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> 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 wi

> 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.

> 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.