The Infantry Squad Vehicle shares 90% of its components with a Chevy Colorado. The top Trim Colorado costs $30K usd or so, but the the ISV costs $330k. What makes up the 10% difference between the Colorado and the ISV?

944 views

Not trying to hate. Maybe it’s armour, maybe it’s guns, but that is a big difference.

In: Economics

9 Answers

Anonymous 0 Comments

Something that has been left out of every comment that I’ve seen is the simple fact that this **is a military contracted vehicle.** So what does that mean?

**Well first, as has been mentioned, this vehicle probably has significant improvements over the retail version**. Superficially we would think of armor and weapons but there’s probably a fair deal more that is adjusted or added on to make the vehicle operate in a warzone (someone mentioned the transport capability as an area where additions or adjustments might significantly improve performance).

**The second biggest factor is it’s military nature as something that needs to be designed and built.** People will sight over-bloated military budgets (which is a whole separate issue), but every tool the military uses needs to be designed and built in America (or your country of origin typically). Governments aren’t super keen on trusting other governments to design their weapons and technology, at least not in the West. Even with initiatives like the Defense Technology Security Administration which oversees defense sharing with allies, the cards are still kept quite close to the chest.

So what’s the implication for military contracts and tech? Well, they’re going to be insanely expensive. **Unlike Apple, Nike, or every other major company, the DoD can’t just pay poor people $0.67 an hour to make M16s and Predator Drones.** Instead domestic workers need to be paid well not only because of US Labor Laws, but to shield them from poverty (which is one of the easiest doorways for foreign agents to utilize blackmail against security-cleared workers).

There’s a lot at play with military contracts. Just look into Naval ship decommissioning to learn about how complicated this stuff can get, and the reasons therefore. I hope you found this helpful!

Anonymous 0 Comments

They’re only planning to make a few hundred, so instead of a highly automated production line, the modifications likely require a lot of manual labor.

The cost also includes all the R&D work to make the prototypes, which adds a lot per unit when they’re not making very many.

Anonymous 0 Comments

Aside from the extreme government contract bloat; the ISV carries 10 people, can be lifted from any angle at almost any point by helicopter, can be airdropped, and can cover terrain that a commercial truck couldn’t dream of.

Because we don’t have the specs, we can’t individually price out each of the major reinforcement upgrades, but the total price will probably be somewhere around $60-70k. The rest will be extreme government contract bloat.

Remember, government dollars don’t equal real person dollars. Remember that the Federal government spent over $100 million to build a state of the art airport and harbor in Akutan, a town with 750 residents, no roads that connect to it, and neglected to give either the airport or harbor working electricity or running water.

Anonymous 0 Comments

It’s not only the cost of the components. There is a lot of fine print put into a military contract. For instance, it says you have to maintain enough spare parts to repair X number of vehicles for 10, 20, 30 years into the future, no matter what their damage may be.
You also have to pay for expensive testing to make sure that the vehicle can survive wartime conditions, everything from deserts to swamps. You have to make dozens or hundreds that can be shot up with every type of bullet and tank round imaginable to find out whether the occupants would survive. And on and on.

Plus, these fixed startup costs remain in place regardless of whether the military buys one or a hundred or a thousand or 50,000. If you sign a contract with the government for 100,000 at 100K each, and then a year or two down the line, they change their mind and decide the Army only needs 30,000 instead of 100,000 vehicles, then the cost per unit just spiked from 100K to 330K. So there’s a lot more to it than meets the eye.

Anonymous 0 Comments

A lot of it is the armor and the guns, but also the radios, navigation aids, first aid equipment, armored windows, heavier suspension, the wheels, tires etc.

The other huge price hog that a lot of people don’t realize at first glance is the certifications — the military doesn’t just buy commercial and throw it into the battlefield. Vehicles and equipment has to be rigorously tested under a variety of conditions to ensure that they will perform as expected. People’s lives are on the line, and that necessitates a bare minimum of performance. And performance is expensive. So all the above gear has to meet stringent guidelines as well, which jacks up the cost.

Anonymous 0 Comments

Milspec components. Armor. Protection. Also the total cost includes a pre-ordered component of spares (not in each truck, delivered to the government).

You can’t pull into a Chevy dealer when something quits in a war zone. There really is a difference between how things are build for the Armed Forces and for civilian purchases.

Anonymous 0 Comments

Well first of all 90% of component is a very vague statement. What component mean exactly. Do they count each screws as one component and the whole military grade/air drop capable chassis as one component? In that case the screw cost a couple of cents, but the chassis is for sure super expensive. The 90% seem like a marketing tool and nothing else. You can’t extrapolate out of it, because it can anything.

Second, the 330 thousand $ isn’t the price per vehicle, it’s the price of contract divided by the number of vehicle. Military contract doesn’t include just the vehicle. First of all there is basic cost like R&D. The civilian version could spread those cost over the 1.5 millions they sold over the last 16 years. The military version have to recover those cost in 649 vehicle, maybe more depending on future contract, but they can’t be sure. There is also support for the entire life cycle of those vehicle which could last decades. All the spare parts that the army need to keep their fleet in working condition for their life cycles, etc.

Anonymous 0 Comments

$30k, $330k, 10%? check your math.

Anonymous 0 Comments

A Chevy Tahoe probably could cost $330k if not for automated assembly lines. A small run of milspec hardware, largely done by hand, loses the economy of scale we’re accustomed to.