Let's just all agree that whatever the reason for the price cuts are, they had the best 1st quarter results ever. If there was a slowdown, than it worked and temporarily reversed it. If the following 3 quarters and end of year trend downwards, than we know 100 percent the market is softening

 

While there is truth to what you say the fact is the CEO doesn’t appear to manage the business the way you are describing or they would be required to disclose it. The CEO doesn’t get profitability information for EVs or they would have to disclose that information.

If you look at Ford, beginning with Q1 of this year they will be breaking out its EV business as a separate reportable segment (among other new segments) because the CEO is now managing the business this way and gets discrete financial information on the new segments. They are reporting this because they are required to.

 

I find that really hard to believe. Of course the CEO has to know the profit and loss of each BU.

 

That's a strange claim, CEO doesn't have access to all company financials? So he or she asks the CFO and they're like, nah can't tell you sorry.

 

The accounting standards are pretty clear and if the Chief Operating Decision maker, typically the CEO, doesn't receive discreet profitability information of any of the business units and doesn't assess performance that way then they don't have to present it. If they do they are required to present it.

Take Apple for example, the CEO operates the company and doesn't get discrete financial information for each of their products, not even gross margin which is why you never see that information anywhere (at least that is how it was several years ago). The SEC tried to get that information to the public and couldn't do anything about it because the CEO never received that information and didn't manage the business that way. That's the way the accounting standards work and these disclosures are audited by Big 4 accounting firms.

I don't know the inner workings of cars but this I do know and I specialize in it. It's what I do for a living and I deal with this all the time.

 

US: Mercedes-Benz More Than Tripled EQ Sales In Q1 2023

Every tenth new Mercedes-Benz car sold was all-electric

"Mercedes-Benz reports 61,531 car sales in the United States during the first quarter of 2023, which is 1.2 percent less than a year ago. When including commercial vans, then the total is 75,701 (down 0.3% year-over-year).

Meanwhile, Mercedes-Benz all-electric car sales more than tripled and reached a new all-time record of 7,341 (up 251 percent year-over-year). That's 11.9 percent of the total passenger car sales"

https://insideevs.com/news/662047/us...-sales-2023q1/

 

That is simply not true. It makes zero sense.

 

Ok well if you don’t believe me in what I specialize in I don’t know what to tell you. All I know is I advise some of the biggest companies in the world on this stuff so if what I’m saying isn’t true they sure are paying me a ton of money to be wrong in applying the rules. I am a National Office partner for the largest accounting firm in the world and my firm relies on me to get our clients through these rules.

 

Many things don't make sense but @patgilm does this for a living, I'm sure he wouldn't make this up

 

a company lke Apple no doubt has an insanely sophisticated ERP (enterprise resource planning / logistics/accounting) system and can absolutely get whatever reports, analytics, metrics, etc. they want. apple cannot, with ANY credibility, say they "can't" get gross margin information by product. now they may obfuscate it and choose to not make it available to the outside so people can't see the piles of money they make from each product and service (or don't) but internally they absolutely know.

i have been involved with several ERP systems (from development and operations standpoints) and we could do whatever analytics we wanted.

 

It’s not that they can’t get it, it’s that the CEO doesn’t get that information to manage the business and evaluate performance and the Board doesn’t get that info. The SEC had tried to get that information for years and even tried when the new CEO was put in place after the Jobs died. Don’t believe me, look what “someone” sent a letter to back then and how Apple responded.

https://www.sec.gov/Archives/edgar/d.../filename1.htm

 

thanks. no time to read all that right now, but the first part says they simply don't want to disclose the confidential and sensitive information requested. don't blame 'em!

 

The confidential information they are referring to is in response to the questions being asked and how they manage the business, not what needs to be disclosed in the public finings but if you look at the last part of the letter you can see what info the CEO gets to manage the business.

 

Margin informaton is calculated for both shipment and forecast at a very discrete level. That's how companies are run and major decsions made.
My Forecast + Actuals database interfaced to SAP did this for a major Silicon Valley company. Not to mention Revenue Recognition according to our established SAB 104 guidelines.

Each BU, each Product within that BU and right down to the finshed unit has discrete material, labor, warranty, royalty, overhead, etc assigned to it.
How does Mary Barra think their EV businees may become profitable next year? The only difference between she and Jim Farley is he decided to go public with the numbers instead of burying EV numbers within ICE.

 

Getting into semantics (and off topic). Patgilm, keep me honest here. If the CEO knows the gross profits of each product line and uses that to make decisions then the gross profits have to be disclosed in the quarterly/annual reports. If reasonable guard rails are put up so that the CEO can claim they don't know the gross profit by product line, they can avoid having to disclose that level of information.