And So We Drive
Car And Driver (and others) reported this week that the new Bollinger B1 and B2 are to debut at $125,000, a higher price than previously announced or expected.
Two thoughts here:
(1) Given the company’s own statements and the fate of similar EV upstarts such as Dyson, it shouldn’t be at all surprising that a new, low-volume vehicle is expensive to manufacture. Honestly, it would have surprised me more if costs had come in on the lower end.
"Our trucks will have a larger battery pack than anything on the road today," he said. "Each truck has two motors, two transaxle gearboxes, and four gear-hub gearboxes. It'll be low-volume, and made from mostly U.S.-made materials. All of that together creates a powerful truck with unmatched capabilities, and it's expensive to make."
Bollinger also said the price was set high because the company isn't following the practices other automakers have adopted for making money.
"Rather than follow the common business model of borrowing money for years and years in order to cover the high cost of producing electric vehicles, we're pricing our vehicles to cover their material and production costs," he said. "As for covering all of the R&D and startup costs that have gone into it, we hope to turn a profit in the first few years. We have been honest and transparent during our entire journey, and this price reflects that."
(2) Wisely though, the company has targeted a specific, price-insensitive niche, for whom the high price is likely not to be a deal-breaker:
The target buyers for the B1 and B2 are the same off-road enthusiasts who are buying capable vehicles that are on the market today and then adding "$50,000 to $60,000 in aftermarket modifications," Bollinger said, so that they have the same performance as a Bollinger EV will have out of the gate.
At a time in which investors are pretending that coworking spaces are worth $40 billion, it’s nice to see a startup choose the novel business model of business model making a product and selling it at a profit. I hope it works out.Permalink