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> the article claims the main reason for them losing so much money is lack of throughput, which demonstrates that the claim is bullshit. If they made even more
by giobox 3y ago
> the article claims the main reason for them losing so much money is lack of throughput, which demonstrates that the claim is bullshit. If they made even more cars and "lost 30K" on each one they'd be worse off.
Generally speaking, the cost per unit goes down as throughput goes up, especially in the car manufacturing space. Production rate is insanely important to car manufacturers making any money at all.
Virtually every single new mass produced vehicle ever made started off losing money on a per-unit basis until manufacturing scales.
- datadrivenangel 3y agoExactly right. cost per unit = cost per unit + total non-unit costs/total units. So they're loosing money overall, but the unit economics may still work.
- throwawaaarrgh 3y agoGenerally speaking, you can't generalize vehicle production with new companies, or even old ones. Vehicle production is extremely complicated and expensive. Minor quality errors lead to increasing delays and costs. Famously, GM used to spend ridiculous amounts of time and money to fix cars coming out of some of its plants. It wasn't uncommon for some cars to be incapable of being driven out of the plant. The more cars they made, the more errors, and the more time and money spent on fixing them. This was a major factor in the development of the NUMMI plant. What brings cost down is increased quality, reduction of waste, and increase of speed. If you don't have all three you aren't gonna save money.