The United States has a $18 trillion economy, which makes it the world’s largest by GDP.
To show its tremendous size, we previously published a visualization of the global economy that carved the world’s economic production into slices based on each country’s contribution to GDP. While this visualization helps to show how large the U.S. economy is in comparison to other nations, it still doesn’t seem to tell the full story.
After all, the United States is geographically vast and diverse, and population is spread out and unevenly distributed. This means production and innovation are both concentrated in some areas of the country, while other parts are clearly more rural.
How can we account for these differences to get a more accurate view of the U.S. economic engine?
3 Maps to Visualize America’s $18 Trillion Economy
Luckily, Mark J. Perry from AEI’s Carpe Diem blog has done some heavy lifting here to help us better understand the size and scope of America’s economy activity.
Here’s three maps that will make you think:
The first map redraws state borders to make seven “mega-states” that each have individual economies the size of major countries. California, for example, has an economy the size of France. The whole Northeast has an economy the size of Japan, and so on.
But even states are very diverse in geography – for example, Arizona has 6.7 million people, but more than two-thirds of those people live in the Phoenix metro area.
The second map compares the economies of metropolitan areas with entire countries. As you can see, the aforementioned Phoenix metro area has similar economic output to Portugal.
Meanwhile, the whole corridor from New York through to Washington, D.C. is as big as Canada, Iran, Czech Republic, and Sweden combined.
The final map builds on this idea, showing that half of America’s economic output comes just from a selection of metropolitan areas. The other half of America’s $18 trillion economy is based in the large swaths of land in between, including thousands of rural areas, villages, towns, and cities.
Charted: Tesla’s Unrivaled Profit Margins
This infographic compares Tesla’s impressive profit margins to various Western and Chinese competitors.
Chart: Tesla’s Unrivaled Profit Margins
In January this year, Tesla made the surprising announcement that it would be cutting prices on its vehicles by as much as 20%.
While price cuts are not new in the automotive world, they are for Tesla. The company, which historically has been unable to keep up with demand, has seen its order backlog shrink from 476,000 units in July 2022, to 74,000 in December 2022.
This has been attributed to Tesla’s robust production growth, which saw 2022 production increase 41% over 2021 (from 930,422 to 1,313,851 units).
With the days of “endless” demand seemingly over, Tesla is going on the offensive by reducing its prices—a move that puts pressure on competitors, but has also angered existing owners.
Cranking up the Heat
Tesla’s price cuts are an attempt to protect its market share, but they’re not exactly the desperation move some media outlets have claimed them to be.
Recent data compiled by Reuters shows that Tesla’s margins are significantly higher than those of its rivals, both in terms of gross and net profit. Our graphic only illustrates the net figures, but gross profits are also included in the table below.
|Company||Gross profit per car||Net profit per car|
Data from Q3 2022
Price cutting has its drawbacks, but one could argue that the benefits for Tesla are worth it based on this data—especially in a critical market like China.
Tesla has taken the nuclear option to bully the weaker, thin margin players off the table.
– Bill Russo, Automobility
In the case of Chinese EV startups Xpeng and Nio, net profits are non-existent, meaning it’s unlikely they’ll be able to match Tesla’s reductions in price. Both firms have reported year-on-year sales declines in January.
As for Tesla, Chinese media outlets have claimed that the firm received 30,000 orders within three days of its price cut announcement. Note that this hasn’t been officially confirmed by anyone within the company.
Tit for Tat
Ford made headlines recently for announcing its own price cuts on the Mustang Mach-E electric SUV. The model is a direct competitor to Tesla’s best-selling Model Y.
Chevrolet and Hyundai have also adjusted some of their EV prices in recent months, as listed in the following table.
|Model||Old Price||New Price||Discount|
|Tesla Model Y Long Range||$65,990||$53,490||18.9%|
|Chevrolet Bolt EUV 2023||$33,500||$27,200||18.8%|
|Tesla Model Y Performance||$69,990||$56,990||18.6%|
|Chevrolet Bolt 2023||$31,600||$26,500||16.1%|
|Tesla Model 3 Performance||$62,990||$53,990||14.3%|
|Hyundai Kona Electric 2022||$37,390||$34,000||9.1%|
|Ford Mustang Mach-E GT Extended Range||$69,900||$64,000||8.4%|
|Tesla Model 3 Long Range||$46,990||$43,990||6.4%|
|Ford Mustang Mach-E Premium AWD||$57,675||$53,995||6.4%|
|Ford Mustang Mach-E RWD Standard Range||$46,900||$46,000||1.9%|
Source: Observer (Feb 2023)
Volkswagen is a noteworthy player missing from this table. The company has been gaining ground on Tesla, especially in the European market.
We have a clear pricing strategy and are focusing on reliability. We trust in the strength of our products and brands.
– Oliver Blume, CEO, VW Group
This decision could hamper Volkswagen’s goal of becoming a dominant player in EVs, especially if more automakers join Tesla in cutting prices. For now, Tesla still holds a strong grip on the US market.
Recent Tesla buyers became outraged when the company announced it would be slashing prices on its cars. In China, buyers even staged protests at Tesla stores and delivery centers.
Recent buyers not only missed out on a better price, but their cars have effectively depreciated by the amount of the cut. This is a bitter turn of events, given Musk’s 2019 claims that a Tesla would be an appreciating asset.
I think the most profound thing is that if you buy a Tesla today, I believe you are buying an appreciating asset – not a depreciating asset.
– Elon Musk, CEO, Tesla
These comments were made in reference to Tesla’s full self-driving (FSD) capabilities, which Elon claimed would enable owners to turn their cars into robotaxis.
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