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Tesla margin criticism is wrong, says investment bank
Tesla has as many critics as it does fans and many commentators have been quick to shoot down the company, saying it is burning through cash and has a boss in Elon Musk who isn’t behaving in the manner appropriate to being the chief executive of a quoted business.
Drilling down into more specifics, many commentators say Tesla won’t make as much money as the company thinks it will. In particular, critics say Tesla won’t make 25% gross margins on its Model 3 vehicle.
Having undertaken detailed analysis, investment bank Berenberg says this criticism is wrong and that the margin target is ‘reality and not a hope’.
‘Substantial gains from lower labour content, as well as capital and material use efficiencies, should allow Tesla to comfortably achieve a margin above 25% throughout the product cycle,’ it says.