Is that true? Tesla’s production has fallen, and it’s got unused capacity in Austin at Berlin. It’s no longer supply-constrained. If it could get unit growth just by lowering prices of existing models, it could do that. They haven’t chosen to.
They don’t have a $30K car. Even if they could lower the price of the Model 3 to $30K and turn a profit, they probably wouldn’t do that, because of how markets and pricing work. Since you can’t just sell some of the Model 3’s at $30K and charge $38K for the rest of them, the only way to get the $30K customers is to lower the prices for everyone. Automakers have historically and universally solved that problem by offering different models at different price points, so they can pick up consumers at price points that are too far away from each other to reach with just trim modifications.
Is that statement true? Is there any evidence that BYD loses money on their BEV sales?
After all, they’ve reached the point where more than half of their sales are BEV’s (1.6 million vs. 1.4 million PHEV’s). They’d have to have an absurdly high profit margin on those PHEV’s for them to not be earning money on their BEV’s - they earned a little under $6B in profit last year, which would be more than $4K profit per vehicle if it were just spread among PHEV’s. Even more if BEV’s lost money. Given their low ASP, they’d have an unthinkable profit margin in PHEV’s if they only made money on a minority of their vehicles.
It was. All of the high volume producers provide a wide variety of models. Sometimes they introduce entire new marks so that they can provide even more models without brand confusion (Lexus for Toyota, Acura for Honda). There are plenty of automakers with a small number of models, but they have relatively low volumes. They have model diversity so that they have an offering for nearly all consumers, and consumers want different things - most of which are unrelated to drivetrain or engines. Consumers want city cars, subcompacts, compacts, small sedans, midsize sedans, large sedans, coupes, hot hatches, compact SUV’s, crossover SUV’s, small SUV’s, midsize SUV’s, large SUV’s, convertibles and rag tops, small pickups, medium pickups, large pickups. For many of those segments, some consumers want luxury versions, some want bare-bones versions, and some want an intermediate versions. Within every segment, consumers have different preferences for styling - and sometimes different consumers in different countries want different appointments or features.
Large automakers respond to this by offering lots of models. Sometimes within the same market - Toyota motor company offers six different sedans in the U.S. (Camry, Corolla, Prius and the Lexus IS, ES, and LS). Sometimes in different markets (in Europe, Toyota also offers the Yaris and Aygo, which are too small to appeal to U.S. customers).
Tesla hasn’t had to do this. Until recently, there were so few compelling offerings that people that might prefer a BEV sedan that was smaller/cheaper than a Model 3 (or that was bigger than a Model 3 but cheaper than a Model S) might just bite the bullet and trade off that preference for what was available. But once there’s a plethora of choices out there, they don’t have to make that trade-off - they can find a car that’s a better match to the size and price point they’re looking for. There’s only so much of the market that wants exactly the size and configuration of a Model 3 or a Model Y.
So someone in Europe who wants/needs a small car - an A- or B-segment along the lines of an Aygo or a Yaris - isn’t likely to buy a D-segment sedan like the Model 3. But if BYD comes along with the Seagull…well, then they’ve got that customer and Tesla doesn’t.
