4 ms·
This depends on if they actually charge you for it upfront in the MSRP. Say the cost for a motor made of x material is $2000 more than a lower spec motor made
by judge2020 4y ago
This depends on if they actually charge you for it upfront in the MSRP.
Say the cost for a motor made of x material is $2000 more than a lower spec motor made of z. So here they could make two specs, say charge $5000 more for the better motor, and profit $3,000 when anyone with a kick for adrenaline chooses the better motor.
However, there are hidden costs to inventorying multiple different variations of the main drive train of your car. You are no longer sharing parts, so you now need two lines making that motor, you need to split the warehousing space, you need some sort of analytics / data scientists to tell you how many of each motor you need to order. In this scenario, the cost to this amount of inventorying something as critical as the main drive unit might be a thousand dollars per unit or so (of course decreasing with scale), but it means your margins aren't simply profit - BOM.
Taking these small increments in profit (at the expense of making the logistics of your plant more complex) was all the rage for Ford and GM throughout the 1990s-now with 20 different trim levels for a model, but with EVs specifically the extra trim levels make you feel like you're missing out on the most fun or useful parts of a car, and the automaker really isn't making that much extra money when it's all said and done (and it results in the car feeling cheap after the honeymoon period).
In this case, the $60/month is optional. This means that Mercedes can take the negligible hit on their bill of materials, but this will likely be offset by, and made profitable by, the people who do pay for it every month over the lifespan of the car - there is a lot of FOMO and getting to click a button that says "increase the dopamine I get by punching the throttle this month" might be what people want if they think they shouldn't splurged for a different ev x months ago.
- JediWing 4y agoor, crazy thought, pass the cost savings of not having to manage multiple trimlines onto the consumer instead of trying to make a quick buck by artificially borking the motor.
- ShroudedNight 4y agoThe all-fronts assault on consumer surplus is definitely depressing.
- pc86 4y agoOf course they're charging up front. The goal is to make as much money as possible. What's much more likely to happen, especially with a brand like Mercedes, is instead of charging $A for trim x and $1.1A for trim z, they'll just charge $1.1A for both and tack the subscription fee on.