In previous articles, I have already discussed in detail how Tesla can achieve a break-even level with the Model 3. I have also discussed the variable unit cost of capital per Model 3, and I have gone to great length discussing the variable unit cost of labor per Model 3. Today, I would like to discuss the fixed unit cost of materials of Model 3.
A couple of weeks ago, I made an EPS prediction for Tesla’s second quarter. At the time, I said, “the key disclosure this quarter will be the number of cars produced. I am expecting almost twice as many cars produced in the 2nd quarter compared to the first quarter. My EPS prediction relies on cars produced.”
On Wednesday, May 9, 2018, history was made. The California Energy Commission unanimously approved the requirement that all new homes and low-rise apartments built from 2020 onwards include solar panels. The approval was supported by builders, utilities, and solar manufacturers. Now, say it with me — hip hip hooray! 😀
I am making an earnings per share (EPS) prediction only for the Tesla automotive segment, excluding leasing, since I think Wall Street is way too negative on Tesla.
In the last two articles (that I wrote exclusively for CleanTechnica), I explored Tesla’s break-even level and its cost of capital. On this occasion, I would like to explore Tesla’s cost of labor.
During Tesla’s last conference call, concerning the first quarter of 2018, Mr. Deepak Ahuja, Tesla’s Chief Financial Officer (CFO), while answering a question from Rod Lache, an analyst at Deutsche Bank Securities, Inc., said: “Rod, we are very CapEx-efficient, overall. Let me just start from that point. And if we look at our depreciation costs on a per unit basis at steady run rate of 5,000 or so cars per week, we are in my mind well below most of our competitors – well below $2,000 per unit depreciation cost.”
Tesla is Very Close to Break-Even Point. We crunch the numbers.
