In my last post #45678 I neglected to give the most obvious and stellar example of market segmentation within a specific vehicle model. Since the discussion began with the upcoming smaller car I stayed with cheap sedans vs 'pocket rockets'.
THE preeminent example, in North America, that is, is the Ford F150 and its imitators. Base price US$33835 Limited with all available options (except engines): US $89,050.
In this example the base version does sell, not to consumers, but to fleets and light-duty utility buyers. That does cover all production costs and serves to absorb considerable fixed costs too. As with then 'pocket rockets' the margins from the higher specification variants provide the profitability. As we also probably all know, those margins are so high that Ford, in particular, makes more than 100% of their profits on the F150 and its derivatives, Lincoln Navigator, Ford Expedition and Super Duty all of which share the same platform.
Tesla shares much electrical and drivetrain componetry, plus operating system, but the pure physical 'platform' as used by all other OEMs is not used by Tesla. Further, Tesla obtains scale economies by adopting integrated engineering and factory operating systems and sharing parts where functional differentiation is not relevant, such as cell production and BMS. As we see in all Tesla innovation, the next model to be built incorporates new technology as relevant that is retrofitted to other models as efficiently as is practical.
That Tesla approach, because it incorporates continuous innovation, is far more demanding of highly flexible automation than are other OEMs capabilities. That also enables fleet enhancement and the ability to addd features to existing vehicles, something not yet mastered by nearly all other OEM's Geely, among few others, actually now does OTA upgrades that are closely analogous to Tesla's.
The moral of the light truck (mostly SUV and pickup) business practice is that the features that appeal to purely utilitarian buyers provides a profitable base upon to build high-end consumer vehicles. Those high end models provide vastly more profitable models that are enabled solely because at their core they are quite cheap to make. Since Model S Tesla has been rapidly evolving to broaden its own approaches which have been stellar in execution.
As we see in all the other Tesla models the margins come from very attractive but much less expensive innovations. Intelligent and knowledgeable buyers still buy those optional features, knowing the reality.
Now we are sometimes struggling to understand these points. Why? Because these points are rarely, very rarely, openly discussed by OEM representatives. After all, does a Cadillac Escalade buyer at US$120,325 MSRP really want to know that the almost identical Chevy Suburban can be had for US$59200 MSCP, itself basically a Silverado US$36800 MSRP base? That practice is ubiquitous and not secret, but not shouted out in advertising either.
The other OEM's abilities stop at production, they cannot change anything after production because their business models are built on Tier One technology, not their own.
All of these characteristics are suddenly becoming more relevant than they ever were because Tesla has learned how to integrate variety in optional goods and services. Beginning with Cybertruck, Tesla optional equipment suddenly becomes a major issue, one we've pretty much ignored.
For the ancients among us, we're now seeing the likes of AMG, M, and their kind suddenly arrive in the 21st century. For even older ones it's like the spirit of the Prince Skyline suddenly arriving seven decades later.
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