Thatís a question that I've been hearing a lot lately and Iím not sure how Tesla is going to pull it off. The Model S' competitors are high end luxury cars which normally sell for $70k+ but Tesla says they can produce and sell the Model S for $13k less and still be profitable.
Iím not sure if this has been discussed here but where exactly is Tesla cutting costs in order to be able to produce a luxury vehicle for much less than the competition? I find this pretty difficult especially considering that they are a small start up with less access to the supply chains that the larger automakers have and they have much less resources than the large automakers.
The only explanations that I have been able to come up with are that:
1. They donít have a lot of the overhead that the large automakers have. ie; Union Pensions, healthcare...etc.
2. Tesla is small company so they're able to be more efficient than a lumbering giant like GM or Nissan.
3. They're only focusing on one vehicle so they're able to cut costs in that respect too.
4. They own their own dealerships so theyíre making more money off of each vehicle by cutting out the middle man.
Are there any cost advantages to making a EV as opposed to an ICE vehicle? Does an electric engine costs less to produce than an ICE?
Just trying to understand how they're able to produce a vehicle for such a low price and still make a profit when their competition is charging significantly more.