Comparative Financial Performance Analysis of Tesla and General Motors (2019–2023)
yu lyu
Co-Presenters: Individual Presentation
College: College of Business and Public Management
Major: Finance
Faculty Research Mentor: Huaibing Yu
Abstract:
In the rapidly evolving automotive industry, understanding financial performance is crucial for assessing the sustainability and profitability of companies. This research examines the financial performance of Tesla Inc. and General Motors (GM) from 2019 to 2023, comparing key profitability ratios such as Gross Profit Margin, Operating Profit Margin, Net Profit Margin, Return on Assets (ROA), and Return on Equity (ROE). The study aims to analyze how these companies have navigated market dynamics, supply chain challenges, and technological advancements.The research methodology involves collecting financial data from publicly available sources such as Yahoo Finance, Bloomberg, and the Federal Reserve Economic Database (FRED). Data analysis is conducted using financial ratio calculations to evaluate profitability and efficiency. Tesla, known for its electric vehicle innovation, has shown significant revenue growth but faces high production costs. General Motors, a long-established automaker, has leveraged economies of scale but faces competition in the EV market.The results indicate that Tesla has a higher gross profit margin than GM, reflecting its premium pricing and cost efficiencies in production. However, GM maintains a more stable net profit margin due to its diversified vehicle portfolio and well-established supply chain. Tesla's ROE and ROA have been volatile, reflecting the company’s rapid expansion and reinvestment in technology. In contrast, GM’s ROE remains steady, supported by consistent revenue streams and cost management.This research provides valuable insights into the financial health of these industry giants, highlighting Tesla’s aggressive growth strategy and GM’s stable profitability. The findings have practical implications for investors, industry analysts, and policymakers in understanding the financial strengths and risks associated with traditional and electric automakers. Future research could explore the impact of government regulations and global supply chain disruptions on financial performance.