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Originally Posted by dimabimmer
Would you care to explain how a Bugatti at a price tag of $1.7 million sold at a loss to a company?
Maybe at a loss to a customer, but not the company.
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Through math? If it cost $2 billion to develop the Veyron and you sell each one for $1.7mm, you'd need to sell 1,176 Veyrons to break even. This doesn't even include the fixed and variable costs nor does it include overhead (cost of the workers who actually build the car, cost of the facility, etc).
In truth no one really knows if Bugatti loses money on every car it sells, most estimates are calculated by third party analysts, not until you get info from first party analysts (which will likely never happen) we'll never know. That said, I wouldn't be surprised if they lost money on each car sold.
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By the way, my previous comment above on tesla selling their cars at a loss and not profit,- is a fact stated by a reputable financial analyst. Tesla is taking hundreds of thousands of dollars of customer's deposits and gambles on eventually making profit with expansion of their product line.
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That's not true.
Now if I recall correctly, your "reputable financial analyst" were actually the guys who wrote this:
http://www.reuters.com/article/us-te...0QE0DC20150809
So it's actually two people claiming they lose $4,000 on every car sold. These two individuals are actually idiots. The Model S has a profit margin of around 25%, which is fucking INSANE for a car company (average is single digits). So they make money on every Model S, why those two writers are dipshits is how they got to their metric. They took 100% of of their operational cost and spread it evenly amongst all the cars sold.
This is mindnumbingly retarded, because the metric implies that Tesla has an unsustainable business model, which isn't true. Most of their losses and cash burn comes from their aggressive expansion. Factory expansion and what not are extremely expensive but must be done if you're going from building one model car to three. The $4,000 loss per car sold doesn't control for investment spending meant to drive revenue growth in the future. The old adage "you gotta spend money to make money" applies here.
Let's say you want to open your own brick and mortar store to sell bikes. You take a $250,000 loan to get yourself started and open your first store. After one year you had $500,000 in revenue and from that, had $50,000 in profit. However since you borrowed and spent $250,000, you lost $200,000 (for the sake of simplicity, let's ignore amortization and depreciation).
Would I say for every bike you sell you lose money? Nope, but those two retards would.