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. . . that’s the same reason the very first:
. . . . . . cell phones, and
. . . . . . computers, started out really expensive.
Except in those cases,
. . . they were the first of their kind,
. . . so the product could be super expensive, and still sell.
But, because perfectly good, affordable gas cars already exist,
. . . it wouldn’t work to come out with the equivalent quality of a
. . . $25,000 gas car for $100,000+.
So this became the business plan:
. . . Step 1: High-priced, low-volume car for the super rich.
. . . . . . Come out with the expensive first product,
. . . . . . but make the car so fancy that it’s worth that price.
. . . . . . i.e. just make it a legit Ferrari competitor and then it’s okay to charge over $100,000 for it.
. . . Step 2: Mid-priced, mid-volume car for the pretty rich.
. . . . . . Use the profits from Step 1 to develop the Step 2 car.
. . . . . . It would still be expensive, but more like a $75,000 Mercedes or BMW competitor,
. . . . . . instead of Ferrari.
. . . Step 3: Low-priced, high-volume car for the masses.
. . . . . . Use the profits from Step 2 to develop a $35,000-ish car,
. . . . . . that, after the government’s $7,500 EV tax credit, and the savings on gas,
. . . . . . would be affordable to the middle class.
It’s kind of a Hershey’s Kiss business plan.
5-3-2017 Source: #Tesla Business Plan
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