Turn up the torque on margins

Traditional operating expenses that affect margins include manufacturing plants and equipment, R&D, labor, materials, overhead and the cost of sales. One of the key financial challenges automakers face is the gap in operating margin over newer EV companies. The primary reason for this gap is the additional expenses that arise from selling through independent dealerships versus selling direct to consumer.

Finding the road to success

Vehicle manufacturers have been “waging war on waste” for decades, but electrification means automakers must minimize costs and maximize margins even further. Companies can take several paths to accomplish this – increase prices, reduce costs or decrease prices in an attempt to increase market share and volume. 

When it comes to revenue management, significant cost drivers can be overlooked when they’re involved with systems that have been entrenched for years. To succeed in the EV game, go-to-market processes must be