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The gigafactory and charger network give Tesla some barrier to entry but I don't think the costs will make a giants blink. Even more scary is collusion of gian

The gigafactory and charger network give Tesla some barrier to entry but I don't think the costs will make a giants blink. Even more scary is collusion of giants trying to kill Tesla. Say the Japanese automakers group together to share the risk and costs of building the same infrastructure. My primary concern is the margin per unit. Only a handful of automakers today have been able to sustain their margins, namely Porsche which supposedly makes the most margin per car. If you wonder outside the luxury segment, you find razor thin margins and heavy competition. Tesla and Elon Musk deserves a big award for bringing the EV market to people who succeeded in capitalism. But as you saw with Ford, just because you were first won't guarantee your place. Heck, without bailouts, there would be very few American automakers left. And this is really where my argument for maintaining high margin per unit is essential for long term survival. That can only be accomplished by moving upwards, not downwards. The accumulative cost & risk of selling 2.5 model 3 vs 1 p90D can't be ignored. Having said that the market seems undecided between the bears and bulls on the upcoming Tesla earnings report.

jacquesm 10y ago
> But as you saw with Ford, just because you were first won't guarantee your place. Heck, without bailouts, there would be very few American automakers left. Very few? In fact, just one. Ford.
- brohoolio 10y ago
  While ford had the cash to survive the Great Recession without a bailout, it would have not survived the collapse of the supplier networks when GM and Chrysler went under.
  - leereeves 10y ago
    If GM and Chrysler had failed, they'd have been sold by the bankruptcy court. Someone would have bought the companies and continued making cars.
    - evgen 10y ago
      Would these purchasers have completed the purchase in time to keep the suppliers in business? If GM folds then the part supplier may feel fairly confident that someone else will purchase the assets and start ordering again, but their bank who lends them the money they need to weather the storm may be far less confident that the deal gets sorted out fast enough for the supplier to stay in business. Now multiply that by a hundred. No way the supplier network would have survived a dual bankruptcy.

jacquesm 10y ago

> But as you saw with Ford, just because you were first won't guarantee your place. Heck, without bailouts, there would be very few American automakers left. Very few? In fact, just one. Ford.

brohoolio 10y ago
While ford had the cash to survive the Great Recession without a bailout, it would have not survived the collapse of the supplier networks when GM and Chrysler went under.
- leereeves 10y ago
  If GM and Chrysler had failed, they'd have been sold by the bankruptcy court. Someone would have bought the companies and continued making cars.
  - evgen 10y ago
    Would these purchasers have completed the purchase in time to keep the suppliers in business? If GM folds then the part supplier may feel fairly confident that someone else will purchase the assets and start ordering again, but their bank who lends them the money they need to weather the storm may be far less confident that the deal gets sorted out fast enough for the supplier to stay in business. Now multiply that by a hundred. No way the supplier network would have survived a dual bankruptcy.