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> I don’t think they want to dilute their brand with a Subcompact car The affordable EV for everyone will be the making of Tesla's brand. It will increase Te

> I don’t think they want to dilute their brand with a Subcompact car The affordable EV for everyone will be the making of Tesla's brand. It will increase Tesla's footprint on earth 100 fold, and realise Musk's ambition to impact society as much as Henry Ford did 100 years earlier. But your point about branding strategy is a different one. It used to be the case that brands would try to isolate and hone their identities to specific niches, particularly in the luxury class. In the case of automobiles, Mercedes Benz moved on from there to become a very large car maker, whilst retaining its luxury mark. It had to, because sustaining a lead in an expensive manufacturing and design product category requires scale that is commensurate with the capital requirements of the industry. In the case of EV, that capital requirement is huge, and Tesla already has it. But to achieve ROI on all of that capital, Tesla needs scale to monetise its technical leadership. If Tesla doesn't produce the mass market affordable EV of the future asap, one of its competitors will leapfrog it one way or another.

Retric 6y ago
Traditionally the competition and thus margins on ultra cheap cars where so low they basically acted as loss leaders to get people into dealerships who could up sell used cars or make it back on repairs. Tesla’s showroom model breaks the benefits of that approach which makes competing at the very bottom of the market less appealing especially as their currently constrained by manufacturing capacity. It’s different in China where a 250 mile 25k car would still be aspirational for many people. Though the US market might look at a 200 mile range 25k EV with a 300 mile range option at ~30k as a slightly different story with significant upsell possibilities for Tesla.
- prepend 6y ago
  This is really false, or was true until Toyota and Honda came in with high profit, low cost cars in the 70s/80s.
  - Retric 6y ago
    You can get a Mirage starting at $13,995, yet Toyota’s cheapest car comes in at $19,925 a 40% price bump. Companies really do avoid the segment.
    - SECProto 6y ago
      The Yaris was available for roughly $14k up until a year or two ago (I only know the Canadian price, which was I think $15,900 cad). It was discontinued because it didn't sell well enough. Similarly, Nissan had the Micra available in Canada up until a year or two ago.
      - Retric 6y ago
        US Yaris was disconnected in 2020. Even the Mirage jumps 9% this year from 14k to 15,290 in 2021 with a hefty 995$ destination charge. Companies really have been abandoning this sediment because as I said it’s unprofitable.
        SECProto 6y ago
        You say it was discontinued because it was unprofitable. I say it was discontinued because it was unpopular. Neither of us has shown any actual proof one way or the other
        fomine3 6y ago
        Those subcompacts are still sold on outside NA so latter is plausible.
    - prepend 6y ago
      They don’t sell the absolute cheapest, but they sell a lot of low cost cars. They don’t avoid the low cost segment. $20k is low cost these days, even though the absolute cheapest US car is $14k. Toyota just discontinued its Yaris that was $17k and Honda still sells its Fit for $16k. There’s a ton of cars to be sold at the $25k level, profitably. The upsell of new versions down the road is just gravy.
- wombatmobile 6y ago
  The low cost car of the 1970's was a different prospect to the low cost car of 1914. https://corporate.ford.com/articles/history/the-model-t.html https://corporate.ford.com/articles/history/the-model-t.html
dzhiurgis 6y ago
There are so many affordable EV's in Europe and China, but Tesla is just a bit more exciting with range and acceleration - not everyone needs that. It's an iPhone SE equivalent.

Retric 6y ago

Traditionally the competition and thus margins on ultra cheap cars where so low they basically acted as loss leaders to get people into dealerships who could up sell used cars or make it back on repairs. Tesla’s showroom model breaks the benefits of that approach which makes competing at the very bottom of the market less appealing especially as their currently constrained by manufacturing capacity. It’s different in China where a 250 mile 25k car would still be aspirational for many people. Though the US market might look at a 200 mile range 25k EV with a 300 mile range option at ~30k as a slightly different story with significant upsell possibilities for Tesla.

prepend 6y ago
This is really false, or was true until Toyota and Honda came in with high profit, low cost cars in the 70s/80s.
- Retric 6y ago
  You can get a Mirage starting at $13,995, yet Toyota’s cheapest car comes in at $19,925 a 40% price bump. Companies really do avoid the segment.
  - SECProto 6y ago
    The Yaris was available for roughly $14k up until a year or two ago (I only know the Canadian price, which was I think $15,900 cad). It was discontinued because it didn't sell well enough. Similarly, Nissan had the Micra available in Canada up until a year or two ago.
    - Retric 6y ago
      US Yaris was disconnected in 2020. Even the Mirage jumps 9% this year from 14k to 15,290 in 2021 with a hefty 995$ destination charge. Companies really have been abandoning this sediment because as I said it’s unprofitable.
      - SECProto 6y ago
        You say it was discontinued because it was unprofitable. I say it was discontinued because it was unpopular. Neither of us has shown any actual proof one way or the other
        fomine3 6y ago
        Those subcompacts are still sold on outside NA so latter is plausible.
  - prepend 6y ago
    They don’t sell the absolute cheapest, but they sell a lot of low cost cars. They don’t avoid the low cost segment. $20k is low cost these days, even though the absolute cheapest US car is $14k. Toyota just discontinued its Yaris that was $17k and Honda still sells its Fit for $16k. There’s a ton of cars to be sold at the $25k level, profitably. The upsell of new versions down the road is just gravy.
wombatmobile 6y ago
The low cost car of the 1970's was a different prospect to the low cost car of 1914. https://corporate.ford.com/articles/history/the-model-t.html https://corporate.ford.com/articles/history/the-model-t.html

dzhiurgis 6y ago

There are so many affordable EV's in Europe and China, but Tesla is just a bit more exciting with range and acceleration - not everyone needs that. It's an iPhone SE equivalent.