Skip to main content

Tesla has ‘waning marketability’ but still makes 5X more per vehicle than GM, Ford: Report

How Tesla's EV competition stacks up

Tesla autopilot

It’s a script we’ve seen time and time again. When the first big name becomes known for something, we as a society embrace and obsess about it for a while, and then slowly, we lose interest around the same time new competitors enter the once-monopolized market. For example, Ray Kroc helped introduce the world to McDonald’s, and we reveled in french fries and milkshakes until Burger King, Wendy’s, and a few dozen others tried to either step up their game or begin playing. Slowly, the once unimaginable profit margins the Golden Arches saw had to get trimmed to allow Micky D to stay at the head of the pack. Though neither is the first to do what they did, like McDonald’s, Tesla has become the face of its industry. And also similarly, Elon Musk’s company is beginning to feel the slow shift in profit that real competition brings.

tesla cybertruck
Tesla / Tesla

Tesla hasn’t had much competition until now

Let’s face it: until very recently, Tesla has had very little in the way of genuine competition in the EV sector. Over the last decade, even the big three American companies have barely been able to grab any appreciable portion of the EV pie other than in the truck realm. A big reason is that Tesla isn’t a part of that market due to Elon’s geometric Mad Max Cybertruck being delayed since 2022.

However, with the advent of the Kia EV6, VW ID.4, Chevy Bolt, and Ford Mustang Mach-E, among others, the competition is proving far more formidable than ever. According to The Motley Fool, Tesla is still the champ of the EV world, but its future may be on the ropes.

Tesla's lineup of electric vehicles lined up in front of chargers in a parking lot with trees in the back.

Tesla makes $8,431 per car, and that’s a dropoff

After crunching all the numbers, Tesla currently makes $8,431 of gross profit per car sold. And while that number is still significantly higher (more than three times higher) than Ford or GM pull in per car, it actually represents a bad sign for Musk’s shareholders. In the first quarter of 2022, Tesla was raking in an incredible $17,865 of gross profit, which is more than double what it makes today.

While Musk did defend his company’s earnings decline by citing that high-interest rates amid a slow economy have affected all car companies (and he is correct), the issue is that overall EV sales in the U.S., as well as all over the world, have risen over the last quarter despite the economic hardships Musk mentioned. This means that the electric world is shifting, and new potential EV customers are finally beginning to look elsewhere for that new plug-in.

tesla model 3
Tesla / Tesla

Tesla is still the biggest name in EV

But, if you have a portfolio laden with Tesla stock, fear not. There is still a large gap between Tesla and everyone else. The industry standard for per-car profits is right around $3,000, so the mighty may have tripped, but they have not fallen just yet.

Much like Burger Chef, Henry’s Hamburgers, or, more recently, Quiznos and Boston Market have all come and gone (or are going) to challenge McDonald’s, Tesla is beginning to feel the heat of real competition. But that can be a good thing. To stay on top, they will have to push themselves harder than perhaps they would have, with no real threat looming over them. The only real question on the horizon now is: Will the Cybertruck be Tesla’s Arch Deluxe or the McRib?

Editors' Recommendations

Lou Ruggieri
A lifelong lover of cars, Lou contributes to Motor Trend, Hot Cars, Auto & Truck Connection, and the PowerAutoMedia Group.
Tesla Model 3 refresh brings new colors, interior, and more
Tesla Model 3 updates impress
Tesla Model 3 Highland refresh two cars, one red one gray, both headed the same way on a highway.

A recent refresh of the 2024 Telsa Model 3 EV includes new colors, upgraded wheels, and updated exterior and interior design. Tesla reduced Model 3 and Model Y prices twice last fall, and those prices hold for the refreshed Model 3. The rear-wheel drive Model 3 starting price is $38,990. The Model 3 Long Range, the dual-motor version with all-wheel drive, starts at $45,990.

The new Model 3 is available for order on Tesla's website, with delivery from January through March, depending on configuration and color. It's worth mentioning upfront that Tesla changes prices up and down more frequently than most automakers. Tesla has not made any statements about introductory pricing, but if demand increases significantly for the new Model 3 version, Tesla could raise the prices anytime.

Read more
Consumer Reports study makes a strong case for why you should not buy an electric car or plug-in hybrid car
Gas-powered cars are still far more reliable, it seems
Electric vehicles charging.

A few short years ago, siblings in the back of cars would have to rely on made-up games like counting red cars to pass the time on long road trips. Today, with the number of in-car screens and WiFi hotspots, it would be a surprise if kids even look out the windows of a car anymore. But, if counting games were still a thing, then 'Spot the electric car' would undoubtedly be an extremely time-consuming activity.

The EV revolution is alive and well, but we seem to forget that, like those children, most of the technology behind this hard-charging movement is still in its infancy and, thus, prone to reliability issues. Consumer Reports has released a study that proves that both EVs and PHEVs are far less reliable than the gas-powered cars they are trying to replace.

Read more
Tesla recalls more than 2 million vehicles: Everything you need to know about the latest Tesla recall
Is your Tesla affected?
Red Tesla Model 3

In a recall filed with the National Highway Traffic Safety Administration (NHTSA), Tesla is bringing back a total of 2,031,220 vehicles harking all the way back to 2012.

The issue relates to every car made with any version of Tesla's Autosteer technology. In describing the defect, documents submitted to the NHTSA state:

Read more