I paid over $90,000 for my iPace. I doubt Jaguar lost money on the deal.
Hard to be sure, since companies rarely give separate revenue/income figures for their different models. Jaguar/Land Rover did have negative cash flow in 2022, though their gross income was positive. Also, the I-Pace is actually produced by Magna Steyr. It’s unknown if they make/lose money on the I-Pace, too.
That the cars cost $90k doesn’t necessarily tell you much. Rivian had $1782M in revenue in the first half of 2023, and $2729M in costs. They produced 23,387 vehicles, so their average car sold for $78k but cost $117k to build. It’s entirely possible to lose money on a 6-figure car…
Companies like Rivian and the legacy auto manufacturers have to spend a lot of money in designing and producing electric vehicles, so if you allocate those costs to the first few years of production run, of course they’re losing money on every car sold. How much did Tesla spend to design its cars, batteries and charging stations and for the associated manufacturing costs?
Yeah, no doubt about that. Tesla lost a lot of money in the early years. What other automakers are finding out, though, is that making a cost-effective EV takes more than slapping a battery and motor in an existing model. Rivian didn’t exist 10 years ago, but Ford did, and they could have started their EV investments a bit earlier.
This is starting to get far afield of the OP, but there is an area of intersection. I think the problem with unions is less about the dollar costs and more about the structural ones. They’re even more resistant to change than the corporations themselves, and they already have a lot of inertia.
EVs are simply built differently than ICE vehicles, and that implies a different division of labor. But the union power structure is built on the existing boundaries, which aren’t necessarily well-suited for EVs. You can’t just dump everyone in the ICE engine division into the electric motor division and hope it works out. It’s going to involve closing some factories and opening others. Unions don’t like that. It’s going to be very difficult for Ford, etc. to make the restructuring moves they need to survive the EV transition.
Unions understand this to some extent (they’re asking for EV training and other things), but I don’t think they’re going to willingly go along with all the needed changes.
Not only is it necessary to close some factories and open others, but some people will either need to acquire new skills or be replaced with newly trained people. For example, they’re no longer going to need people who know how to design and build an engine oil system.
It’s not clear the legacy automakers can compete with Tesla. Tesla built its factories from the ground up to minimize human labor as much as possoible. They pioneered huge stamped one piece subassemblies that replace hundreds of parts. Tesla is vertically integrated, makes its own batteries, etc.
Look at what’s happened to traditional space trying to compete with SpaceX, or what happened to the big mainframe and minicomputer manufacturers when they tried to get into the PC business. Only IBM was really successful for a time, and they did it by spinning off a new business just for PCs.
Corporations (and governments) over time fill up with dea weight, with the results of empire building over the decades, inefficient departments that are impossible to kill, and in the case of the legacy automakers, huge pension liabilities that need too be funded by car sales to the tune of several thousand dollars per car.
Not just the stampings, but other types of assemblies as well. Check out how this guy is able to put together pre-made assemblies in just a few seconds:
It’s not just that they have modular assemblies–traditional automakers have those as well, obviously. But they’ve optimized the components to their exact needs, and reduced the connections and fasteners to the absolute minimum.
That level of optimization requires letting the product dictate the corporate divisions, and not the other way around. Change is hard enough for a company that has become calcified over many decades. Combine that with a union that is likely to lose influence in any restructuring, and it’s unlikely that they can make significant changes.