Increase volume when you lose money on every unit?
This isn't software... especially when you better accrue a giant pot of warranty money for the inevitable battery and system recalls over the early infant years.
I agree with your initial premise about actually introducing low-cost versions, but these must be subsidized by the high margin versions just like airline flights. Business travel pays for the infrastructure used by the masses.
The whole model depends on high-margin cash flow carrying the business forward into the high-volume, low-margin production. If there isn't any cash leftover, the whole thing crashes into the terminal at the end of the runway in a fireball.
> Increase volume when you lose money on every unit?
The only way to eventually make money is to streamline production, which means leveraging economies of scale. Trying to cut back on production to avoid losses is a losing proposition in the long run. Short sighted businesses are rarely successful.
Increase volume when you lose money on every unit?
This isn't software... especially when you better accrue a giant pot of warranty money for the inevitable battery and system recalls over the early infant years.
I agree with your initial premise about actually introducing low-cost versions, but these must be subsidized by the high margin versions just like airline flights. Business travel pays for the infrastructure used by the masses.
The whole model depends on high-margin cash flow carrying the business forward into the high-volume, low-margin production. If there isn't any cash leftover, the whole thing crashes into the terminal at the end of the runway in a fireball.