Vehicles are dominated by the production costs of producing anything. You save surprisingly little producing smaller vehicles because the expensive bits are all the things you don't majorly save on like the production lines, the battery, the mechanicals, the wiring, the electronics, etc. Nicer interiors, paint options, and other consumer upgrades have extremely low marginal costs. They're pure profit for the manufacturer.

It's strictly more expensive if you're limited to say, the typical NHTSA autonomous vehicle production limit of 2,500 vehicles per year.

If you go down to basic physical material costs, Surface area of car, Metal cost, Glass cost etc, are the things which will determine car price in long run, So car which is weighting let's say 25% percent less can be be built cheaper compared to car weighting more. Less doors, less glass use, less paint, less material, less battery needed for same amount of distance, which brings down to cost.

I can assure you that you don't save 25%. Yes, there are small savings, but they're dominated by the fixed costs of producing a vehicle at all.

Ok, lets think of it other way, all things equal, if you are tasked with cutting costs of vehicle without cutting back things which makes your brand unique, and without reducing margin or running on loss how will you do it? You make vehicle simpler, with less expensive parts. That's how hardware design works. Cutting back on quality or software expense is not a option for Tesla as that will make Tesla equal to any other Chinese EV brand.

Look upthread. I would reuse an existing vehicle platform because it's cheaper at any realistic volume.

yeah, share as much as possible. anything new comes with an extra cost which needs to justify itself woth returns.

Also using old and already amortized tech is another option. Dacia mastered this art in the recent past.

Raw material is less than half of the price of a vehicle, right? Assuming it’s 50%, a 25% smaller car would save 12.5%. I would be surprised if raw material is even 50% of the cost.

Just look at traditional USA automakers and why they are scaling up their vehicles. Bigger vehicles can justify bigger prices thus bigger margins. Even if the manufacturing price is not that much different.

Paint shop is the most expensive line by far. Maybe 20% higher than stamping capex.