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Prediction: In ten years it's going to be very funny to look back at Tesla as the supposed bankruptcy risk and not Toyota. We've heard variants on the parent-c

Prediction: In ten years it's going to be very funny to look back at Tesla as the supposed bankruptcy risk and not Toyota. We've heard variants on the parent-comments line of thinking ever since the Model S came out in 2012. Yet, fast forward to 2019, and the gap between Tesla and traditional automakers has only widened (to name a few axes: EV sales, EV margins, rate of software improvements/OTA updates, Supercharger network, battery production). This is what should terrify big automakers: it's not that Tesla's gap is per se insurmountable; it's that the pace at which Tesla is improving and innovating is far greater than the pace at which any other automaker is doing it. Most comparative analyses between Tesla and other auto companies suffer from a fallacy that relates to this: they compare the Tesla of today to the ___ of tomorrow. Perhaps some day a traditional auto manufacturer will offer an all-electric, self-driving car. But how long is it going to take them to get there? Not to announce something, or to design a concept car, but to actually build them and sell them at scale and with positive margins? And what will Tesla offer by the time they do? My wager is that by the time Toyota offers a compelling all-electric car (by today's standards), the feature gap between a $x Tesla and a $x Toyota will be so great that the Toyota will no longer be compelling to the market. Throw in lower margins as companies build their first EVs, the baggage of dealerships, a likely recession some time in the next decade, and it's not at all clear to me how traditional manufacturers like Toyota will survive the transition.

TheSpiceIsLife 8y ago
> the pace at which Tesla is improving and innovating is far greater than the pace at which any other automaker is doing it. What portion of Telsa's pace of improvements and innovation would you say is due to Telsa only recently having got started at this, 16 years ago, compared to Toyota 86 year history of automobile manufacturing, or Ford's 116 years.
- HeadsUpHigh 8y ago
  Their ability to iterate fast for one thing. The fact that their structures are built around an all EV company. Toyota will have pressure from other departments to build and fund ICE research at the same time. Tesla is 100% focused on one thing. Plus they have the lowest cost batteries which plays a huge role. I think what the other car manufacturers are waiting for is to jump straight into solid state batteries once that train is going. That should at least reduce the advantage Tesla has right now.
  - gamblor956 8y ago
    Fast iteration is great for software. It's not so great for hardware, because iteration means that newer builds of existing models may not share the same parts or designs, increasing the costs of maintenance. It's even worse for consumer hardware, because consumers will do all sorts of crazy things to/with their hardware. Tesla couldn't keep up with the demand for repair parts before the Model 3 surge last fall. How will they manage if every part essentially needs to be custom made since they're constantly changing the parts?
    - freerobby 8y ago
      > How will they manage if every part essentially needs to be custom made since they're constantly changing the parts? That's not what happens in practice. Their revisions still obey interfaces wherever possible and follow the principles of modularity. E.g. when a v1 Model S door handle breaks, they replace it with the v3 version. When a v1 battery fails, they replace it with the v6 version.
clouddrover 8y ago
> it's not at all clear to me how traditional manufacturers like Toyota will survive the transition. Toyota will do it by being the world's largest car company. Toyota and Volkswagen each delivered over 10 million cars in 2018 alone: https://www.autoblog.com/2019/01/11/vw-group-2018-total-sales/ https://www.autoblog.com/2019/01/11/vw-group-2018-total-sale... Tesla meanwhile has sold somewhere in the order of 532,000 cars total since 2008: https://en.wikipedia.org/wiki/Tesla,_Inc.#Sales https://en.wikipedia.org/wiki/Tesla,_Inc.#Sales
reitzensteinm 8y ago
Just because an event doesn't happen doesn't mean its probably was zero. I believe Tesla will pull through, but there's a very real chance of it failing while trying to cross the chasm from wealthy enthusiasts to the mainstream.

TheSpiceIsLife 8y ago

> the pace at which Tesla is improving and innovating is far greater than the pace at which any other automaker is doing it. What portion of Telsa's pace of improvements and innovation would you say is due to Telsa only recently having got started at this, 16 years ago, compared to Toyota 86 year history of automobile manufacturing, or Ford's 116 years.

HeadsUpHigh 8y ago
Their ability to iterate fast for one thing. The fact that their structures are built around an all EV company. Toyota will have pressure from other departments to build and fund ICE research at the same time. Tesla is 100% focused on one thing. Plus they have the lowest cost batteries which plays a huge role. I think what the other car manufacturers are waiting for is to jump straight into solid state batteries once that train is going. That should at least reduce the advantage Tesla has right now.
- gamblor956 8y ago
  Fast iteration is great for software. It's not so great for hardware, because iteration means that newer builds of existing models may not share the same parts or designs, increasing the costs of maintenance. It's even worse for consumer hardware, because consumers will do all sorts of crazy things to/with their hardware. Tesla couldn't keep up with the demand for repair parts before the Model 3 surge last fall. How will they manage if every part essentially needs to be custom made since they're constantly changing the parts?
  - freerobby 8y ago
    > How will they manage if every part essentially needs to be custom made since they're constantly changing the parts? That's not what happens in practice. Their revisions still obey interfaces wherever possible and follow the principles of modularity. E.g. when a v1 Model S door handle breaks, they replace it with the v3 version. When a v1 battery fails, they replace it with the v6 version.

clouddrover 8y ago

> it's not at all clear to me how traditional manufacturers like Toyota will survive the transition. Toyota will do it by being the world's largest car company. Toyota and Volkswagen each delivered over 10 million cars in 2018 alone: https://www.autoblog.com/2019/01/11/vw-group-2018-total-sales/ https://www.autoblog.com/2019/01/11/vw-group-2018-total-sale... Tesla meanwhile has sold somewhere in the order of 532,000 cars total since 2008: https://en.wikipedia.org/wiki/Tesla,_Inc.#Sales https://en.wikipedia.org/wiki/Tesla,_Inc.#Sales

reitzensteinm 8y ago

Just because an event doesn't happen doesn't mean its probably was zero. I believe Tesla will pull through, but there's a very real chance of it failing while trying to cross the chasm from wealthy enthusiasts to the mainstream.