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Tesla has no network effects as a marketplace and doesn't drive competitors out of the market. Both things Amazon traded their profits in for.
by _Codemonkeyism 7y ago
Tesla has no network effects as a marketplace and doesn't drive competitors out of the market. Both things Amazon traded their profits in for.
- dd36 7y agoIt has both those things. It’s literally devouring market share from similar class vehicles of competitors. The network effect is also happening slowly.
- _Codemonkeyism 7y agoFrom my point of view Tesla hasn't driven BMW, Audi or Mercedes out of business in the last 15 years, but I didn't take a look at their recent numbers, perhaps they already have.
- dd36 7y agoAnd Amazon didn't drive Walmart out of business. That's missing the point.
- benj111 7y agoThere are network effects, maybe not as strong, but they're there. Theres the supercharger network, if you have one car of a certain brand in your house hold, the others are probably disproportionately likely to be of the same brand, and this can radiate out to friends, family and work colleagues. Theres probably a 'no one got fired for buying IBM' element also. Tesla is kind of the default electric car, you aren't going to be judged harshly for buying one because most ev buyers do. I'm struggling to think of any individual car manufacturer that has driven other manufacturers out of the market. The market doesn't really work in a way, capital requirements are too high, lead times too long, to make that possible. Its still reasonable for them to forgo short term profits, just not quite to the same extent as the winner takes all nature of the internet.