIO, Ford, Rivian and Lucid all have negative gross profits. This phenomenon has sparked an in-depth discussion in the industry about Tesla's profitability and market positioning.

Tesla's earnings data stands out in the industry. Although BYD's pure electric vehicle sales in the fourth quarter of 2023 reached 52640,000 units, with annual sales of 157480,000 units, surpassing Tesla to become the leader of the global electric vehicle market, but in terms of gross profit per vehicle, BYD is still nearly five times behind Tesla. Tesla CEO Elon Musk said: "It's funny. He also added that Tesla's positioning is closer to that of an AI robotics company than car companies.

Behind Tesla's high profits is its unique business model and technological innovation. Tesla is not just an automaker, it's an energy solutions provider that includes electric vehicles, solar products, and energy storage systems. This diversified business structure has allowed Tesla to be profitable in multiple areas, not just relying on car sales.

In addition, Tesla's investment in self-driving technology also gives it a long-term strategic advantage. Musk has repeatedly emphasized that Tesla's core competitiveness lies in the combination of its software and hardware, which not only refers to the vehicle itself, but also includes automation and intelligence in the entire production process. Tesla's Autopilot and Full Self-Driving (FSD) suites, while still under development and refinement, have already generated significant revenue for the company.

In terms of marketing strategy, Tesla's direct sales model has also saved it a lot of dealer fees and marketing expenses. Tesla communicates directly with consumers through online sales and experience stores, which not only reduces costs, but also improves efficiency.

However, Tesla's success has not been without its challenges. As more and more traditional automakers and emerging EV players enter the market, competition is becoming increasingly fierce. While Tesla is expanding its market share, it also needs to continuously improve product quality and service to maintain its leading position.

Overall, Tesla's profitability and market positioning reflect its leading position in the electric vehicle industry. Musk sees Tesla as an AI robotics company, which not only reflects Tesla's ambitions in technological innovation, but also indicates the company's future development direction. With the continuous progress of technology and the further development of the market, whether Tesla can continue to maintain its position as an industry leader will be an important point of competition in the future electric vehicle market.

In this race in the electric vehicle industry, Tesla's high profits and Musk's strategic vision have undoubtedly won it valuable time and space. In the future, whether Tesla can continue to maintain its profitability and how to maintain its leading position in the fierce market competition will be the focus of attention in the industry.

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