tesla's latest steps in its path to profitability - 18650 battery cell
Earlier this week, Tesla said it would cut about 9% of its employees worldwide, a move that would affect about 3,500 paid employees.
The layoffs come as Tesla seeks to make its first profit in 15 years without raising capital to fund its operations.
Below, let's take a look at some of the other steps Tesla has taken to make a profit.
We also created an interactive dashboard analysis that outlines the trends in Tesla's revenue, operating profit and free cash flow for the next three quarters (
Learn more about how CFOs, institutional investors and private equity companies use Trefis technology).
With the production of Model 3 strengthened, Tesla is expected to reach the target of producing 5,000 Model 3 cars per week by the end of June, up from about 2,000 units at the end of the previous quarter.
The company plans to produce about 10,000 cars a week next year.
With the company deploying a lot of automation in building new cars, production ramps at the relative exponential level may be achievable.
With the expansion of production scale, the cost absorption should increase, thereby increasing the gross profit margin.
Tesla's goal is that by next year, the Model 3 will have a gross profit margin of 25%, roughly the same as its high-end cars.
Stesla, which focuses on higher variants, says it will continue to give priority to producing its higher quality variants
3 Car Market (extended-
Range, with luxury package)
The profit margin is higher, and the basic version is only possible at the end of this year.
According to our estimates, the average selling price of most Model 3 vehicles currently delivered can be as high as $50,000.
A higher combination of luxury cars could help Tesla boost profits.
Battery costs may continue to account for a large part of the cost of electric vehicles, and Tesla has been working to improve battery technology and supply chains.
Tesla, along with Panasonic, is producing a new battery, 2170, for the Type 3 sedan.
These batteries replace the smaller 18650 batteries that have been in use for decades and allow for higher energy density and lower production costs.
As the company expands production of these batteries at its gigabit plant and uses them for newer models, it can reduce battery costs and reduce battery imports from Japan.
Tesla says it could be below $100 a kilowatt hour (
For Battery Pack)
Within two years
In the long run, when the Model S was launched in 2012, the cost of the battery was about $400/kWh.
The restructuring company, which cut capital spending, said it would cut planned capital spending from $3 to less than $3 billion this year.
4 billion last year.
That said, the cut could be a temporary measure as the company is working on multiple other projects including Y-type and semi-truck.
Tesla also plans to carry out a major restructuring to make its management structure more flat and efficient. Like our chart?