Tesla may be the rising star of America’s auto sector, but for the longest time Detroit giants General Motors and Ford have had significant advantages over their younger rival. Ford and General Motors still tend to offer far more vehicles each quarter than Tesla, and they also tend to make more money than the electric car maker. The latter is no longer true.
During the first quarter, Tesla reported net income of $3.31 billion, which is a 658% year-over-year increase. In the first quarter of 2021, Tesla earned $438 million. By comparison, GM reported net profit of $2.93 billion in the first quarter, down 3.04% year over year. Ford, despite the success of cars like the Mustang Mach-E and the power of its F-Series, posted a net loss of $3.1 billion in the first quarter of 2022, in part due to its investment in electric truck maker Rivian.
Tesla already dominates its US-born peers in the auto sector by market capitalization, with the company currently valued at more than $900 billion, after a major pullback likely exacerbated by CEO Elon Musk’s recent sale of TSLA. General Motors’ market capitalization is currently $56.57 billion, while Ford is currently worth $59.24 billion.
It should be noted that Ford and General Motors still delivered significantly more cars than Tesla in the first quarter. The electric vehicle maker announced that it delivered 310,048 vehicles in the first quarter of 2022, which is still far from Ford’s 970,000 vehicles and General Motors’ 1.427 million vehicles. Despite offering fewer cars, Tesla still made more profits than its more experienced competitors in Detroit.
to me streetTesla was able to achieve this due to a variety of factors. One such factor is the company’s adjusted EBITDA margin in the first quarter of 2012, which rose to 26.8% in the first quarter from 17.7% last year. GM’s adjusted margin was 11.2% in the first quarter, while Ford posted an adjusted EBIT margin of 6.7%.
Tesla appears to have accomplished this through a variety of new strategies. One such saving can be said to be the company’s savings on traditional advertising. Tesla spends $0 on advertising, relying instead on word of mouth and CEO Elon Musk’s online presence on Twitter to spread its brand image. Ford and GM are big spenders on advertising, with the latter spending $2.22 billion on advertising in 2020, according to statista.
With Tesla now taking the crown for America’s most profitable automaker, there are only a few more EV titles left to claim. One includes the number of vehicles produced and delivered annually, and the other is revenue. Vehicle deliveries and production may take some time because Tesla only has four electric car factories operating today, but in terms of revenue, the electric car maker may get a chance sooner than expected.
In the first quarter, General Motors reported $35.98 billion in revenue, while Ford posted $34.48 billion. Tesla’s revenue for the first quarter of 2022 is listed at $18.76 billion.
Disclaimer: I am a tall TSLA.
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