Article shows how hard BMW 3 series has been hit by EVs

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https://cleantechnica.com/2019/06/04/tesla-model-3-vs-bmw-330i-tesla-nearly-half-the-cost/

Now this article was done by Zach Shahan and in my opinion Zach is as straight as they come in this auto journalism business. He doesn't exaggerate he just tells it straight as he understands it and he does solid research.

The value proposition is not lost on Californians new Model 3s are all I see here. I don't see new Mercedes or BMWs in CA. And as we know the BMW CEO is being pressured to resign over his handling of EVs leaving BMW unprepared especially against Tesla.
 
BMW had a net profit in 2018 of 7.15 billion Euros ($8 billion). Tesla lost almost $1 billion in 2018. The BMW 330i is just one model of the many that BMW sells. Zach does make a compelling argument that a Tesla Model 3 would have a lower ownership cost than a BMW 330i over 5 years. However, just how many people who buy BMWs worry about the cost of ownership?

As a followup, the Tesla 3+ has a 240 mile range, which is pretty impressive for an EV. However, the BMW has a 560 mile highway range. I looked at the specs for both cars and they are both impressive. Sadly, my car budget is Honda size, not BMW or Tesla size.
 
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DaleL said:
BMW had a net profit in 2018 of 7.15 billion Euros ($8 billion). Tesla lost almost $1 billion in 2018. The BMW 330i is just one model of the many that BMW sells. Zach does make a compelling argument that a Tesla Model 3 would have a lower ownership cost than a BMW 330i over 5 years. However, just how many people who buy BMWs worry about the cost of ownership?
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Exactly, Tesla fans are aways touting the cost of ownership, but I say who cares? When I bought my Lexus I did not calculate the cost per mile, or even the monthly payment (paid cash) I just wanted a reliable, safe, family cruiser that I did not have to worry about leaving my family stranded in any weather condition. Low and behold that Lexus is 10 years old now, and has well over 100K miles, and have never had non scheduled service. Our friends who drive model X compare service stories at get togethers, and all (100%) of them have had unscheduled trips to the Service Center, some more often than others, but it seems 3 unscheduled trips in the first year of ownership is about average in my small sample size.

On the losses, Tesla has never had an annual net profit... NEVER!!!! And let's not forget building factories and Superchargers are not included in profit / loss numbers unless they are fully depreciated at the time of acquisition. So far in 2019 ($700M), wow, off to a great start for the annual loss record...
 
David Green said:
Exactly, Tesla fans are aways touting the cost of ownership, but I say who cares? When I bought my Lexus I did not calculate the cost per mile, or even the monthly payment (paid cash) I just wanted a reliable, safe, family cruiser that I did not have to worry about leaving my family stranded in any weather condition. Low and behold that Lexus is 10 years old now, and has well over 100K miles, and have never had non scheduled service. Our friends who drive model X compare service stories at get togethers, and all (100%) of them have had unscheduled trips to the Service Center, some more often than others, but it seems 3 unscheduled trips in the first year of ownership is about average in my small sample size.

On the losses, Tesla has never had an annual net profit... NEVER!!!! And let's not forget building factories and Superchargers are not included in profit / loss numbers unless they are fully depreciated at the time of acquisition. So far in 2019 ($700M), wow, off to a great start for the annual loss record...
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So if a company makes 1 million dollars profit in a year and expands it business with 2 million dollars it's not counted as a loss.....
 
DonDeeHippy said:
So if a company makes 1 million dollars profit in a year and expands it business with 2 million dollars it's not counted as a loss.....
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Welcome to world of finance and accounting. The $2 million could be an investment and be capitalized and made to appear on the balance sheet, not the profit and loss statement. That is why companies can make huge profits but pay no taxes.
 
DonDeeHippy said:
So if a company makes 1 million dollars profit in a year and expands it business with 2 million dollars it's not counted as a loss.....
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Yes, that is right. Tesla regularly loses money on their operations, which is the reason I am not more positive about the business.
 
interestedinEV said:
Welcome to world of finance and accounting. The $2 million could be an investment and be capitalized and made to appear on the balance sheet, not the profit and loss statement. That is why companies can make huge profits but pay no taxes.
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Not exactly... If a company realizes their profits its hard to get around taxes... The IRS has limits to how much CAP EX can be written off each year (most has to be depreciated over time), but the section 179 really benefits a small business like mine, as we can write off $500K (Actual dollar amount varies each year) of certain capital expenses each year. Every year in December we go on a heavy equipment and truck shopping spree, spend all we can instantly write off as it is the same as getting a 40% discount on the deferred taxes. Tesla X qualifies for Section 179, but not the S or Model 3... Audi E-Tron also qualifies.

When you speak of big companies using tax shelters, it's more like Apple not re patriating their overseas revenue / profit.
 
David Green said:
Not exactly... If a company realizes their profits its hard to get around taxes... The IRS has limits to how much CAP EX can be written off each year (most has to be depreciated over time), but the section 179 really benefits a small business like mine, as we can write off $500K (Actual dollar amount varies each year) of certain capital expenses each year. Every year in December we go on a heavy equipment and truck shopping spree, spend all we can instantly write off as it is the same as getting a 40% discount on the deferred taxes. Tesla X qualifies for Section 179, but not the S or Model 3... Audi E-Tron also qualifies.

When you speak of big companies using tax shelters, it's more like Apple not re patriating their overseas revenue / profit.
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There are many tax loopholes, that companies use. For example there is accelerated depreciation, there are credits for research, credits for local manufacturing, credits for ethanol, credits for oil exploration etc. So repatriating funds in one way, but there are so many other ways based on the industry, location, aggressiveness of the company etc. You will be amazed at the number of loopholes corporations have.


https://www.cbsnews.com/news/2018-t...id-little-to-no-federal-income-tax-last-year/
Accelerated depreciation tax breaks
Companies' ability to expense inventory before it depreciates is a new provision under the Tax Cuts and Jobs Act that accounts for part of their big tax breaks. The provision effectively allows businesses to write off the expense of buying a piece of equipment faster than it wears out.

"Normally, you have to depreciate an asset to take a deduction for a purchase of an asset over several years, but under the new law, you can take it all in the first year," Sullivan said.

Gardner likened it to "an IOU on steroids." "You are postponing your tax bill on income," he said.

While not every dollar in tax cuts can be attributed to the new tax law, it did ramp up accelerated depreciation. "It seems clear the new tax law made this problem worse," Gardner said.
 
DaleL said:
BMW had a net profit in 2018 of 7.15 billion Euros ($8 billion). Tesla lost almost $1 billion in 2018. The BMW 330i is just one model of the many that BMW sells. Zach does make a compelling argument that a Tesla Model 3 would have a lower ownership cost than a BMW 330i over 5 years. However, just how many people who buy BMWs worry about the cost of ownership?

As a followup, the Tesla 3+ has a 240 mile range, which is pretty impressive for an EV. However, the BMW has a 560 mile highway range. I looked at the specs for both cars and they are both impressive. Sadly, my car budget is Honda size, not BMW or Tesla size.
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If you have owned a BMW 3 Series, you should have known it’s took 60% BMW sales annually. Now, do the math!
I’m in Bay Area and I don’t see new 3 series anymore but Model 3 with temporary license plates (required by state for all new cars).



JT
 
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