this post was submitted on 21 Aug 2024
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Electric Vehicles

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Why No One Wants To Sell You A $25,000 EV (insideevs.com)
submitted 2 months ago by MyOpinion@lemm.ee to c/evs@lemmy.world
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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.

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[–] ShepherdPie@midwest.social 23 points 2 months ago (1 children)

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.

This is also why cars are loaded with electronics now. They're high margin add-ons to inflate the value of the car with little cost.

[–] winterayars@sh.itjust.works 7 points 2 months ago

Also they break and are almost impossible to fix, so basically throw the car out after the lease is done and get a new one.