Elon Musk Tweets How Car Manufacturers Work & Make Money, Anand Mahindra Responds

Elon Musk, the entrepreneur who is mostly in news because of his ambitious projects, is also pretty active on the social media networks. Recently, he took to the micro-blogging site Twitter to make some comments regarding the car manufacturers and an Indian conglomerate also responded with positive words.

Elon Musk states that big incumbent carmakers have to sell their cars at a very low or zero profit and their majority of the profit comes from selling replacement parts to their fleet out of which 70-80% have crossed their warranty period. Giving the example of razors and blades, he says that the new companies won’t have this benefit and at one fell swoop, he also adds that they don’t have the infrastructure for sales and service too.

Elon Musk’s tweet read, “Large incumbent carmakers sell their cars at low to zero true margin. Most of their profit is selling replacement parts to their fleet, of which 70% to 80% are past warranty. Like razors & blades. New car companies lack this advantage. Also lack sales & service infrastructure.”

Elon Musk also tweeted, “Production is hard. Production with positive cash flow is extremely hard.”

The tweets of Elon Musk were noticed by the chairman of the Mahindra Group, Anand Mahindra and he responded by saying that Elon Musk said the right thing as they have been doing it for decades now and it’s their way of life.

Anand Mahindra tweeted, “You said it, @elonmusk And we’ve been doing that for decades now. Still sweating & slaving away at it. It’s our way of life…”

Elon Musk wants his company Tesla to make an entry in India but still there are some issues which need to be sorted out before their entry so it is still not clear when we will be able to see the electric cars of Tesla on the Indian roads.