Sure, but what is crazy about this situation is that people *want* to buy the blessed thing, the reviews are all very good and the engineering faultless (apparently) and here is this chap Sergio Marchionne saying basically that he can't be bothered to work out a way to make money selling the 500e because its hurting his sales of ICEVs! It really does sum up everything that has gone wrong with the auto industry in the last 20 years. How the team who put the car together must feel about his comments I dread to think - probably all looking for a job a Tesla. What a complete idiot. MW
On 25 May 2014, at 04:28, Michael Ross via EV wrote: > My point is, and I am able to evaluate this having had a fairly close > vantage point, no car can be made profitable without sufficient volume. > And it is very easy to make a car that has almost no profit associated > with it - ask GM. > > This is a compliance car - that means it is not going to carry its weight. > You can call that stuff sunk cost, but it has its encumbrance on profits; > the accounting facts are time shifted is all, it is foolish to discount > them. > > If you want to look at past R&D as sunk cost fine - then the 500e has to > carry the current R&D for the next models in the pipeline. I doubt that it > will, if they don't make the effort to crank up the volume. I ask you then > - where does the money for current R&D come from. > > I have no interest in enticing you to defend what was probably a throwaway > comment. Sorry, I brought up an contrary view. > > > > > On Sat, May 24, 2014 at 10:35 PM, Ben Apollonio via EV > <ev@lists.evdl.org>wrote: > >> I think you're missing my point. I understand it's not free. But if you >> were to apply Fiat's accounting to other situations, nobody should ever >> launch a new product or start a company because it's guaranteed to "sell at >> a loss" for the first few months/years after it hits production, regardless >> of how good the margins are otherwise. Now, you may say Fiat will never >> sell enough 500e's to recoup their investment, which may very well be true, >> but grousing by the CEO about how he hopes people won't buy the car isn't >> going to help. >> >> Said another way: once you've already sunk the R&D cost, you don't factor >> that past expense it into whether or not it's profitable to continue making >> and selling the product you've already designed/tooled/etc. >> >> -Ben >> >> On May 24, 2014, at 6:35 PM, Michael Ross <michael.e.r...@gmail.com> >> wrote: >> >>> So where does the money for NRE and R&D come from? >>> _______________________________________________ UNSUBSCRIBE: http://www.evdl.org/help/index.html#usub http://lists.evdl.org/listinfo.cgi/ev-evdl.org For EV drag racing discussion, please use NEDRA (http://groups.yahoo.com/group/NEDRA)
