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The manufacturing improvements and efforts led to impressive market share growth for Model 3. Musk emphasized that deliveries directly contributed to customer satisfaction and word-of-mouth growth, ultimately driving sales organically.
Financial Performance and Profitability Outlook
Tesla reported an increase in gross margins for the Model S and X, while calls for Model 3 margins suggested an increase from 3% to 15% in the following quarter. This significant margin growth can be attributed to targeted efforts to improve manufacturing efficiency, reduce labor costs per vehicle, and ultimately achieve profitability for each car sold. Musk highlighted that fixed costs at higher production volumes allow for better cost leverage.