Tesla’s earning report last week showed record growth in profitability and vehicle production and output, despite the volatility of 2021.
A key part of making that happen? Reduction in vehicle costs and ramping up levels of production.
The electric vehicle company managed to increase production of cars to 305,840 in the Q4 2021, showing 83% growth compared to the same period last year, according to its earnings reports. On top of that, Tesla managed to nearly double profits from its automotive business, from approximately $7 billion to nearly $14 billion in 2021.
An important driver, Tesla says in its earnings report, was a decrease in vehicle production costs. In fact, the average cost of making a Tesla vehicle fell to just $36,000 in both Q3 and Q4 2021. The figure is denoted as COGS (cost of goods sold) in the earnings report, which means it only takes into account the direct cost of producing the vehicle and not the cost of sales and marketing, which could add to those expenses.
SUBSCRIBE TO OUR NEWSLETTER: The Daily Money delivers our top personal finance stories to your inbox
In fact, the cost of making the average Tesla vehicle is far below the sticker price of even its cheapest model. A base Model 3 sedan costs $40,690, while its higher-end Model S starts at $89,500 and the top-of-the-line Model X SUV goes for nearly $100,000.
“Tesla delivered stellar top and bottom-line results which beat expectations across the board with major EV demand tailwinds…
