Sandy Munro, automotive engineer, and lean production specialist via his Munro & Associates company was in full rant mode the other week. Munro, often cool-headed and mildly direct let’s loose with an epic rant, not aimed at Tesla but at those who question the authenticity and validity of Munro & Associates cost methodologies.
Munro & Associates is made up of a pool of engineers who tear down vehicles in order to quantify the cost of every nut, every bolt, every washer… just about every damn component that makes up a particular car they are investigating at anyone time.
The process allows Munro & Associates to get an accurate cost of how much it costs an auto manufacturer to build a specific car/model. And they make suggestions on how to improve production techniques etc.
The compiled report is then sold to anyone who is competing in automotive manufacturing. A recent teardown of a Model Y indicated that Tesla makes a 40 percent profit on each car sold, an unheard-of margin in automotive manufacturing.
Legacy car manufacturers such as Ford, Toyota, and Volkswagen are happy if they make a 5-percent profit margin on each car sold. Often it’s slightly less.
So when an accountant questioned Muro’s calculations a certain Sandy Munro hit back with a sternly delivered pushback on why you should never trust an accountant who makes calculations on the back of a cigarette packet.