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>While I agree fixed costs shouldn't be ignored, isn't it true that they are called fixed costs for a reason Building cars is a capital and R&D intensive busin
by forgetsusername 11y ago
>While I agree fixed costs shouldn't be ignored, isn't it true that they are called fixed costs for a reason
Building cars is a capital and R&D intensive business. I'm not sure where the idea that those costs will basically go away comes form.
- ZeroGravitas 11y agoThey don't "go away", they get divided amongst a greater number of cars as production ramps up. It's not even just Tesla cars, as other electric cars come to market, the prices for components they need in common (battery being the big one) will fall with scale too. The battery is about half the cost of an electric car and battery prices have been dropping steadily, between 2007 and 2014 it halved (if you look a the whole market) or reduced by 2/3rds (if you look at leading manufacturers like Tesla) and are projected to continue to decline by 8-10% per year.