Labor is the main expense in car manufacture. Materials for a larger
vehicle add only an incremental cost. Luxury options cost just a tiny
faction of what they consumer pays for them. It is not uncommon that the
luxury option is just a change to the firmware and the additional cost
to the manufacturer is actually zero.
This is why there has always been a push for larger cars and SUV's.
Larger = more profits.
If you consider that all cars, regardless of size, have just four
wheels, four brakes, four tires, one engine, one steering wheel, one
engine management computer, etc. The labor is the same to assemble, not
matter what size the car is. As the car grows in size, it is a larger
shell of the same thickness, but the extra internal volume is air. The
materials scale with the surface area, and not the volume. People are
willing to pay considerably more a larger car, but they cost close to
the same to manufacture.
You perceive that you are buying a bigger banana, but you are in reality
just buying a bigger banana peel. The edible/nutritious/useful portion
is unchanged.
People buy cars for emotional reasons, not for practical reasons. The
automakers exploit that. Why wouldn't they?
Bill D.
On 1/21/2023 12:54 PM, Lee Hart via EV wrote:
Lawrence Rhodes via EV wrote:
I keep hearing that Tesla might introduce a smaller, cheaper EV.
That would
open up EVs to a wider range of drivers, but would also cut into their
profits.
I continue to wonder why a smaller cheaper car would mean lower
profits. It seems like there are endless examples of cars (and many
other products) where profits *increased* when cheaper versions were
produced in higher volumes.
A smaller car uses less materials, so can be cheaper to produce.
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