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“The demand for Model 3 is insanely high. The inhibitor is affordability. It’s just that people literally don’t have the money to buy the car.” Saying your pro
by mdorazio 8y ago
“The demand for Model 3 is insanely high. The inhibitor is affordability. It’s just that people literally don’t have the money to buy the car.”
Saying your product is in high demand when people can't afford it is pretty ridiculous. By that logic, demand for Ferraris is through the roof even though they only sell a few thousand a year.
- joekrill 8y agoYes but Ferrari has no intention of making their product affordable for those that want it, even if they were able to. Tesla wants to offer an affordable car that more folks can afford. It's been making steady progress in getting to a lower price point, but there are still A LOT of people that would buy a Tesla if it were just a bit more affordable.
- gamblor956 8y agoCompanies make products affordable by lowering the unit cost of the product (generally through increased efficiencies, economies of scale, substituted inputs, etc), not by cutting non-COGS operating expenses. Reducing unit costs affects every unit sold equally, so it scales with sales growth. The benefits of cutting opex expenses is inversely correlated to sales growth.
- ams6110 8y agoI'd say that remains to be seen. There isn't a Tesla in the "affordable" segment yet, so we don't know what the demand is.
- CPLX 8y agoIndeed. It's worth noting that affordability is the inhibitor for nearly all non-worthless products.