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Oh, my point was not to criticize Tesla's strategy. They chose the correct strategy. Working from the top down is the right course when you need to preserve fun
by mrcwinn 13y ago
Oh, my point was not to criticize Tesla's strategy. They chose the correct strategy. Working from the top down is the right course when you need to preserve funds (high margins) and can't yet scale (general production, battery, limited demand at the time). My point was simply that it's a flawed argument to say you can maintain high margins, while still servicing the mass market with the absolute best design, materials, manufacturing.
If a car manufacturer could, it would be disruptive - but it's the exception, not the rule. That said, I think Tesla's the most likely candidate to do this! But it's worth noting they did it from the top moving downstream. It's more difficult to do this when you're starting at the position of a Kia or even a Toyota. It's not just about throwing money at the problem, and that, I believe, is contrary to Musk's argument.
- tracker1 13y agoI don't think there's much in that car manufacturers can not do to be far more competitive with lower margins. Look at today's mid-upper range from say Hyundai, they tend to have a lot of features that would be in a 2-4 year old Buick or Mercedes for 1/2 to 1/4 the price. I had a 2009 Hyudai Sonata 4-dr with the v6 before my current car, and liked it a lot. It was about 1/2 the price of the car I have now. To be honest, I can't even really get the most out of my V8 for day to day driving, and mostly got the new car for coolness factor (2012 Challenger R/T). There's times I also miss my pickup truck. I also accept that for the most part, I'm not most people. Just the same, I have no doubt that Hyundai or Kia could match Mercedes, BMW, Catillac and the like for a significantly lower price. The rules of economics still apply though. The image of a "lesser" brand would not be offset by higher quality to increase demand/price. Why do you think Toyota sells their high end under the Lexus brand? Beyond all this, there's nothing wrong with selling a product for as much as you can get.