fender squire parts

What the difference between a Fender guitar and it’s Squire counterpart?
I mean, I know it’s made out of different wood, has different electronics, and is made in a different part of the world. But I mean really, in terms of production cost, how can it be THAT different? For example, I can buy a Squire Telecaster for like $180. A Fender one would cost me well over a thousand, for the cheapest one. Some are several thousand dollars. I bet it only costs them a little bit more to make the Fender model but they charge you significantly more. Why? Is it just because they can?
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Late 80s Fender Squier Telecaster