Why Doug DeMuro Thinks the Slate Truck Will Fail!

Summary

Slate, a new car company funded by Jeff Bezos and other investors, focuses on simplicity, offering vehicles with minimal features and customization options. Starting at $27,500, the car lacks standard features like paint, radios, and infotainment systems, aiming to keep costs low. Despite the innovative approach, the pricing and two-door design may not appeal to many consumers, especially compared to more feature-rich alternatives like the Ford Maverick. The vehicle's potential success may lie in fleet sales, but its appeal for individual buyers remains uncertain due to its high cost and minimalist design.

Takeaways

• 😀 Slate is a new car company funded by Jeff Bezos, the owner of the LA Dodgers, and other investors, with a focus on simplicity in vehicle design.
• 😀 The vehicles by Slate are designed to be unpainted, allowing consumers to easily wrap them in custom designs from Slate or a third-party installer.
• 😀 Slate aims to simplify the car-buying process by eliminating traditional components like radios and infotainment systems, offering a minimalist approach.
• 😀 The base Slate vehicle, priced at $27,500, offers a 150-mile range, 200 horsepower, and 0-60 acceleration in around 8 seconds. There's also an optional extended battery for up to 240 miles.
• 😀 The starting price of $27,500 is comparable to the Ford Maverick, which has a more traditional setup, including four doors and a larger number of standard features.
• 😀 The Slate vehicle is a two-door design, which contrasts with the current consumer preference for four-door models, especially in SUVs and pickups.
• 😀 Despite the two-door design, Slate targets businesses and fleet buyers who may prefer simplicity and cost-efficiency over luxury features.
• 😀 Slate vehicles have features like a backup camera, automatic emergency braking, and collision avoidance, which are federally mandated for all new cars.
• 😀 Slate's business model involves offering a standard base model with the option for flat-pack accessories like custom seats and roofs, allowing consumers to personalize their vehicles after purchase.
• 😀 The company’s goal is to deliver a simple, cost-effective vehicle, but the pricing and two-door design may limit its appeal to everyday consumers, especially with limited range and basic features.
• 😀 Slate’s success will depend not only on price and features but also on its ability to offer attractive financing options, similar to competitors like Nissan and Hyundai, as well as effective marketing and delivery strategies.

Q & A

What is Slate, and who are its main investors?

Slate is a new car company funded largely by Jeff Bezos, the owner of the LA Dodgers, and other investors. Its goal is to create vehicles that are as simple and cost-effective as possible, with a focus on customization.

What is unique about the Slate vehicle's design?

Slate vehicles are designed to be extremely simple. For example, they do not come with a paint job, which allows owners to wrap the car themselves. Additionally, common features like radios and infotainment systems are not included, focusing instead on simplicity.

What are some notable features of the Slate vehicle?

The Slate features include a rear-wheel drive configuration, a 201 horsepower engine, and a 150-mile range by default, with an option for a 240-mile extended range. It also has basic safety features like a backup camera and automatic emergency braking.

How does Slate’s pricing compare to the Ford Maverick?

The base price of the Slate is $27,500, which is very close to the price of a Ford Maverick. With tax incentives, Slate is marketed as being under $20,000, while the Maverick starts at $26,790 with destination fees.

What are the challenges Slate faces with its two-door vehicle design?

The two-door design is a significant challenge because the market for two-door vehicles, especially trucks and SUVs, has decreased. Most buyers now prefer four-door configurations, as seen in the sales data of vehicles like the Wrangler and the Ford Maverick.

How does Slate's vehicle compare in terms of range and performance?

The default Slate has a 150-mile range, which is quite low compared to other vehicles in its class. However, it can be upgraded to a 240-mile range. Its 201 horsepower engine provides a 0-60 time of about 8 seconds, which is not particularly fast.

What are the customizability options for the Slate vehicle?

Slate offers extensive customizability, including the ability to wrap the car in different colors and add accessories like seats or a roof for their SUV models. These customizations are sold separately and can be shipped directly to the consumer.

What are some of the potential issues with Slate's pricing strategy?

While Slate is marketed as affordable, the final price can rise significantly once customizations, like paint or additional features, are added. For instance, a fully equipped Slate could end up costing around $35,000, which is comparable to a well-equipped Ford Maverick or other vehicles in that price range.

What are the advantages of the Slate vehicle in terms of fleet sales?

Slate’s simplicity and customization options make it an appealing option for fleet sales. Businesses can purchase a large number of vehicles, customize them easily (including wraps), and potentially save on the cost of unnecessary features like inbuilt radios or navigation systems.

Why is the four-door configuration considered essential for Slate’s success?

The four-door configuration is considered essential because most consumers prefer it for practicality. Both trucks and SUVs have overwhelmingly switched to four-door models, and the lack of a four-door option in Slate’s vehicle might limit its appeal in the competitive market.