• 3 Posts
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Joined 10 months ago
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Cake day: January 2nd, 2024

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  • I’m skeptical of the problem being that simple. I think if that were the only issue, we would have cheaper cars.

    Part of the rational for producing high margin trucks and SUVs is that investors demand the most margin possible out of every unit of production capacity. If a factory can only turn out 100 vehicles a year, its more profitable to turn out an expensive SUV that only 100 people can afford, compared to selling 100 cheap sedans that thousands of people want but you just can’t produce enough of them.

    If there were overcapacity, then in a vacuum, it would make sense to put it to work turning out low margin cars that are in high demand and making some money with that capacity instead of no money.

    But its hard to predict years in advance when your factories are going to have excess capacity, and to know when to begin years long engineering projects so the vehicles you’re going to want to produce will have their designs finished in time to fill those gaps. And its extra risky to begin those kinds of long range projects during times of rapidly changing regulations of ICE vehicles, and rapidly advancing tech for EVs that might invalidate years of engineering and factory tooling investments because you can’t sell the vehicle you planned to produce for a long enough time to make back your investment and start seeing a profit. Not that I’m anti-regulation - I like breathing clean air and drinking clean water.


  • That’s R&D cost divided over a small number of vehicles, not the cost of material and labor that goes into each vehicle. It only looks bad on paper.

    For example, if you invest $100 in R&D and it costs $1 to produce each car, then the first car out of the factory costs $101. Sell that first car for $10 and you’ve “lost” $91. But if you can sell 100 cars, then each car only costs $2, not $101, and now on paper it looks like you’ve made $8 on each sale.

    Time will tell if Ford made the right decisions about what kind of car to engineer and if consumers will continue to buy it long enough to make back the one time R&D expenses. That would happen faster if their margins on labor and material is high, like it is on trucks and SUVs, which makes those a safer investment.


  • Wait a minute, are you talking about taxi services? Those are for people who don’t own a car when they need to make short trips that can’t be done through public transportation. For people who do own a car, those kinds of short trips can be done with a PHEV without burning any gas.

    For longer trips, its cheaper and more convenient to rent a car compared to taking a taxi. Yes, if the trip is to someplace with chargers along the way, an EV would be ideal. Yes, if there are no chargers along the way, then a HEV would be ideal. But a PHEV is almost as good as an HEV in that case - certainly better than a diesel in terms of emissions - and it lets you make the short trips without burning any gas, without having to make car rental reservations for long trips to areas without chargers, and without needing to purchase an entire second vehicle for driving in areas that do have chargers.