Tesla’s death is “not close” says Musk, as operating margin drops to 2%

As Elon Musk helps undo regulations, regulatory credits keep Tesla profitable.

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[Uragan]

Wanna know something really wild? Tesla sold only 6k Cybertrucks in Q1 and lost the lead for selling the most truck BEVs to Ford.

That 6k is less than what they sold during Q4 2024, which was less than what they sold in Q3 2024. If they maintain selling 6k Cybertrucks each quarter for 2025... they will have sold less than 10% of the promised 250k a year that Musk stated when the Cybertruck finally released... late.

 

[orwelldesign]

It’s not a mystery that government production is inefficient. Most of modern history shows this, again and again. It’s due to the lack of incentive structure. You could read the Rise and Fall of Communism by Archie Brown, to start. This is like a commonplace observation I’m surprised is now in dispute here. And yes my sample size is larger and less skewed than the news media I’ve seen and my reasoning is less motivated.

Governments' job isn't "production," it's society. The common good. Socialism. Is. Society. (And vice versa!)

Literally everywhere the "markets only" crowd has ran things, things fall apart. Because "helping our neighbors" is righteous.

Do you drive on public roads? Ever needed the fire department or the police? Etc. There's so much socialism in running a society that anyone opposed to it is a fool.

 

[ducatisymphony]

It was tongue-in-cheek, although I used to be one before I recognized the labor theory of value is bunk. Supply and demand is the only essential concept needed to understand disparities in prices and wages, as well as the understanding that competition drives prosperity at every level and must be maintained artificially, that all companies/organizations (including government and nonprofits) as a law have a primary aim to grow as much as possible, and that government is the most monopolistic form of organization and must be carefully kept in check. Left and right are constantly shifting and have limited use as concepts as I’ve never met anyone I agree with on everything.

Ohhhhh the hilarity of claiming a "tongue-in-cheek" reference to yourself as a leftist while also claiming to have been one before....especially as a response to me pointing out that nobody on the left would ever use that term as far as I am aware.

Care to point out any successful example of an implementation of your dream economic model?

Also, the shifting of left and right is called the Overton Window and we are all aware of it, this is not some brilliant observation on your behalf. Pointing out that you have never met anyone you agree on everything with doesn't make you unique either.....simply human (maybe?).

 

[ranthog]

It’s not a mystery that government production is inefficient. Most of modern history shows this, again and again. It’s due to the lack of incentive structure. You could read the Rise and Fall of Communism by Archie Brown, to start. This is like a commonplace observation I’m surprised is now in dispute here. And yes my sample size is larger and less skewed than the news media I’ve seen and my reasoning is less motivated.

What in the world are you off about? No one is suggesting a command economy like what you're talking about.

As far as managing things that the government should be doing like healthcare? Yes, the government is far more efficient. What isn't efficient is the government hiring contractors for things that should be done by employees.

 

[AdrianS]

Are you nuts? Have you ever been inside a 2025 Tesla? They're a decade ahead.

Definitive proof that you're just another boring Musk fanboy out for a troll.

Yawn.

 

[stormcrash]

Binary thinking -- no one is advocating "markets only" and such a thing has never existed. Most roads are maintained by private contractors competing against each other for government contracts.

Your first paragraph is pure propaganda and I have no idea what you mean. Public and private labor both serve "society" and "the common good" to varying extents based on how well they are run; it's quite common for workers in private companies to serve the common good far more significantly and efficiently than those in government. You can actually have too many bureaucrats/administrators, and this is exactly what's plaguing our generation at every level. At some point along the road to secularism, government took the place of the church in the minds of many on "the left" as an organization that could do no wrong and never have too much wealth. Ultimately, it's a class war between the professional managerial class (with wannabee intelligentsia leftists supporting them) and actual producers.

Private labor expects to turn a profit. Only the government can maintain roads regardless of who does the work because they aren't expected to make a profit on the road to cover the cost of it outside the handful of toll roads that pay for their own maintenance, And yet states like Texas are increasingly trying to hand off road development to toll road builders and the results have been a resounding flop

 

[VoidWeaver]

All the major automakers are paying for the development of autonomous vehicles. What do you think GM's Cruise is?

Cruise was arguably the showcase… right up until California yanked its permits after the pedestrian-dragging debacle. GM grounded the entire fleet in October 2023, has since recalled 950 cars, paid new fines, and in December announced it was exiting the robotaxi business to save a-billion-plus a year.

So that once-shiny Exhibit A is now Exhibit 404.

These automakers just aren't selling systems to customers a decade or more before they're ready. So not all that different, is it?

Or until the board pulls the plug. Ford and VW wrote off $2.7 billion when they killed Argo AI in 2022; Ford’s ‘Model e’ now limits itself to Level 2 BlueCruise. Toyota’s AV spend is likewise focused on assist features, not a stand-alone robotaxi network.

Tesla, by contrast, is already shipping its stack to paying customers, and logging >2 billion real-world FSD miles, versus Waymo’s ~50 million rider-only miles. Data still matters in machine-learning land.

The major automakers are petty heavily invested into robotics and the development of such. More capable robots are always of interest to them. Case in point would be that companies like Toyota regularly have demonstrated their robots. So not really all that different, is it?

Demos, yes. Production intent? Not yet.
Tesla is plowing $10 billion this year into AI hardware, including its own Dojo exa-scale supercomputer, while most peers outsource perception to Mobileye and keep the R&D line thin.

Optimus may flop, of course, but no one [outside of China] is even swinging the bat (Boston Dynamics is great though, but no intent of mass production as far as I'm aware.)

So far you have absolutely nothing that other automakers aren't already doing.

Apart from:

• A vertically-integrated silicon → software → fleet loop feeding the largest real-world vision dataset on Earth;
• A custom AI cluster whose cap-ex rivals some national labs;
• A consumer AV product on sale in 42 countries; and
• The only OEM still turning a profit on BEVs while the rest write multi-billion-dollar impairment charges.

If that’s “nothing special,” the bar for special must be orbiting Mars by now.

 

[stormcrash]

Governments are absolutely profit-seeking. City government in particular. As mentioned before, all forms of organization seek to increase in size unless checked. In private enterprise, profits are largely reinvested in production which lowers costs and drives innovation. In government, unallocated spending is rarely returned from departments to the Treasury (until DOGE).

Dude, corporations are exactly the same, every department works to spend all of their budget so it won't get reduced next year, or to justify more next year. You're delusional if you think large corporations are in any way more efficient. They just have the luxury to hide their waste behind a markup on their services charging excess of the actual cost of goods sold

 

[ScifiGeek]

Definitive proof that you're just another boring Musk fanboy out for a troll.

Yawn.

I wouldn't call that definitive. But if you look at his posting history. His most consistent act, is Stanning for Musk.

 

[Snark218]

I fully support that, as a leftist. Why are you supportive of a global hegemon exercising soft power to influence democracies covertly around the world? Especially when we know (or at least I do, as someone with many friends in the nonprofit industrial complex) how corrupt government-funded "non-government" organizations are. When I worked for one, 85% of our donations went to overhead.

“As a leftist” oh for fucksake

 

[stormcrash]

Okay so you actually are arguing for a command economy. Go read a book.

Nice strawman, I said nothing about a command economy, markets drive supply and demand just fine. I SAID that corporations aren't more efficient in some inherent way that makes them better and government wasteful. The "government=waste private corporation=efficient" Schick is the biggest scam ever born out of conservative libertarian propaganda

 

[Tonkaman]

Automakers have R&D to build their next models of cars. Tesla has huge R&D expenses unrelated to its car business that all the other automakers don't have. I don't see Ford spending billions buying Nvidia GPUs. They aren't planning to roll out a taxi network, or sell humanoid robots. It makes no sense to include all those expenses when analyzing Tesla's car division separately.

Sounds like a self inflicted wound to profitably if they are investing in random sectors that are not their core competency. Classic mismanagement.

 

[stormcrash]

Sounds like a self inflicted wound to profitably if they are investing in random sectors that are not their core competency. Classic mismanagement.

They're in the classic stage of the lifecycle of a conglomerate where their chasing of "diversification" and pet projects has led to neglect of what is supposed to be their core competency rendering it uncompetitive due to underinvestment and neglect. See K-mart or Sears buying unrelated businesses to their core, or GE, or RCA, wasting time on side hustles that don't justify the distraction of resources, classic business trap

 

[AusPeter]

Only Orange Man could turn the most zealous leftists into neocons.

[Citation needed]

 

[Tonkaman]

It’s not a mystery that government production is inefficient. Most of modern history shows this, again and again. It’s due to the lack of incentive structure. You could read the Rise and Fall of Communism by Archie Brown, to start. This is like a commonplace observation I’m surprised is now in dispute here. And yes my sample size is larger and less skewed than the news media I’ve seen and my reasoning is less motivated.

It may be a persistent myth, but it's not history. Profit itself is waste, the excess on top of the cost of providing the service. Capitalism is inherently more inefficient than a well run (i.e. not purposely underfunded or hobbled by Republicans) government service.

 

[Tonkaman]

They're in the classic stage of the lifecycle of a conglomerate where their chasing of "diversification" and pet projects has led to neglect of what is supposed to be their core competency rendering it uncompetitive due to underinvestment and neglect. See K-mart or Sears buying unrelated businesses to their core, or GE, or RCA, wasting time on side hustles that don't justify the distraction of resources, classic business trap

But also in typical Silicon Valley mindset, they speedrun the whole cycle. It took decades for General Motors to realize maybe making kitchen ranges and radios isn't the best choice for an automaker.

 

[stormcrash]

Okay so this is just basic misunderstanding. Waste is excess production. Money is not a thing, it's a measure of exchange value. Profit (to the extent that it's just money, unrealized labor allocation power) is not waste, and cannot be, unless it's used wastefully which as I laid out is far more common in the absence of a suitable incentive structure/competition ie. antitrust-regulated capitalism. Also, read some history books on state socialism, like The Rise and Fall of Communism, Privatizing Poland, and study Chinese and Cuban deregulation.

Profit IS inefficiency, it is value extracted in excess of value delivered in terms of material and labor. Competition makes a more efficient market by putting downward pressure on profit either reducing the excess or driving ways to reduce the cost of the good to produce. Nobody but you is straw manning about a command or planned economy, simply pointing out the fact that capitalism contains inefficiencies too and that the government delivering a service is not inherently worse and from certain aspects IS more efficient because it's goal isn't to make an excess profit but either to cover costs like the postal service or to provide a public benefit out of tax revenue

 

[AusPeter]

Cruise was arguably the showcase… right up until California yanked its permits after the pedestrian-dragging debacle. GM grounded the entire fleet in October 2023, has since recalled 950 cars, paid new fines, and in December announced it was exiting the robotaxi business to save a-billion-plus a year.

So that once-shiny Exhibit A is now Exhibit 404.

Or until the board pulls the plug. Ford and VW wrote off $2.7 billion when they killed Argo AI in 2022; Ford’s ‘Model e’ now limits itself to Level 2 BlueCruise. Toyota’s AV spend is likewise focused on assist features, not a stand-alone robotaxi network.

Tesla, by contrast, is already shipping its stack to paying customers, and logging >2 billion real-world FSD miles, versus Waymo’s ~50 million rider-only miles. Data still matters in machine-learning land.

Demos, yes. Production intent? Not yet.
Tesla is plowing $10 billion this year into AI hardware, including its own Dojo exa-scale supercomputer, while most peers outsource perception to Mobileye and keep the R&D line thin.

Optimus may flop, of course, but no one [outside of China] is even swinging the bat (Boston Dynamics is great though, but no intent of mass production as far as I'm aware.)

Apart from:

• A vertically-integrated silicon → software → fleet loop feeding the largest real-world vision dataset on Earth;
• A custom AI cluster whose cap-ex rivals some national labs;
• A consumer AV product on sale in 42 countries; and
• The only OEM still turning a profit on BEVs while the rest write multi-billion-dollar impairment charges.

If that’s “nothing special,” the bar for special must be orbiting Mars by now.

So why do non-Tesla stans say that camera only based systems are inherently flawed for the same reason that human eyes are also inherently flawed for driving? EG when driving into the sun. The sort of scenario where you want your sensor package to be significantly better than a human eye?

 

[stormcrash]

So why do non-Tesla stand say that camera only based systems are inherently flawed for the same reason that human eyes are also inherently flawed for driving? EG when driving into the sun. The sort of scenario where you want your sensor package to be significantly better than a human eye?

Not to mention we also use more than just our eyes to drive, we listen with our ears, feel the road and handling with our touch, feel our internal sense of inertia when changing speed or going around corners etc. "Cameras only" is a demonstrably worse level of sensory input than a human driver, and even parity with human drivers should be a starting point in autonomous systems not the final benchmark.

 

[dobrien75]

Nice strawman, I said nothing about a command economy, markets drive supply and demand just fine. I SAID that corporations aren't more efficient in some inherent way that makes them better and government wasteful. The "government=waste private corporation=efficient" Schick is the biggest scam ever born out of conservative libertarian propaganda

The biggest is trickle-down "economics" but agreed

Having consulted in the banking sector for more than a decade I can confirm the insane inefficiency of corporations. The amount of waste is absurd. Having also consulted for universities and Australia Post (which is kind of government adjacent), the difference is insane. AP are ludicrous in their waste/efficiency management. Same with Unis. Needs must etc etc

 

[Cthel]

How are you supposed to increase supply (lowering the cost to price gap, profit) without the funding (ie. profit) to do so?

The postal service is like the worst example of all. Come on. We subsidize them to deliver junk mail. If they were more efficient, we wouldn't need to subsidize them, and they wouldn't have strong private competition as they do.

If the Post Office was allowed to only service profitable addresses, they wouldn't need "subsidising" either.

But society decided that a universal postal service was a public good worth paying for, so the Post Office was created with a universal service obligation.

 

[orwelldesign]

isn't hampered by unelected judges and bureaucrats embedded in the system.

What the actual fuck? Electing judges is a terrible, horrible, no good way to pick judges. That shouldn't be a popularity contest at all.

Because what ends up happening -- always -- is that judges who follow the law lose to judges who are "tough on crime".

Seriously, electing judges is the stupidest thing in the fucking world. They end up making rulings to suit the election, not the law.

 

[Natetg]

I don't think that can possibly account for the drop in sales, given that automakers usually build up inventory prior to planned shut-downs like this. While it may have had some effect on deliveries, it certainly only explains a very small portion of the drop in sales.

Tesla specifically said in the Q4 earnings call that the Model Y retooling would impact Q1 production and margins. If you think that had only a minor effect, I’d be curious how you square that with their own guidance, especially considering Model Y is their top-volume product across all factories.

 

[AusPeter]

What the actual fuck? Electing judges is a terrible, horrible, no good way to pick judges. That shouldn't be a popularity contest at all.

Because what ends up happening -- always -- is that judges who follow the law lose to judges who are "tough on crime".

Seriously, electing judges is the stupidest thing in the fucking world. They end up making rulings to suit the election, not the law.

You can say the same thing about Sheriffs as well. There is no oversight of them.

 

[stormcrash]

How are you supposed to increase supply (lowering the cost to price gap, profit) without the funding (ie. profit) to do so? You are arguing that profit is evil, which is really the crux of this whole issue, and I'm demonstrating that it's not (rent-seeking is a different story -- that's the venue of tax collectors).

The postal service is like the worst example of all. Come on. We subsidize them to deliver junk mail. If they were more efficient, we wouldn't need to subsidize them, and they wouldn't have strong private competition as they do.

Financing? After which recovering the cost becomes part of the cost of goods sold. There is no inherent right to profit for a company, claiming that they deserve profit is just lazy. Pretty much zero companies reinvest all or even most of their profit back into operations or expansion, or even just some of it into a rainy day fund.

 

[stormcrash]

Sure, Cybertruck inventory might be piling up, but it’s not materially relevant to Q1 results. Model Y is Tesla’s top-selling vehicle by far, and production was paused at all factories for retooling. That shutdown is what actually moved the needle this quarter—everything else is noise by comparison.

Yeah, that's not how retooling works, or at least not how it's supposed to work. You overproduce in anticipation of the shutdown by the amount you think will get you over the hump. Failing to do that is bad business, unless you're Tesla where you actually don't need the production due to declining sales and the retool is a convenient excuse to lower your production numbers

 

[AusPeter]

If the Post Office was allowed to only service profitable addresses, they wouldn't need "subsidising" either.

But society decided that a universal postal service was a public good worth paying for, so the Post Office was created with a universal service obligation.

And if the GOP hadn’t tried to kill off the US postal service by forcing future pensions onto them, it would be in a hell of a better place.

 

[AusPeter]

Sure, Cybertruck inventory might be piling up, but it’s not materially relevant to Q1 results. Model Y is Tesla’s top-selling vehicle by far, and production was paused at all factories for retooling. That shutdown is what actually moved the needle this quarter—everything else is noise by comparison.

Something something sell 250k CTs per year something something.

 

[dobrien75]

Gitlin is quick to remind you that he’s a ‘doctor’. A casual perusal of his LinkedIn reveals that his phd is in fucking pharmacology ffs, not in engineering or in finance. Using that title while reporting on automotive/financial matters implies that it is relevant to the subject at hand, something that could hardly be further from the truth.

I’m guessing he failed to make it in science or academia so had to resort to becoming an ‘automotive journalist’, something that any two bit influencer with a cellphone could do. But If you want to continue to fellate ‘Dr’ Gitlin, please don’t let me stop you.

Fuck off