Tesla may be the rising star of the US auto industry, but for a very long time Detroit giants General Motors and Ford have held significant advantages over their young rival. Ford and GM still tend to ship significantly more vehicles per quarter than Tesla, and they also tend to make more money than the EV maker. The latter is no longer true.
In the first quarter, Tesla reported net income of $3.31 billion, representing a 658% year-over-year increase. In the first quarter of 2021, Tesla earned $438 million. By comparison, GM posted net income of $2.93 billion in the first quarter, down 3.04% year-over-year. Ford, despite the success of vehicles like the Mustang Mach-E and the strength 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 the truckmaker Rivian electrics.
Tesla already dominates its US-born peers in the automotive sector in terms of market capitalization, with the company currently valued at over $900 billion, and this after a substantial decline which is likely compounded by TSLA’s recent sale of the CEO Elon Musk. General Motors currently has a market capitalization of $56.57 billion, while Ford is currently valued at $59.24 billion.
It should be noted that Ford and GM still delivered significantly more cars than Tesla in the first quarter. The electric vehicle maker said it delivered 310,048 cars in the first quarter of 2022, which is still far behind Ford’s 970,000 and GM’s 1.427 million. Despite delivering fewer cars, Tesla was still making more money than its more seasoned Detroit-based rivals.
According to The street, Tesla was able to accomplish this due to a variety of factors. One is the company’s Q1 0222 adjusted EBITDA margin, which increased to 26.8% in the first quarter from 17.7% last year. GM’s adjusted EBIT margin was 11.2% in the first quarter, while Ford posted an adjusted EBIT margin of 6.7%.
Tesla seems to have accomplished this through a variety of new strategies. One of them is undoubtedly the savings made by the company on traditional advertisements. Tesla spends $0 on ads, instead relying on word-of-mouth and CEO Elon Musk’s online presence on Twitter to spread its brand image. Ford and GM are both big ad spenders, with the latter spending $2.22 billion on ads in 2020, according to Statistical.
With Tesla now taking the crown of America’s most profitable automaker, there are only a few titles left to claim for the electric vehicle company. One involves the number of vehicles produced and delivered per year, and the other is turnover. Vehicle deliveries and production may still take a while, as Tesla only has four active EV factories today, but in terms of revenue, the electric car maker could fare well sooner. provided that.
In the first quarter, GM’s revenue was $35.98 billion, while Ford posted $34.48 billion. Tesla’s revenue in the first quarter of 2022 was $18.76 billion.
Disclaimer: I’m a long time TSLA follower.
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