At Tesla, we learned the concept of the 'idiot index' which is retail price / BOM cost. The higher the index, the more the need to understand how that thing was built and what drove the cost.
These motors have a raw BOM cost of about $25. In the US, they are sold for $125-$300, by most incumbents; an idiot index of >5 in many cases.
To understand why this happens, we visited some of these incumbents' lines. Three reasons:
1. Not AI native on the ops side: Still using spreadsheets and expensive software to manage inventory, schedule production, and handle customer support. No hunger to move fast and rip out these systems.
2. Locked into expensive lines; high retail price helps with ROI: Some of these companies have bought automated, rigid lines for relatively commoditised motors (3115s). Now they face a price squeeze and can't really lower prices since they want to pay off the line. They can't move to better-margin motors because lines are fixed.
3. Manual lines, $55/hour landed labour cost: Folks who saw manufacturers struggle with 2 above are keeping lines manual and flexible, but need to deal with the high cost of labour, which is passed on to the customer.
What happens when we can get robots to automate this assembly end-to-end? Do dark factories mean product prices drop to COGS + energy?
Excited to find out.