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Visualizing How Much Revenue Automakers Generate Every Second (Don’t Show TSLA Bulls)

Visualizing How Much Revenue Automakers Generate Every Second (Don’t Show TSLA Bulls)

Tyler Durden

Mon, 08/24/2020 – 21:45

Since their invention, automobiles have been a driving force of the global economy.

Used by millions of people to get to work, transport goods, and travel, the modern automobile has become ubiquitous in our daily lives. So much so, that, as Visual Capitalist’s Marcu Lu details below, a whopping 92 million cars were produced in just 2019.

To help us understand the might of the auto industry, this infographic from Parts Geek breaks down the earnings of 19 major car companies by an interesting metric—revenue per second.

The Full List of Automakers

Below are the earnings of the 19 automakers featured in the infographic.

The Volkswagen Group claims the top spot with $290.2B in gross revenue, translating to $9,202.88 per second. Capping off the list is the world’s most valuable automaker, Tesla, which generated a relatively smaller $24.6B in gross revenue, or $780.06 per second.

A clear takeaway from this data is that Volkswagen and Toyota have a sizable lead over the rest of their peers. Let’s take a closer look at how these two companies operate.

The Volkswagen Group

The Volkswagen Group holds a comprehensive portfolio of brands and services, and has been the world’s largest automaker, by sales, for the past three years.

Beginning with passenger cars and motorcycles, its numerous brands reported the following results for 2019.

Other sources of revenue were Volkswagen’s $44.5B commercial vehicle business, its $4.7B power engineering business, and lastly its $44.4B financial services division.

In total, the Volkswagen Group delivered just short of 11 million vehicles in 2019, besting its 2018 deliveries by 1.3% and setting a new record for the group. While a majority of these vehicles were produced in Europe, the group operates a global production network with a significant presence in Asia.

The German automaker has invested billions in China, the world’s largest car market, to scale its electric vehicle (EV) production capabilities.

Toyota Motor Corporation

Toyota Motor Corporation operates a much more concentrated brand portfolio, with Toyota and Lexus being its two most prominent names. This strategy seems to be working well, as Toyota was ranked the ninth most valuable brand in 2019, and was the only automaker to crack the top ten.

A testament to Toyota’s global influence is its relatively balanced breakdown of 2019 revenues by regional market:

  • North America: 30%

  • Japan: 25%

  • Asia: 18%

  • Europe: 11.5%

  • Other: 15.3%

For comparison, here is Volkswagen’s 2019 revenues by region, which leans heavily towards Europe:

  • Europe (excl. Germany): 42%

  • Germany: 19%

  • North America: 17%

  • South America: 4%

  • Asia-Pacific: 17%

The Japanese automaker’s popularity in foreign regions is likely the result of its reputation for reliability and affordability. It may also explain why Toyota’s trucks are a common sight in tough environments such as conflict zones of the developing world.

Altogether, Toyota and its subsidiaries sold nearly 9 million vehicles in 2019, setting a new record for the company but just 0.1% higher than its 2018 figure. Similar to Volkswagen, a majority of Toyota’s vehicles are produced in its home region, with the remainder being built around the world.

Outside of Japan, Toyota has significant production capabilities in the U.S., where it makes everything from pickup trucks to sedans. In 2016, the Toyota Camry made headlines after being ranked the most American-made car—over 75% of its parts were sourced domestically.

Alternative Revenue Sources

While automobiles represent the core business for these companies, many of them have alternative revenue sources. Honda, for example, produces motorcycles, boat engines, lawn mowers, and even personal jets.

Porsche takes a slightly different approach with its accessories and licensing subsidiary, Porsche Design. Since 2003, a variety of lifestyle goods including eyewear, smartphones, and watches have been sold under the Porsche name. Its most noteworthy project is the Porsche Design Tower Miami, a residential skyscraper which features a robotic car elevator.

Finally, electric vehicle (EV) maker Tesla earns additional revenues by selling carbon credits to other automakers that fail to meet government-imposed quotas on EV sales. Since Tesla only produces EVs, it has no need for its credits and is free to sell them. In the second quarter of 2020, Tesla earned $428 million from selling carbon credits, representing 7% of its total revenues for the period.

The Road Ahead

Additional revenue streams are continuing to open up as automakers integrate new technologies into their cars.

Cadillac and Tesla, two American brands, have both announced that their self-driving capabilities will eventually become a paid subscription service. Meanwhile, Germany’s premium automakers are expanding into wireless services. BMW claims it will become the first automaker to offer 5G connectivity in its cars, while Mercedes now sells downloadable software packages to enhance a driver’s experience.

While it’s too early to say whether or not these services will have a significant impact on an automaker’s bottom line, forecasts claim this so-called “connected car market” will be worth $166 billion by 2025. To put that into perspective, that’s more than half of Volkswagen’s gross revenue in 2019, or $5,264 per second.


This post has been republished with permission from a publicly-available RSS feed found on Zero Hedge. The views expressed by the original author(s) do not necessarily reflect the opinions or views of The Libertarian Hub, its owners or administrators. Any images included in the original article belong to and are the sole responsibility of the original author/website. The Libertarian Hub makes no claims of ownership of any imported photos/images and shall not be held liable for any unintended copyright infringement. Submit a DCMA takedown request.

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About The Author

Tyler Durden

Zero Hedge's mission is to widen the scope of financial, economic and political information available to the professional investing public, to skeptically examine and, where necessary, attack the flaccid institution that financial journalism has become, to liberate oppressed knowledge, to provide analysis uninhibited by political constraint and to facilitate information's unending quest for freedom. Visit https://www.zerohedge.com

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