4 ms·

This is the trend of every US auto manufacturer though no? It's not like somebody is making a 25k SUV; the average price for a new car is like 40+k. Why leave

This is the trend of every US auto manufacturer though no? It's not like somebody is making a 25k SUV; the average price for a new car is like 40+k. Why leave 15k on the table? You can't just replace Musk and Tesla starts selling a 25k car.

buffington 2y ago
> You can't just replace Musk and Tesla starts selling a 25k car. Can't you? As a shareholder, I'd welcome a proposal to fire Elon Musk, whether his replacement could produce a 25k car or not. It's clear to me that he has no interest in the success of the brand and will gladly see it fizzle if he has his way.
- lern_too_spel 2y ago
  A majority shareholder vote decided to authorize an otherwise unnecessary payment to Musk, presumably to keep him as CEO. After that, a proposal to fire Musk would surely fail.
  - lesuorac 2y ago
    "otherwise unnecessary payment" is really an understatement. The payment is literally the last 3 years of profit [1]. [1]: pg 38 -- https://ir.tesla.com/_flysystem/s3/sec/000162828025003063/tsla-20241231-gen.pdf https://ir.tesla.com/_flysystem/s3/sec/000162828025003063/ts...
petee 2y ago
It's the context that they're planning a $25k robot taxi instead because automation is more important; it sounds like they can, and had wanted to make an affordable one, but Musk had a "vision" or something. Is a robot taxi really cheaper to make than a manual car? And who even wants that? That said, Musk has brought nothing to the table that someone else couldn't have, he gets far too much credit. He's just a talker. For example, the Cybertruck apparently had some great design ideas before he overrode the design team
- robocat 2y ago
  > Is a robot taxi really cheaper to make than a manual car? If we only look at the future costs to supporting a consumer vehicle over the long term there could be significant savings by avoiding those costs. No need to overengineer - design for X km not Y years. No need to engineer for fixing some accidents - maybe cheaper to write off vehicle: removes infrastructure costs and reduces parts inventory. No need to support vehicle after Y years - reduce long term maintenance. Design for fleet refreshes every Y years. Designing vehicle to be written off on accounts (depreciate - no resale): paper gains matter hugely to corporations. Optionality... If robotic hardware is improving rapidly then may be cheaper overall to build new vehicles than upgrade older fleet. Design for recycling. Handover old fleet from US to Mexico - keep using old vehicles in jurisdictions where liability and modern branding is less important.
yellowapple 2y ago
> It's not like somebody is making a 25k SUV; the average price for a new car is like 40+k. Why leave 15k on the table? How many more customers will you get with $25k cars instead of $40k cars?
- lesuorac 2y ago
  That's a non-sequitor though. OP's claim is that Tesla would be doing better without Musk as Tesla would be selling 25k cars; however, if every other US car company is not doing 25k cars there is no support to an argument that an alternative CEO for Tesla would do 25k cars. But to your actual question, the thing that matters is customers * margin. If each car comes with say 15k of overhead then even if you can double your units sold by dropping the price from 40k to 25k you are behind 20% in total profit.
  - yellowapple 2y ago
    > however, if every other US car company is not doing 25k cars there is no support to an argument that an alternative CEO for Tesla would do 25k cars. Sure there is: people ain't gonna pay an extra $15k for gits and shiggles. Unless those $40k cars are substantially better than the $25k cars, people are going to try to buy the $25k cars first. > If each car comes with say 15k of overhead then even if you can double your units sold by dropping the price from 40k to 25k you are behind 20% in total profit. So aim to sell double and a half, and then you've hit the same profitability as those $40k cars. Every extra sale past that would represent increased profit from the lower price-point. And this assumes that the extra sales volume (and therefore the production volume to satisfy it) wouldn't translate to reductions in that overhead due to economies of scale. If that doubled volume translates to a 16.67...% reduction in overhead, that'd also be enough to hit the same profitability as those $40k cars. Every extra sale or extra reduction in overhead past that would represent increased profit from the lower price-point.
dzhiurgis 2y ago
Tesla is already best value for money EV, people demanding lower is hard. But Tesla showed it’s possible to cut costs even more. A lot of people do indeed want smaller car than M3.

buffington 2y ago

> You can't just replace Musk and Tesla starts selling a 25k car. Can't you? As a shareholder, I'd welcome a proposal to fire Elon Musk, whether his replacement could produce a 25k car or not. It's clear to me that he has no interest in the success of the brand and will gladly see it fizzle if he has his way.

lern_too_spel 2y ago
A majority shareholder vote decided to authorize an otherwise unnecessary payment to Musk, presumably to keep him as CEO. After that, a proposal to fire Musk would surely fail.
- lesuorac 2y ago
  "otherwise unnecessary payment" is really an understatement. The payment is literally the last 3 years of profit [1]. [1]: pg 38 -- https://ir.tesla.com/_flysystem/s3/sec/000162828025003063/tsla-20241231-gen.pdf https://ir.tesla.com/_flysystem/s3/sec/000162828025003063/ts...

petee 2y ago

It's the context that they're planning a $25k robot taxi instead because automation is more important; it sounds like they can, and had wanted to make an affordable one, but Musk had a "vision" or something. Is a robot taxi really cheaper to make than a manual car? And who even wants that? That said, Musk has brought nothing to the table that someone else couldn't have, he gets far too much credit. He's just a talker. For example, the Cybertruck apparently had some great design ideas before he overrode the design team

robocat 2y ago
> Is a robot taxi really cheaper to make than a manual car? If we only look at the future costs to supporting a consumer vehicle over the long term there could be significant savings by avoiding those costs. No need to overengineer - design for X km not Y years. No need to engineer for fixing some accidents - maybe cheaper to write off vehicle: removes infrastructure costs and reduces parts inventory. No need to support vehicle after Y years - reduce long term maintenance. Design for fleet refreshes every Y years. Designing vehicle to be written off on accounts (depreciate - no resale): paper gains matter hugely to corporations. Optionality... If robotic hardware is improving rapidly then may be cheaper overall to build new vehicles than upgrade older fleet. Design for recycling. Handover old fleet from US to Mexico - keep using old vehicles in jurisdictions where liability and modern branding is less important.

yellowapple 2y ago

> It's not like somebody is making a 25k SUV; the average price for a new car is like 40+k. Why leave 15k on the table? How many more customers will you get with $25k cars instead of $40k cars?

lesuorac 2y ago
That's a non-sequitor though. OP's claim is that Tesla would be doing better without Musk as Tesla would be selling 25k cars; however, if every other US car company is not doing 25k cars there is no support to an argument that an alternative CEO for Tesla would do 25k cars. But to your actual question, the thing that matters is customers * margin. If each car comes with say 15k of overhead then even if you can double your units sold by dropping the price from 40k to 25k you are behind 20% in total profit.
- yellowapple 2y ago
  > however, if every other US car company is not doing 25k cars there is no support to an argument that an alternative CEO for Tesla would do 25k cars. Sure there is: people ain't gonna pay an extra $15k for gits and shiggles. Unless those $40k cars are substantially better than the $25k cars, people are going to try to buy the $25k cars first. > If each car comes with say 15k of overhead then even if you can double your units sold by dropping the price from 40k to 25k you are behind 20% in total profit. So aim to sell double and a half, and then you've hit the same profitability as those $40k cars. Every extra sale past that would represent increased profit from the lower price-point. And this assumes that the extra sales volume (and therefore the production volume to satisfy it) wouldn't translate to reductions in that overhead due to economies of scale. If that doubled volume translates to a 16.67...% reduction in overhead, that'd also be enough to hit the same profitability as those $40k cars. Every extra sale or extra reduction in overhead past that would represent increased profit from the lower price-point.

dzhiurgis 2y ago

Tesla is already best value for money EV, people demanding lower is hard. But Tesla showed it’s possible to cut costs even more. A lot of people do indeed want smaller car than M3.