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  • Writer's pictureDoug Howarth

Two Trillion Dollars; One Hard Edge

If you inquire what the people are like here, I must answer, “The same as everywhere!” Wolfgang Goethe How did $2T in the 2018 new car market worldwide behave? When it comes to market limits, it was in much the same way. Figure A studies all 36 electric car models in 2018 for which there were sales quantities and prices, depicted by green dots. Added to them are 43 like figures for selected gasoline-powered models in the same year, shown by blue points. Note that while several models of each type do not sell well, those that make the most sales form a wall extending from the upper left to the lower right. The line described by the overlaid small red points is the 2018 Car Demand Frontier. Of all the similar curves we’ve studied, this one is the sharpest, with a minuscule Mean Absolute Percentage Error of 6.0%. We see the differences between each sub-market in Figure B, where the prices paid for horsepower change between types and as sales grow. Taking only 43 of the 100s of models of gas-powered cars, trucks, and SUVs offered represents a short cut. But, if we take the most popular (Toyota Corrolla) and expensive of them (Bugatti Chiron), it’s likely viable. #innovation #market #future #economy #startups #management
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