Net income

In November 2022, a lot of companies in the world shared their financial results to their stakeholders. When it comes to the automotive market, the results between Tesla and Toyota made people surprised. This is because Tesla’s quarterly net income exceeded Toyota’s. Of course, there are reasons why Tesla earned many profits and why Toyota could not earn.

For example, Toyota compensated price increase of electricity and raw materials for its suppliers. Also, a weak Japanese yen has been continuing in 2022 due to the difference of central bank’s interest rates between Japan and the US. As a result, the exchange rate worked for Tesla more positively than Toyota.

However, one thing for sure is that Tesla earns more profit per unit than Toyota does. Tesla sold 0.34 million vehicles from July to September 2022. Toyota sold 2.62 million cars during the same period. It means that Toyota sold about eight times as many as cars as Tesla did, but the US company earned more profit in the same period. Therefore, it is very important to understand the difference of business model between two companies. Also, the difference may lead to the fact that Tesla became 1 trillion USD company in terms of market capitalization.

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