Labor cost is a part of course… But the bigger thing is that the entire manufacturing process from near-raw materials, through individual component manufacturing, and final product assembly are all located within just a few miles of each other. Things aren’t being shipped across the country multiple times through the process. When manufacturing transportation cost is essentially zero, there is a lot of inherent cost and time savings.
Tesla also runs much higher margins than competitors. They could be cheaper, but they choose not to be.
After a quick search…
Ford’s gross margins are about 8%.
GM is about 7%.
Kia is about 8%.
Toyota is about 9%.
Tesla is around 25-30%.
Rivian is around 2% it looks like (but they also build the Amazon fleet, which seems to not be included in the numbers I could find quickly).
Note that the legacy auto numbers are what the main company profits, not dealerships. The newer companies can pocket that directly.
A primary reason is newer companies like Tesla and Rivian are still building their manufacturing capabilities. That additional profit is going towards that expansion.
Difference is Koreans actually build high quality cars and Chinese build quality is debatable.
If the Kias I’ve driven are any indication… No they don’t.
You also do realize that the Chinese make good stuff too right? It’s not just the random brands you see on Temu and Amazon. It’s the same brands you recognize already. Every Apple device for the past 25+ years is Chinese. Every component, every step of manufacturing, every human touch along the way. They’re only designed in California.
China just has an excess of manufacturing capability, because they make everything for everyone. Hell, a lot of “counterfeit” and “knock-off” merchandise rolled off the same exact factory line as the name brand. The factories continue running manufacturing lines after hours to produce excess that gets sold on the grey market, and they also send the stuff that fails quality testing to the grey market.
GrapheneOS also will restart after 18 hours without being unlocked by default, you can adjust this down to as little as 10 minutes or as long as 72 hours. A reboot forces a phone into the most secure Before First Unlock status. Biometrics do not work there.
This is exactly the type of shit I’ve been trying to explain to the Linux fanboys for years and all of them dismiss outright.
Until simple shit like this is easy for the average person, Linux will never replace Windows as a default OS option for regular users. 99% of people are scared of config files and the terminal, and they’re still just too commonly needed in every distro.
A LOT of work has been done to minimize it, but there’s always still basic functionality that just isn’t in the GUI. That’s not an issue for most of us here… But it is for most people. Fediverse users are a small minority.
You’re right, that was from a few years ago…
Their gross margin was 20%, up from 16% last year, and automotive margins actually increased from 15% to 18%.
https://www.investing.com/news/transcripts/earnings-call-transcript-tesla-q4-2025-sees-earnings-beat-stock-dips-93CH-4480867