Slate makes the cover of Car & Driver magazine!

[danielt1263]

In one of the video interviews Chris Barman explicitly said [selling the truck as a loss leader is] not the plan.

Of course a 5% profit margin, at first, is technically cash flow positive...

 

[AZFox]

Of course a 5% profit margin, at first, is technically cash flow positive...

She said something to the effect of they're happy either way, whether you accessorize or not.

She said nothing about 5% or any other percentage.

 

[Mac-Tyson]

I find the following excerpt from the article rather interesting:

Given Slate’s direct-sales model, the automaker could be looking at profit margins of 50 to 70 percent on the Truck’s many accessory items.

If this comes to pass I would expect Slate to keep the base truck purposefully below $25k to initially attract more customers. Slate admittedly stated that they won’t be profitable until the second year of production, when the revenue from the accessories market begins. They need to cast the widest possible net at product launch.

In one of the video interviews Chris Barman explicitly said that's not the plan.

Edit: It was something to the effect of: the truck itself will be cash-flow positive. Whether you buy accessories for it or not they're happy either way.

Which makes sense the accessories revenue is an incentive to make sure the Truck is reliable for a long time. So they can make money on accessory sales even from 2nd or 3rd owners of the truck. But there's going to be a good amount who buy just a blank slate and you can't be losing money on each truck that way.

 

[E90400K]

Analysis
Margin Calls
“The real challenge,” says Tyson Jominy, senior vice president of data and analytics at J.D. Power, “is that EVs typically have a worse margin up front” than internal-combustion vehicles.

Jominy puts a typical EV’s margins at 10 to 15 percent. Slate’s is likely even lower, given the cancellation of the $7500 federal tax credit toward the purchase of a new EV. Slate originally factored that direct-to-buyer cash into the base price of the Truck, a sum that would have pushed the purchase total below $20,000.

This makes no sense. Slate's margin on each truck was never dependent upon the Fed EV tax credit program. The $7,500 cash was directly between the Taxpayer and the Slate EV buyer. Slate Motors would not have received any part of the tax rebate.

 

[Trace26]

In one of the video interviews Chris Barman explicitly said that's not the plan.

Edit: It was something to the effect of: the truck itself will be cash-flow positive. Whether you buy accessories for it or not they're happy either way.

$5 above cost would be cash flow positive 🤷 I think the point they're making is they won't be losing money on each truck like a lot of other startups. Any amount above cost is a win.

 

[Trace26]

If all the weights turn out to be correct (curb, extended battery, payload) then it looks like I'll be getting the standard battery. Was hoping it would be sub 4000lbs with extended battery. Also the payload is a bit too low for me with it added.

 

[sodamo]

She said something to the effect of they're happy either way, whether you accessorize or not.

She said nothing about 5% or any other percentage.

I think there may be a good chance a 2nd/3rd owner would accessorize.

 

[Luxrage]

I think there may be a good chance a 2nd/3rd owner would accessorize.

One thing that's kind of neat is down the line if someone wants to pick up a used one, it doesn't hurt too badly if it's not the specific configuration they wanted. They can just order whatever is missing separately. As someone who has been in that boat, hunting for a specific trim level with specific options in a used car, it's nice when you can just order everything and plug it in after-the-fact from the OEM.

 

[E90400K]

$5 above cost would be cash flow positive 🤷 I think the point they're making is they won't be losing money on each truck like a lot of other startups. Any amount above cost is a win.

As long as the company remains private.

 

[E90400K]

One thing that's kind of neat is down the line if someone wants to pick up a used one, it doesn't hurt too badly if it's not the specific configuration they wanted. They can just order whatever is missing separately. As someone who has been in that boat, hunting for a specific trim level with specific options in a used car, it's nice when you can just order everything and plug it in after-the-fact from the OEM.

Your's is a good point, but I started thinking about this scenario. If the 2nd or 3rd tier buyer is 7 to 10 years out, is slate still going to be producing SUV kits or wrap kits, etc. for a 2027 Slate Truck in 2037? Especially when they've made a model changeover.

 

[sodamo]

Your's is a good point, but I started thinking about this scenario. If the 2nd or 3rd tier buyer is 7 to 10 years out, is slate still going to be producing SUV kits or wrap kits, etc. for a 2027 Slate Truck in 2037? Especially when they've made a model changeover.

Good point and bound to happen, but with their philosophy I would expect an attempt to make some new stuff back compatible.

 

[AZFox]

Your's is a good point, but I started thinking about this scenario. If the 2nd or 3rd tier buyer is 7 to 10 years out, is slate still going to be producing SUV kits or wrap kits, etc. for a 2027 Slate Truck in 2037? Especially when they've made a model changeover.

If the article's opinions about profit margins are correct, probably so.

Given Slate’s direct-sales model, the automaker could be looking at profit margins of 50 to 70 percent on the Truck’s many accessory items.

A third party could sell wrap kits if they're just wrap cut to a certain pattern.