Reply #70: And they've been making batteries for HOW long? [View All]

The products you named have three similarities:

1) they have very high R&D costs
2) they require all-new factories
3) and they don't contain large quantities of raw materials.

Once you've paid down the R&D and the factory, to maintain the exact same profit margin on the item as you had when the bills were still coming in you NEED to drop prices unless you're doing something with all of the excess money, like investing it in developing the thing that's going to replace the thing you make now. (Which explains why a PlayStation 2 isn't $99.95 right now--they've spent all the excess money on designing the PlayStation 3. But by spending only some of the money on R&D and the rest on lowering prices, the price-cutting effect in high-tech you see now takes place.)

Now go pick up a big battery. Hefty little bugger, ain't it? I've got a 14.4v hammer drill, and the battery weighs more than the drill. And the battery in a hybrid car weighs more than the battery for a drill. Big batteries contain huge amounts of metals, and metals don't get cheaper because people are using more of them. In fact, they seem to get more expensive. There is a finite supply.

I don't think hybrid cars are going to be $5000 any time soon because (1) the expensive part of the hybrid package--the motors, generators and batteries--rely on technology that's costed down about as far as it's gonna go, and (2) the rest of the thing is still a car--and cars get more expensive, not less. Yes, the super high tech part of the hybrid car will go down. No, the super high tech part of the hybrid car is not the expensive part.