Battery based vehicles of today and tomorrow pt 2

[Fuddyduddy1952]

So, you know I'm a design engineer, I've spent my whole career designing product and then watching marketing folks do their magic in pricing the product. It's almost never "cost-plus", there are many more dominant factors in setting the price of a product, than cost. What will the market bear? How does it fit into our product hierarchy? Should this be a loss leader, to keep a customer in-brand or in-dealer? What will we make on service and/or subscriptions? What is the warranty cost of each model and feature group?

I would be very surprised if the price of any car is directly related the cost of the feature set included. I don't believe a $100k car has a BOM + direct labor cost that is 5x higher than a $20k car. The pricing is a function of other factors.

Moreover, there's enormous economies of scale at work in direct costing of cars. If ALL cars had the same tech features, it would likely cost less than removing them from 80% of the fleet, just for the sake of charging premiums on 20% of the fleet.

I agree...choices (to me) is the key. If someone wants a $80K Lightning overflowing with features kept waxed, tires never touching lawn, ok by me. If I want a stripped 2dr 8' bed truck for $25K...it should be available...but manufacturers make what people desire, not necessarily need or for intended purpose.

 

[WinterDeere]

The electric grid must be improved with more chargers.

This is where I think many people are thinking backwards about the problem. More EV's creating more off-peak load will ultimately reduce energy costs, by reducing our presently-enormous peak/off-peak ratio.

Many of the lowest cost and lowest-impact forms of energy production have throttling time constants unsuitable for more than our off-peak load, so we're forced to use higher-cost generation to satisfy the off-peak to peak difference. Nukes can't be throttled up to full peak demand every morning, targeting our daytime high in late afternoon, and then way down to our off-peak lows at 3am. So, they run them near off-peak demand, and modulate the peak demand with coal and other sources.

Sure, some will charge EV's during peak hours, which will require us to continue expanding the grid. But even more will charge off-peak, solving a presently-enormous problem with energy storage.

 

[WinterDeere]

I agree...choices (to me) is the key. If someone wants a $80K Lightning overflowing with features kept waxed, tires never touching lawn, ok by me. If I want a stripped 2dr 8' bed truck for $25K...it should be available...but manufacturers make what people desire, not necessarily need or for intended purpose.

I agree choice is preferred... because I can afford it. But truly lowest cost would be achieved by eliminating choice, and bringing those $80k vehicle prices way down. I wouldn't be surprised if the $80k vehicle could land at $35k, by eliminating all costs related to configuration and purchasing volumes.

Henry Ford figured this out 110 years ago. Remember, "you can have your car in any color you like, as long as it's black"? He knew that even changing the paint color would add enormous cost.

edit: And I'm not saying that the direct costs would come down more than half by eliminating choice. Again, I think there's very little relationship between high-end vehicle pricing and true cost.

 

[NoTrespassing]

I think a big part of the price increase in cars and trucks has to do with the "nanny state". How much cheaper could a manufacture produce a vehicle if it didn't have to meet the stringent CAFE standards or include back up cameras, antilock brakes, low tire pressure sensors, airbags, etc. etc. Most of the items mentioned are to protect the consumer from himself imo. I wonder how many would choose a vehicle without the aforementioned items if they had the freedom to. My 08 Accent was $12,500 new and it adhered to the CAFE standard, had antilock brakes and airbag. Without those items and CAFE standards, Hyundai could probably have sold it for under $10,000.

 

[wawajake]

Henry Ford didn't require that the Government shoot most of the horses and tax the hay , so he could sell his Model Ts . He built a good product that people wanted at a affordable price....

 

[NoTrespassing]

Tesla Less Appealing To Car Rentals? Europe's Sixt To Phase Out Tesla Cars After Hertz​

Europe’s biggest car rental company Sixt SE, is reportedly phasing out Tesla Inc (NASDAQ:TSLA) EVs from its fleet for the same reasons as American car rental company Hertz Global Holdings Inc (NASDAQ:HTZ).

What Happened: Sixt is looking to reduce the Tesla vehicles in its fleet owing to the higher repair costs of electric cars as compared to combustion engine vehicles coupled with lower resale values, Bloomberg News reported, citing an email sent to customers.

Despite backtracking on the U.S. EV giant, the company still intends to electrify as much as 90% of its European fleet by the decade’s end.

Why It Matters: American car rental Hertz flagged similar concerns in October. Hertz announced its intention to scale back its EV fleet, especially Tesla vehicles, during its third-quarter earnings call. The company cited higher collision and damage repair costs for EVs compared to traditional vehicles, impacting results in the last quarter and negatively affecting EBITDA.

Hertz CEO Stephen Scherr explained that the decline in the Manufacturer's Suggested Retail Price (MSRP) of EVs, particularly Tesla, throughout 2023 led to a lower fair market value for Hertz's EVs compared to the previous year. This decrease resulted in larger losses and higher burdens in the event of salvage, negatively affecting EBITDA. Scherr emphasized that the third-quarter EBITDA margin would have been significantly higher if the entire fleet were traditional combustion engine vehicles.

Hertz expressed its plans to purchase EVs from other manufacturers with established part supply networks at lower price points. Although the company initially aimed for 25% of its fleet to be electric by the end of 2024, Scherr clarified that it's not a rigid timeline.

MSN

 

[Fuddyduddy1952]

This is where I think many people are thinking backwards about the problem. More EV's creating more off-peak load will ultimately reduce energy costs, by reducing our presently-enormous peak/off-peak ratio.

Many of the lowest cost and lowest-impact forms of energy production have throttling time constants unsuitable for more than our off-peak load, so we're forced to use higher-cost generation to satisfy the off-peak to peak difference. Nukes can't be throttled up to full peak demand every morning, targeting our daytime high in late afternoon, and then way down to our off-peak lows at 3am. So, they run them near off-peak demand, and modulate the peak demand with coal and other sources.

Sure, some will charge EV's during peak hours, which will require us to continue expanding the grid. But even more will charge off-peak, solving a presently-enormous problem with energy storage.

13 hours ago:
U.S. climate envoy John Kerry said he thinks coal plants should not be “permitted anywhere in the world.”

 

[Fuddyduddy1952]

I agree choice is preferred... because I can afford it. But truly lowest cost would be achieved by eliminating choice, and bringing those $80k vehicle prices way down. I wouldn't be surprised if the $80k vehicle could land at $35k, by eliminating all costs related to configuration and purchasing volumes.

Henry Ford figured this out 110 years ago. Remember, "you can have your car in any color you like, as long as it's black"? He knew that even changing the paint color would add enormous cost.

edit: And I'm not saying that the direct costs would come down more than half by eliminating choice. Again, I think there's very little relationship between high-end vehicle pricing and true cost.

Affordability is irrelevant to me...practically is #1. Why should I pay for things I don't want/need or ever will use.

 

[Gale Hawkins]

It seems that Tesla is the only vehicle maker to move prices back to normal pre covid levels so we should see $10K price drop off average new car selling prices over 2024 as others do the same.

When Tesla is selling 5 million $25K EVs annually that should open up the new car market for more young families. My 2023 Model Y that was $66K last Christmas can be had for $42K by many this Christmas.

This fact burns Hertz's butt bad.

 

[Fuddyduddy1952]

It seems that Tesla is the only vehicle maker to move prices back to normal pre covid levels so we should see $10K price drop off average new car selling prices over 2024 as others do the same.

When Tesla is selling 5 million $25K EVs annually that should open up the new car market for more young families. My 2023 Model Y that was $66K last Christmas can be had for $42K by many this Christmas.

This fact burns Hertz's butt bad.

I would be upset paying $66K then a year later able to get the exact same car for $42K