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Several things that aren't regularly talked about: to meet increasingly stringent emissions standards without massive losses in engine power (and resulting cust
by wcunning 2y ago
Several things that aren't regularly talked about: to meet increasingly stringent emissions standards without massive losses in engine power (and resulting customer dissatisfaction), companies spend heavily on powertrain R&D to eke the remaining emissions improvements out (99.9% reduction to 99.99% reduction). To meet increasing safety standards, manufacturers have to have much more complicated base models than before, which drives up even the lowest car prices -- backup cameras, automatic emergency braking cameras and logic, immobilizer standards, etc. Then, for the products that everyone wants, some manufacturers aren't even making the new CAFE standards, so they buy "indulgences" (EV offset credits) from Tesla, which is literally a regulatory tax for the incorrect outcomes, but customers don't want GM and Ford EVs at the moment. Beyond that, some solutions to the above problems (hybrids) are simply insanely expensive (ballpark $20k extra manufacturing cost for a hybrid powertrain on some high end hybrid SUVs vs the identical engine without the electric components). All of that shifts parts of the curve to the right, some of it only shifts the high end, some of it shifts the entire curve.
- arghnoname 2y agoAuto company profit margins provide further evidence supporting your hypothesis (modern car requirements are just inherently more expensive). The auto companies whose profit margins I checked are in the single-digits, sometimes negative. If it was just greedy price gouging, we'd expect them to see much healthier profit margins. I don't understand why people don't check these figures more often for these publicly traded companies when offering the 'companies are being greedy' narratives.
- throw10920 2y agoThank you for detailed response!