this post was submitted on 23 Apr 2024
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[Dormant] Electric Vehicles
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In all technology, personal data tracking effectively subsidizes the cost of the device. They can run lower margins with a data-based revenue stream to appease shareholders. If you want privacy, you’ll have to pay more for it.
But does this option even exist?
It does in other forms of technology. It’s only a matter of time until the news shames the practice in the automotive industry enough for a manufacturer to realize that privacy has value in marketing.
I don't know if shame will necessarily do anything unless consumers talk with their money but I really hope we're given at least some options!
With enough shaming of the practice across the industry, a manufacturer will use privacy as a marketing tool. We just have to get past the phase of ignorance of the practice.
But does it really subsidize the cost at all? Seems like its more of an additional revenue stream than anything else. So many EVs with tracking are still expensive, so how are they meaningfully making the cars more affordable?
Why do you think Google can sell the Pixel at such a low price point? The hardware far outperforms other phones in its price range. The difference is that Google is very clear about its use of data collection, and automotive companies are still new to the game, selling it to anyone with a checkbook.
https://ieeexplore.ieee.org/abstract/document/9152633
https://foundation.mozilla.org/en/privacynotincluded/articles/its-official-cars-are-the-worst-product-category-we-have-ever-reviewed-for-privacy/
I can get behind tracking for subsidies. I think the underlying issue is the lack of choice. Coming from someone who uses a pixel, at least you have the option to flash whatever operating system you want onto the device. Despite there being some tracking even with Graphene OS, a consumer still has some control over how their phone works. I don't think that'll be an option for any EV that depends on software to function - especially with how hard manufacturers are locking you into their services.
You’re evading the tracking that provides the revenue offset of the slimmer margin. The more users that take that approach, the more expensive the hardware price point becomes.
I feel like this is going into different discussion but honestly, in this scenario, I don't really believe the subsidy of tracking really means anything here.
Out of curiosity, I looked up the production cost of some phones and googles pixel 6 pro, their flagship at the time, which cost google $485 to manufacture. They retailed for $899. Where is the saving from the money they're making from tracking? That's just the standard pricing range for phones of that tier. Its even cheaper for the base models. Phones are not exactly a low margin device from what I see here.
Source for what I said https://www.techwalls.com/production-costs-of-smartphones/
Funny enough, if you look at other brands, their margins are huge!
Exactly. There’s a smaller profit margin on Google hardware because they know they’ll recoup the lost margin with data-driven revenue. Apple has the highest margin and most user privacy.
As for the relative size of the margin, you have to account for a lot more than the parts and manufacturing cost that you see cited. Every model has its own payroll, R&D, market testing, marketing, packaging, and distribution to pay for with that profit.
I still don't really believe that tracking is offsetting cost all that much in these phones. Firstly, there's no data to suggest there's any saving is being done here. We can only speculate since nobody has release data on that point. But what we can look at is how google is pricing their phones relative to equivalent phones in their fields, which we can see is competitively priced but not too far from their competitors. If we ignore revenue from tracking, we still see significant margins and profit. That just goes to show that in this case any savings we can guess at from tracking doesn't need to be factored in. Googles competitive pricing can be more so attributed to its sheer size, already massive pool of software developers, ability to manufactory anywhere in the world to lower costs and ability to manufacture a limited amount of models of phones at a time to reduce cost and pool resources from its other departments. Nothing to me suggests that there is anything but other market forces at play that makes google act competitively.
Price comparisons of their phones: https://www.androidauthority.com/google-pixel-prices-1147281/