The large profit margin SUVs are necessary for a company to achieve scale to then be able to produce the smaller cheaper stuff. Fixed costs like the factory, tooling, training, designing, that all takes a lot of money up front before even selling a single vehicle, and the smaller and cheaper the vehicle coming out of that production pipeline is, the longer the payback period will be. And when we’re talking about billions of dollars in cost, it’s hard to remain solvent when interest payments on the debt grow exponentially over time.
It’s why before tesla there had not been an American auto company startup for like 70 years, Tesla almost went bankrupt, and Rivian is just starting to head in the right direction. Lucid is probably fucked and they’re mostly Saudi owned these days anyways, and the rest of the US EV startup space ranges from a joke to a scam.
What legacy automakers already have in staff and part of the production line established is actually kind of useless when they have to wait to establish their electric motor, battery, and chassis production, which probably just means a new factory anyways. Give it a few years and the cheaper smaller stuff will come, because right now AFAIK only tesla actually has the free cash flow to fund an EV economy car at scale. Everyone else is still sinking billions establishing any EV production at all, and interest rates aren’t helping the speed of their progress either.
“Car companies needs SUVs to survive financially!” is not a thoughtful response. It can easily be disproven by looking at the first 60 or so years of the automobile industry before SUVs were even a thing. The SUV takeover is a pretty recent phenomenon which has taken shape over the last twenty years.
I wouldn’t even call Tesla expensive (to make) or luxury. Every Tesla I’ve been in has seem empty, plain, and feels cheap. The only expensive part about it is the batteries and the labor to make it. I’m sure the price is just inflated due to all of the attention and hype that company has received over the years.
Sorry, best we can do is massive, expensive pseudo-luxury SUVs
The large profit margin SUVs are necessary for a company to achieve scale to then be able to produce the smaller cheaper stuff. Fixed costs like the factory, tooling, training, designing, that all takes a lot of money up front before even selling a single vehicle, and the smaller and cheaper the vehicle coming out of that production pipeline is, the longer the payback period will be. And when we’re talking about billions of dollars in cost, it’s hard to remain solvent when interest payments on the debt grow exponentially over time.
It’s why before tesla there had not been an American auto company startup for like 70 years, Tesla almost went bankrupt, and Rivian is just starting to head in the right direction. Lucid is probably fucked and they’re mostly Saudi owned these days anyways, and the rest of the US EV startup space ranges from a joke to a scam.
What legacy automakers already have in staff and part of the production line established is actually kind of useless when they have to wait to establish their electric motor, battery, and chassis production, which probably just means a new factory anyways. Give it a few years and the cheaper smaller stuff will come, because right now AFAIK only tesla actually has the free cash flow to fund an EV economy car at scale. Everyone else is still sinking billions establishing any EV production at all, and interest rates aren’t helping the speed of their progress either.
Aaand just like thst the actual thoughtful response is downvoted in the comment section. This places becomes more reddit each day.
“Car companies needs SUVs to survive financially!” is not a thoughtful response. It can easily be disproven by looking at the first 60 or so years of the automobile industry before SUVs were even a thing. The SUV takeover is a pretty recent phenomenon which has taken shape over the last twenty years.
I wouldn’t even call Tesla expensive (to make) or luxury. Every Tesla I’ve been in has seem empty, plain, and feels cheap. The only expensive part about it is the batteries and the labor to make it. I’m sure the price is just inflated due to all of the attention and hype that company has received over the years.
Small cars, small profits.