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Electric vehicle margin math has a hard floor.
Battery pack costs and per-unit thermal management set a minimum below which revenue cannot fall without destroying returns, and Tesla's latest results illustrate what happens when sustained discounting reaches that boundary.
Profits plunged as price cuts across EV models weighed on results, even as capital expenditures more than doubled to fund a pivot toward semiconductors, autonomous taxis, and humanoid robots.
The discount trap in EV unit economics When a traditional automaker cuts price on an internal combustion vehicle, the bill of materials carries enough variance for supplier negotiation to absorb some of the pressure.
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