Tesla shares (unsplash photo, Instagram/ Elon Musk)
Tesla continues to further increase its grip on the US auto sector. The list of trophies won by the premium electric car maker continues to grow. Elon Musk’s company is the largest auto group in the world by market capitalization with a market capitalization of over $896 billion at the time of writing Ford’s valuation is $57.2 billion and GM’s valuation is $52.1 billion.
This insane valuation makes Tesla the sixth largest company in the world behind Apple, oil giant Saudi Aramco, Microsoft, Alphabet and Amazon. But if there’s one crown that should please its fans and investors, it’s that Tesla makes far more money than its main American rivals Ford and General Motors.
More in-
For the second quarter in a row, Tesla reported higher net income than its Michigan rivals, according to their earnings reports. Tesla reported net income of $2.3 billion in the second quarter ended June 30, up 98% year over year, outperforming GM whose net income was $1.7 billion, down 40.3%. The Austin, Texas-based automaker even made three times as much as Ford, which reported net income of $667 million, up 19% year over year.
Looking at earnings before interest, taxes, depreciation and amortization, or adjusted EBITDA margin, which is another measure of profitability, Tesla maintains the top spot. Its adjusted EBITDA margin was about 22.4% in the second quarter compared to 20.8% in the second quarter of 2021. GM’s adjusted EBIT margin – earnings before interest and taxes – was 6.6%, on a year-over-year basis. Ford’s adjusted EBIT margin is 8.8%. Basically, Tesla is significantly more profitable than Ford and GM.
Tesla makes the difference in costs. The company seems to have better control over its costs, which is easy when you spend $0 on marketing, while rivals flood consumers with advertisements touting the benefits of their latest models. Ford’s total costs rose year-over-year by 39.4% in the second quarter.
Tesla’s performance is even more spectacular because the disruptor makes and delivers far fewer cars than its two rivals. In the second quarter, Musk’s group produced over 258,000 vehicles and delivered over 254,000 vehicles worldwide. GM delivered 582,401 vehicles in the US alone, while Ford delivered 483,688 new vehicles to US customers.
In the first quarter, Tesla reported a net profit of 3.31 billion dollars. By comparison, GM posted a net profit of $2.93 billion in the same period. Ford, for its part, posted a net loss of $3.1 billion in total.
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