Question: What is stopping from a new or old entrant from creating a $10-15K electric car? American mfg may be slightly better at automation than China.
> American mfg may be slightly better at automation than China
Doubtful. It’s hard for a country which has been consistently outsourcing the production of anything remotely complex to do better than one which has been the top producer of manufactured goods for decades. Tesla tried and mostly failed.
Plus automation is expensive and require large volume to be profitable. American cars historically have limited appeal abroad and the market is extremely competitive which doesn’t help.
Tesla seems to be doing pretty OK on the manufacturing side. These days quality of the physical product is decent enough and the price of their different models are highly competitive in their respective segments.
The flaws in Teslas cars are mostly design choices (plastic seats instead of cloth/leather, bad ergonomics due to focus on minimalist aesthetic, uncomfortable suspension setup etc, etc). Some of it is following trends, some of it is Elons stupid ideas.
Financially it seems like Teslas big problem is the AI-investments. Burning unfathomable amounts of cash on useless software, instead of putting that money towards developing their model lineup and improving quality on things that matter.
> These days quality of the physical product is decent enough and the price of their different models are highly competitive in their respective segments. [...] The flaws in Teslas cars are mostly design choices
These two parts don't really go together from my point of view. Tesla is often pricing a car with mid-range quality as a premium model.
Personally, I think they are not very competitive anymore in the segments they operate in. They used to have first mover advantage but now historic manufacturers have similar cars on offer. At the entry level, in as much as they have a vehicle there, they are not competitive at all compared to the Asian manufacturers.
I am more worried about the plummeting sales than the AI investments.
When I picked my Model Y the main competition was Kia EV6 and VW ID7. The monthly lease+insurance was $600 for Tesla, $850 for Kia and $1000 for VW.
To get down to Model Y-level costs, I would have had to settle for a barebones ID4 or an MG. In that comparison the Model Y is a wonder of pace, space and grace.
I don't like my Model Y, I sort of hate it, but if I had to make the choice again and the relative prices (and my car-needs) were the same, it would be a tight race. I'm pretty sure there will be better options next time, though.
Tesla learned how to do manufacturing from the Chinese. The first plant they built themselves was designed, built and run by the Chinese, and then basically copied to Germany. The Texas plant is an evolution of that.
That manufacturing edge is the reason Tesla is still profitable despite its massive drop in sales.
Bolt EV was 20K after tax rebate (and that is an US car, ie. it has more safety and other required features than say a 12K car legal in many other countries). Not many people bought. Instead they buy more expensive EVs. While GM probably didn't make much money on each Bolt. Now Equinox EV, something like 28K after tax rebate. Not many people buying. Again they are buying more expensive EVs. And GM probably doesn't make much on the Equinox EVs. Talked with an owner of one - great car, very inexpensive lease, so while being price conscious he went for a pretty loaded config.
So, i think 10-15K car in US has no buyers, and no margin to make it worth for the manufacturer.
I am following the development of a new company called Slate who are specifically trying to build low cost EV's by shunning gimmicky BS like "self driving" and selling them with only an extremely limited number of options from the factory.
There'd be no demand for it - the median American takes home about $40k a year, while a Civic (which is a very decent car all things considered), costs $25k, not to mention tons of cheaper options if you buy used.
There's just no one willing to buy these entry level cars, except as maybe second commuter cars.
