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"Apple is a high margin company and the car business yields low margins." And now what if Apple comes in and it doesn't anymore? Tesla appears to have 30% or s

"Apple is a high margin company and the car business yields low margins." And now what if Apple comes in and it doesn't anymore? Tesla appears to have 30% or so margins on cars [1]. Why couldn't Apple make that higher, or increase margin by bundling different types of subscriptions or integrations with other Apple products? Enjoyed the article though. [1] https://www.teslarati.com/tesla-gross-margin-wiggle-room-ev-affordability/ https://www.teslarati.com/tesla-gross-margin-wiggle-room-ev-...

SirHound 5y ago
Yep if you looked at the android smartphone market you’d draw the same conclusion
- ksec 5y ago
  Yes and that is why I was never bought the low margin argument for Apple not doing TV. Especially when Android Smartphone for a period of time were negative margin. That said I still dont think Apple should make a car. But it seems all is too late.
klelatti 5y ago
Yes. Those low margins reflect commoditisation of large majority of cars. In the era when cars are computers on wheels it should be easier to avoid this. In particular Apple can distinguish itself from others through high degree of integration with other Apple products.
Factorium 5y ago
Last-generation automakers sold expensive, complex ICE vehicles and made money back on parts and servicing. EVs are much cheaper and simpler to manufacture and last basically forever.
- toyg 5y ago
  > EVs [...] last basically forever. That's not what I heard about their batteries, which need replacing way more often than a regular ICE setup (i.e. every small-single-digit years vs every 15 years or so). Also, it's true that electric engines see less stress, but a lot of the rest of the car is still a car.
  - Factorium 5y ago
    Tesla batteries are only losing 10% of capacity after 200,000 miles: https://electrek.co/2021/08/12/tesla-claims-battery-packs-lose-only-capacity-200000-miles/ https://electrek.co/2021/08/12/tesla-claims-battery-packs-lo...

SirHound 5y ago

Yep if you looked at the android smartphone market you’d draw the same conclusion

ksec 5y ago
Yes and that is why I was never bought the low margin argument for Apple not doing TV. Especially when Android Smartphone for a period of time were negative margin. That said I still dont think Apple should make a car. But it seems all is too late.

klelatti 5y ago

Yes. Those low margins reflect commoditisation of large majority of cars. In the era when cars are computers on wheels it should be easier to avoid this. In particular Apple can distinguish itself from others through high degree of integration with other Apple products.

Factorium 5y ago

Last-generation automakers sold expensive, complex ICE vehicles and made money back on parts and servicing. EVs are much cheaper and simpler to manufacture and last basically forever.

toyg 5y ago
> EVs [...] last basically forever. That's not what I heard about their batteries, which need replacing way more often than a regular ICE setup (i.e. every small-single-digit years vs every 15 years or so). Also, it's true that electric engines see less stress, but a lot of the rest of the car is still a car.
- Factorium 5y ago
  Tesla batteries are only losing 10% of capacity after 200,000 miles: https://electrek.co/2021/08/12/tesla-claims-battery-packs-lose-only-capacity-200000-miles/ https://electrek.co/2021/08/12/tesla-claims-battery-packs-lo...