There is a fundamental truth you have to understand about car companies:They do not exist to make cars. They exist to make money. That distinction, analyst Kevin Tynan tells me, is why they’re not really interested in making affordable electric vehicles.
Perhaps that’s an oversimplification. Tynan is the director of research at an auto-dealer-focused investment bank, the Presidio Group, with decades of experience as an analyst at firms like Bloomberg Intelligence. What he means isn’t that automakers have no interest in affordable products. It’s that their interest begins and ends with winning customers who will eventually buy more expensive, higher-margin products.
One of the auto industry’s dirtiest secrets is that at scale, it doesn’t cost that much more to make a bigger, more expensive than a smaller and cheaper one. But they can charge you a lot more for the former, which makes this a game of profit margins and not just profits. In recent years especially, that’s a big part of why your new car choices have skewed so heavily toward bigger crossovers, SUVs and trucks.
The number in OP was $25k
For electric cars yes. (As opposed to the civic question). The reason I would posit is a culmination of my points. Companies love to over engineer these systems to justify high R&D to allow prices (and margins) to go up.
Manufacturing costs go down but also there is an increase in technology, fuel efficiency, and especially safety.
Not something you or I could answer, but are these costs truly matching inflation? In this era I am hard pressed to believe profits are still only 10% that is listed online.
No one is doing that. Just because it has the same name doesn’t mean it’s even remotely the same car as it was 20 years ago…
Many parts do the exact same stuff they used to. A radio head unit nowadays is the same head unit 3 and 5 years ago in a new shell. Bluetooth, USB, Apple/Android carplay, am/fm. And now they’re hooked up to the touchscreens. Why change what already works in a new facelift year, except for no reason other than to intentionally prevent parts from becoming commonplace. The rims I mentioned. No one will notice when buying a car if those rims were reused those 4 years.
Because backup cameras were mandated in 2016.
A friend owns a 2019 Ford Fiesta that has a backup camera on the installed screen that’s 5 inches tall to 6 inches wide. It’s incredibly minimalist and I know most people do enjoy an infotainment system now. That doesn’t change my point here that brands embraced putting an iPad in your car, and won’t give you buttons back because the ever increasing size screens are incredibly cheap compared to the radio/climate/headlight buttons you see people bemoaning they want back. It also feeds back to the “you can’t fix it yourself” problem that car brands have manufactured for consumers.
For electric cars yes.
Doesn’t matter. The entire point of the article was that EVs can’t be made inexpensively because there’s not enough profit in inexpensive vehicles. I brought up the vehicles I did because it disproves that theory.
are these costs truly matching inflation?
Probably not. Still nothing to do with EVs.
Many parts do the exact same stuff they used to.
That doesn’t mean they’re the same part.
A radio head unit nowadays is the same head unit 3 and 5 years ago in a new shell
No.
