Slate starting price isn't set yet says CEO (per Insideevs interview)

[E90400K]

Correct me if I'm wrong, but your point appears to be that the economic laws of supply and demand aren't actually laws because assumptions.

If so, the article doesn't make your point.

From the article:

The Bottom Line​

Economics is complex. It's influenced by many interconnected factors. To better analyze and predict outcomes, economists rely on assumptions in their models to isolate specific variables and test particular theories. Different branches of economics use distinct sets of assumptions to explain how individuals and businesses allocate scarce resources, giving these models structure and predictive power.​

The article says there are critics of assumptions, which is true, but it does NOT say anything anywhere near your assertion (as I understand it) that the laws of supply and demand aren't actually laws.

What makes a law a law is its predictive ability, and the laws of supply and demand are not just a "nice theory" because they have demonstrable predictive capabilities.

So when I say there's an equilibrium price that is between too low (so as to cause a shortage) and too high (so as to cause a surplus) it has meaning.

I'm asserting that Slate Auto needs to price the Blank Slate at or below the market equilibrium price because I believe a surplus would hurt the company, both in the short run and in the long run, more than a shortage would.

Man, I really think you took offense to my statement of "nice economic theory and all" as if I was trying to say the economic laws of supply and demand are not real, I wasn't. My intent with making that statement was in regards to profit. I'd bet most of us are quite familiar with the economic laws of supply and demand (which are based on economic theory), but you keep tracking back to this mystical state of "price equilibrium". Yes, it's the intersection point of a price line and supply line on a graph, but in the reality of the market it rarely exists. Better said, it moves around the graph as the market conditions change. The point moves because sales volume of product are influenced by numerous variables, which affect (dictate even) the price.

Slate will determine the price of the Truck at some point, which in simple terms will be a result of its production costs once known and the planned amortization of the engineering costs and CapX costs to bring the truck to the market, the recovery of the investment from its private equity investors, as well as Slates prediction of the market value price that will create the best attainable and supportable sales volume.

My comment of "nice economic theory and all" simply meant all that above is meaningful to the equation of what the price will be, but in the end, the price must make a profit for Slate. You said, "the Universe doesn't owe Slate profitability", of course it does. If selling to the Universe doesn't generate a profit (at some point), the endeavor will end for Slate. I've been mulling over your statement for a day now and still am trying to understand what you meant.

 

[atx_ev]

I doubt there are issues with gross profit. The problem is as the gross profit shrinks you need more and more volume to get a net profit after capital and SG&A type expenses.

ZEV credits are selling for around 3K and california will probably bring back some EV incentives.

No one knows what volume they need to sell to be sustainable for the long term. But if we are all excited, Im sure a lot of people will be excited as well.

The main area I disagree with is who are their competition.

I dont think crossovers are the competition at all, instead, it is other small trucks, even the maverick.

My ideal stable of cars for me (excluding my wife) is a small EV truck for daily driving and light duty hauling and an EREV based minivan with self driving for the family and to take road trips. But I can live with hybrid or even gas for that car.

It turns out comma.ai can work on a lot of cars so Im looking at a kia carnival (2024) which is about 25K for a used 2024, 1K for comma.ai and it has very good self driving for roadtrips.

Im thinking about trading in my tundra for a carnival while I wait for the slate. I would be without a truck for a year but I can live with that.

The total cost would be 50K for both which is cheaper than a lot of new cars.

 

[AZFox]

If selling to the Universe doesn't generate a profit (at some point), the endeavor will end for Slate. I've been mulling over your statement for a day now and still am trying to understand what you meant.

I was gonna blow off this thread until I read this. Thanks a lot, mister. Now I need to spend another chunk of time to explain things more clearly.

I'll start with this:

"The Universe doesn't owe Slate Auto a profit" mans they need to earn profit by creating and selling products with value and managing the costs required to produce those products.

Sounds dismal, huh.

 

[AZFox]

I'd bet most of us are quite familiar with the economic laws of supply and demand (which are based on economic theory), but you keep tracking back to this mystical state of "price equilibrium".

Market-clearing price seem mystical, but it's really a thing.

Can we agree on this?
In order to realize the cash-flow from a Blank Slate someone needs to actually buy the Blank Slate.

How about this?
There are prices Slate Auto could offer that are sufficiently high that they will not sell all 150,000 Blank Slates.

And this?
There are also prices Slate Auto could offer that are sufficiently low that they will sell all 150,000 Blank Slates.

Those are both ranges. We can be pretty sure that $40,000 is in the first category and $15,000 is in the second category. Are you with me so far?

There's a Goldilocks Price right between those two ranges. It's juuuust low enough to sell all 150K units. That's the market clearing price.

Higher than that, someone doesn't buy an available truck (surplus).

Lower than that, someone wants a truck but they're all sold (shortage).

I understand there are confounding factors like time and externalities and whatnot. Those make the Goldilocks Price hard to predict.

Hard to Predict ≠ Doesn't Exist

 

[AZFox]

Slate will determine the price of the Truck at some point, which in simple terms will be a result of its production costs once known and the planned amortization of the engineering costs and CapX costs to bring the truck to the market, the recovery of the investment from its private equity investors

The Goldilocks Price is determined on the demand side (by buyers) not the supply side (by suppliers).

Buyers don't give a hoot about amortized engineering costs or whether you return investment to your private equity investors.

The just want a truck.

 

[AZFox]

I'll say it one last time (for now, probably):

The perfect, optimal price for a Blank Slate will be determined by demand, costs notwithstanding, and whether they realize it or not.​

I think economics is called The Dismal Science because of situations like this. Sure it would be nice if "passing savings on to the customer" was a good strategy, but in reality that's not how things work... unless the price before you "passed savings along" was already below the Goldilocks Price and you want to leave money on the table, I suppose.

 

[E90400K]

I was gonna blow off this thread until I read this. Thanks a lot, mister. Now I need to spend another chunk of time to explain things more clearly.

I'll start with this:

"The Universe doesn't owe Slate Auto a profit" mans they need to earn profit by creating and selling products with value and managing the costs required to produce those products.

Sounds dismal, huh.

Duh, how else would the Universe provide profit to Slate unless Slate earns it? No buyer in the Universe says, "Oh the price is $25,300, I'll pay you $27,000 for it.

 

[Garbone]

The bottom line is this is supposed to be a very cheap, basic vehicle. The competition is not other electric vehicles but all other vehicles in it's price class. This is who they have to price against:
Cheapest New Cars (Cars.com)
1. 2026 Hyundai Venue SE: $22,150
2. 2026 Chevrolet Trax LS: $23,495
3. 2026 Kia K4 LX: $23,535
4. 2026 Nissan Sentra S: $23,845
5. 2026 Hyundai Elantra SE: $23,870
6. 2026 Toyota Corolla LE: $24,120
7. 2026 Volkswagen Jetta S: $25,270
8. 2026 Mazda3 2.5 S: $25,785
9. 2026 Honda Civic LX: $25,890
10. 2026 Buick Envista Preferred: $26,495

If they cannot wedge themselves in this list, I don't think they are going to succeed. This is especially true since the Slate is so feature poor in baseline trim. One of the big selling features of all electric vehicles is powertrain simplicity and minimal maintenance cost. That is something they need to capitalize on for sales.

Better list.
Top 5 Cheapest Trucks Overall
These are primarily compact and mid-size models with entry-level trims:

• Ford Maverick (XL Trim): ~$28,145. A compact, unibody truck available with a fuel-efficient hybrid or gas powertrain.
• Hyundai Santa Cruz (SE Trim): ~$31,100. A "sport adventure vehicle" that blends SUV comfort with a truck bed.
• Toyota Tacoma (SR Trim): ~$33,740. A recently redesigned mid-size truck known for high resale value.
• Nissan Frontier (S Trim): ~$33,845. A traditional body-on-frame mid-size truck with a standard V6 engine.

If they can not come in below the Maverick the may be in trouble.