Earnings Preview: Tesla's Efficiency Under The Scanner

Tesla is now targeting gross margins of 28% by Q4 2014. Company management cited economies of scale arising from increased production and increased efficiency in production as the reasons behind the revised expectation in gross margins. Thus, updates on the progress of the assembly line will be critical here, too. Auto companies, in their definition of cost of goods, usually include some fixed cost components such as labor costs and plant operational expenses. Therefore, as volumes increase, the...