Author: erickosak

Peeking Behind Tesla’s Cost of Materials Curtain

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.

Peeking Behind Tesla’s Capital Curtain

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.”