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

[phidauex]

I think they'll be able to claim a small premium from the EV powertrain and the cool-factor, at least for a while.

There are people out there who think EVs are cool, really want one, but haven't wanted to pay the premium/luxury prices for the high end offerings. That person probably wouldn't buy a Trax or an Elantra - they do want an EV and have been waiting for it.

They will also be cool and unique for a while which will help. Again, I could go pay cash for a Trax today if I wanted, but I have no desire for one whatsoever.

All that said, they won't be able to capitalize on it too aggressively. I don't know what the EV/cool premium is, but maybe $3-4k in the first year, retracting to $1k in future years?

 

[Yukon Cornelius]

Cool is in the eye of the beholder. Personally I think a 1939 Studebaker truck looks cool. A Dodge lil' red express truck is cool. I think the new Ford Bronco's look cool butI have sat in one, and find the seats too short with poor support, so that is not cool. Since I have not been able to do a walk-around of a Slate yet, the jury is still out on it. Looks cute in all the pics, and they are trying to market it as cool, but we shall see.
I just want something I can go to the store in, stop at the farm store or home improvement store for something that won't fit or don't want to put in my sports coupe and get it home without any drama.

 

[Sandman614]

Really?

Does this mean you think Slate Auto can raise the price based on cost and still sell the same number of Blank Slates?

I wasn't really getting in to that I was just calling out that a lot of "laws" in social sciences like economics aren't exactly set in stone. Concepts like what people are willing to pay for things like cars (a very emotional purchase) are far from an exact science.

 

[AZFox]

Concepts like what people are willing to pay for things like cars (a very emotional purchase) are far from an exact science.

If they charge more they'll sell fewer.

Emotional purchasing factors into that.

 

[Sandman614]

If they charge more they'll sell fewer.

Emotional purchasing factors into that.

So you're saying the law is price goes up sales go down?
If that's the case why has the Maverick sold more each year despite the price going up?

 

[danielt1263]

Nothing new in the article.

Not quite... She said they are having a meeting "next week" with suppliers. That implies to me that a more precise price might be coming out by next month. 🤞

 

[beatle]

So you're saying the law is price goes up sales go down?
If that's the case why has the Maverick sold more each year despite the price going up?

There were some pretty significant headwinds at the Maverick's launch due to the lingering COVID supply chain problems. Ford couldn't get batteries for the most desirable hybrid, and chips were in short supply for the higher end trims. Even the F150s were decontented at the time, and they only left the Maverick scraps.

The Ranger has also increased in price and is now $33k, so the Maverick is still the least expensive truck, even though its base price starts a lot higher now. A rising tide lifts all prices, or something?

If I don't end up getting into a Slate, I'll have a Maverick in my driveway. I'm tired of all the big trucks, though I don't think there are too many people like me.

 

[AZFox]

So you're saying the law is price goes up sales go down?

Yes, when all else is held equal fewer units will sell at a higher price than will sell at a lower price.

If that's the case why has the Maverick sold more each year despite the price going up?

Oh that's an easy one.

If they sold all the Mavericks (cleared the market for Mavericks) each year, then the new price each year has been at or below the market clearing price at the time the price was offered.

Be aware that these things fluctuate over time.

Let's say you give a neighbor a ride in your snappy new Slate Truck and (s)he decides (s)he wants one now. Boom! Demand just went up.

 

[Sandman614]

when all else is held equal

And that's exactly my original point. A ton of assumptions are made when calling it a "law".

 

[AZFox]

And that's exactly my original point. A ton of assumptions are made when calling it a "law".

Can you be more specific? If there are a ton, you must have many you can specify.

Again, does this mean you think Slate Auto can raise the price based on cost and still sell the same number of Blank Slates?

 

[Sandman614]

Can you be more specific? If there are a ton, you must have many you can specify.

Again, does this mean you think Slate Auto can raise the price based on cost and still sell the same number of Blank Slates?

Again you're taking this way beyond my original intent which was simply addressing your idea that "The economic laws of supply and demand are not a "nice theory"". When in fact they are built on assumptions such as "holding all else equal" that you were kind enough to point out. All else is not held equal in the real world. I wasn't getting in to specifics on Slates pricing model and intentions, I have no way of modeling the elasticity of demand for the Slate. And since you seem steadfast on dragging me in to that I'm going to leave this conversation with some reading material. Also maybe read up on the elasticity of demand.

https://www.investopedia.com/ask/an...s-build-assumptions-their-economic-models.asp

 

[ScooterAsheville]

One thing about the starting price to consider. Slate, if their internal calculations tell them to do so, could actually sell the vehicle for less than it costs them to produce at first. This is a classic startup strategy to establish a market presence and build share.

Don't believe me on this? I suggest you research Rivian, Tesla, Lucid and more. It is a standard strategy. I'm not making it up. It's out there for you to read. In the early days, losses on EVs ran into the tens of thousands per unit.

Slate has to surivive. It sounds crazy. But sometimes losing money for a few years is the way you survive when launching an auto startup.

 

[AZFox]

Again you're taking this way beyond my original intent which was simply addressing your idea that "The economic laws of supply and demand are not a "nice theory"".

I stand by that idea. The existence of presumed assumptions doesn't negate the laws of supply and demand

If you think "tons of assumptions" are a problem you must have some examples, right?

Instead of providing those you link to an article that says it's not rational to opt for fudge cake when you're on a diet.

Here's what I believe:

Slate Auto can't jack up the price of a Blank Slate based on cost and still sell the same number of Blank Slates, market imperfections and emotional decisions notwithstanding.​

As always, I'm open to arguments to the contrary.

 

[beatle]

Again, does this mean you think Slate Auto can raise the price based on cost and still sell the same number of Blank Slates?

I think they can to a point and/or maybe for a while. But who knows what that point is or how long that is?

Demand for something new and shiny (okay, maybe not shiny) can be fairly inelastic since it has the intrinsic value of being "first" and different. A lot of industries, including autos, know this and make "founders editions" for the people who will just pay basically whatever they ask. Or dealers just mark cars up outright when they know demand exceeds supply. This seems to almost always be the case at launch.

But eventually demand becomes more elastic as the hype fades, competition comes in, or people view the purchase as more discretionary. The product then really has to sell on its own merits, appeal to enough people, and fend off competition to succeed. Price becomes more important here, to your point, since a lot of demand is tied to price, and that will affect how many they sell.

The real trick is selling something for the most amount of money to the right person at the right time. There are actually some studies about this happening in the world in various industries, but I don't want to completely derail this thread. That said, I do think Slate's price will probably need to fluctuate a bit as Slate's COGS and the market evolves. They're not selling Costco hotdogs.

 

[Tom Sawyer]

Here's what I believe:

Slate Auto can't jack up the price of a Blank Slate based on cost and still sell the same number of Blank Slates, market imperfections and emotional decisions notwithstanding.​

I find this a better explanation of your position. It helps me better understand where you're coming from.