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Are marginal costs enough to see the impact of offering multiple options? My concern is that by having so many battery & other options, Tesla is probably requir

by slykat 15y ago

Are marginal costs enough to see the impact of offering multiple options? My concern is that by having so many battery & other options, Tesla is probably requiring different manufacturing processes, different equipment, which can dramatically affect costs (esp. fixed costs). To put it more simply, if you offered only 1 option, you manufacture at scale and can easily bring down unit costs. However, if you are offering, say 3 options that means you split your scale by 1/3 and its harder to bring unit costs. This wouldn't be an issue if the parts being built were commodity items but I assume a lot of the parts for Tesla are quite customized / niche. To put it another way, I remember reading that for some American manufacturers it was actually more costly to produce manual cars since demand is so low in the US and assembling them would require a separate line which would reduce efficiency. However I really don't know anything about manufacturing cars. Anyone with auto industry experience want to chime in?

yardie 15y ago
Tesla is probably requiring different manufacturing processes, different equipment, which can dramatically affect costs (esp. fixed costs). What manufacturing process are you speaking of? It's a single chassis and single production line. All the parts are bolted on the same way in the same places. I've worked in a radio factory and it is a highly synchronized machine. All the parts arrive in the right place at the right time. For build cost it only adds a marginal amount which Tesla appears to be recouping. to produce manual cars since demand is so low in the US and assembling them would require a separate line which would reduce efficiency. This information is probably out of date. Most cars today are FWD. The gearbox is mated to the engine block and then dropped onto the chassis. They only have to select the proper linkages and shifter. It might be 1:10 US cars that are manual but I don't think it needs a separate line for this.
- slykat 15y ago
  Makes sense - good to know. So basically there are no scale advantages with going with one battery type instead of 3?

by slykat 15y ago

yardie 15y ago

Tesla is probably requiring different manufacturing processes, different equipment, which can dramatically affect costs (esp. fixed costs). What manufacturing process are you speaking of? It's a single chassis and single production line. All the parts are bolted on the same way in the same places. I've worked in a radio factory and it is a highly synchronized machine. All the parts arrive in the right place at the right time. For build cost it only adds a marginal amount which Tesla appears to be recouping. to produce manual cars since demand is so low in the US and assembling them would require a separate line which would reduce efficiency. This information is probably out of date. Most cars today are FWD. The gearbox is mated to the engine block and then dropped onto the chassis. They only have to select the proper linkages and shifter. It might be 1:10 US cars that are manual but I don't think it needs a separate line for this.

slykat 15y ago
Makes sense - good to know. So basically there are no scale advantages with going with one battery type instead of 3?