In this episode of Motley Fool Money, Motley Fool Senior Analyst Bill Mann discusses:
- Tesla‘s (TSLA 1.11%) margins are being compressed and are still the envy of rival automakers.
- How Tesla is (and isn’t) comparable to Netflix.
- Amazon (AMZN -0.91%) is using “pocket change” to make its third-largest acquisition.
Motley Fool contributors Jason Hall and Matt Frankel engage in a “Bull vs. Bear” debate over Lemonade (LMND 2.24%), and both wish the artificial intelligence-driven insurance company would hurry up and close its acquisition of micro-cap auto insurance company Metromile.
To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
This video was recorded on July 21, 2022.
Chris Hill: Tesla surprises Wall Street and Amazon makes another investment in healthcare. Motley Fool Money starts now. I’m Chris Hill joining me today, Motley Fool Senior Analyst Bill Mann. Thanks for being here.
Bill Mann: Hey Chris, what’s happening?
Chris Hill: We’ve got earnings season. That’s what’s happening and we’re going to start with Tesla.
Bill Mann: It feels like we just had earnings season no more than three months ago, but we’re back.
Chris Hill: I know, isn’t it great? Tesla’s second-quarter profits were higher-than-expected, but margins are getting compressed, which really shouldn’t surprise anyone given the cost of materials going higher and supply chain conditions continuing to be, let’s call it less than ideal.
Bill Mann: Yeah. Given the circumstances, Tesla’s quarter was great. But yes, you went right to the spot that, the people who would suggest that Tesla is not as great of a company as I believe it to be. Their margins came down for production, which is an important distinction for Tesla because they also have environmental credits from 30 percent to 26 percent, which is in fact, it is a reduction. It is higher than nearly any other car company, Volkswagen, for example, which is a really fantastically run company, their margins range from 16-18 percent. Yes, it was not perfect for Tesla, but it was absolutely fine.
Chris Hill: A welcome distraction for Tesla’s shareholders to actually get results from the company, because really the conversation around the CEO of …….