I dunno. I think you have to build a lot of units before the NRE cost increase beats the BOM cost decrease. Anyone that knows Python can write software that runs on a Raspberry Pi. Getting someone who knows embedded systems is going to cost you a lot more than that. Let's say you pay your Python engineer $200k a year and your embedded systems expert $350k a year. By hiring the Python engineer instead of the embedded systems engineer, you now have $150k to spend on parts. A Raspberry Pi 4 is $35, and a RP2040 (probably waaaaaay more compute power than these things need) is $1. So you save $34 per scooter, maximum. $150k/$34 = 4411 scooters before you break even by optimizing BOM costs. Do they have that many V1 scooters? Probably not.

Another angle is paying contractors. I doubt that you need a person-year to make an electric scooter, so that pushes the break-even point down a few units. But, your Python engineer can also make the backend when you're done with the hardware. It really depends on how expensive your recuriting/hiring/onboarding pipeline is. I am sure many people you run into will say that they know how to design e-scooter control systems, but you have to find the ones who are not lying. That's a cost.

So all in all, it seems like they spent their investors money wisely. You do the cost reduction when you want to expand, not for the "yeah, this business can't work" test phase. It seems like that's what they did; the business doesn't work in Seattle at any scooter BOM cost, so it's not a business.

The dumb part is not paying someone to round up the scooters and eBay the electronics and batteries, though. They could easily make a lot of their money back, probably even selling the used Pis for more than they paid!