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Comment by ripjaygn | Hacker News Reader

> Tesla is losing money on every truck sold at this point

Is it just me or many people don't seem to understand fixed costs vs. variable costs that I learnt about in high school while growing up in the third world?

Don't people have to take Econ 101 in the USA or whatever the equivalent is in their countries? Or is it optional.

Not even going to bring up "advanced" concepts like COGS that I know about while being a CS major and never taking an economics course.

What you said doesn't many sense, because, say they sell 100 million trucks, according to your logic they would end up with a huge loss. But in reality they would make a big profit.

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Some companies will literally sell products for less than the cost of the components that go into them.

Sometimes that's a supermarket selling 'loss leaders' to get people into the store where they'll hopefully buy other things - or a games console manufacturer planning to make up the loss because they get paid for every game sold.

Other times a manufacturer wants to hit a promised launch date, and hopes to get manufacturing costs down later. Maybe they haven't had time to set up certain cost-saving automation, or a planned lower-cost component wasn't ready in time for launch. Maybe their widget supplier has promised a lower cost when they're ordering 10,000 a month but right now they're only ordering 500 a month.

Of course, without access to insider information we can only guess if this is really occurring...

> Some companies will literally sell products for less than the cost of the components that go into them.

But that is not what Tesla is doing, is it?

> Of course, without access to insider information we can only guess if this is really occurring...

No need to guess, the GP poster confidently stated this:

> Tesla is losing money on every truck sold at this point.

They must be an insider or have reliable insider information.

Of course, this is the only explanation. No one can just make stuff up on the internet. That’s impossible.

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