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I think the Prof covers it here "...Yes, he is a genius, Tesla has changed the world for the better (I believe this). And … Tesla doesn’t have the scale to com

I think the Prof covers it here "...Yes, he is a genius, Tesla has changed the world for the better (I believe this). And … Tesla doesn’t have the scale to compete in a well-run, low-margin business — auto." I'd love to hear counter-arguments..

MarkMc 7y ago
Low-margin yes, but is the motor vehicle industry really so well run? GM was the biggest auto company in the world for decades, then it basically went bankrupt. Toyota has been blindsided by both electric and self-driving technology. When will a Volkswagen car get 'sentry mode' which can identify the person who keys it? The incumbents have enormous corporate inertia which has allowed the smaller Tesla to develop a better car. And by the time the big guys catch up, Tesla will have the scale needed to compete
- m0zg 7y ago
  >> self-driving technology Which _does not exist_ yet, and will not exist for at least another decade in a form that can be mass-deployed on public roads without causing mayhem.
- SideburnsOfDoom 7y ago
  > but is the motor vehicle industry really so well run? Is Volkswagen well run? Judge for yourself: https://en.wikipedia.org/wiki/Volkswagen_emissions_scandal https://en.wikipedia.org/wiki/Volkswagen_emissions_scandal https://www.bbc.co.uk/news/business-47578888 https://www.bbc.co.uk/news/business-47578888 https://www.theguardian.com/business/2019/sep/30/volkswagen-emissions-scandal-mass-lawsuit-opens-in-germany https://www.theguardian.com/business/2019/sep/30/volkswagen-...
  - SideburnsOfDoom 7y ago
    To give my opinion: The Dieselgate scandal shows that Volkswagen (and other implicated companies) are not well run. You could make the argument that this kind of cheating is a form of optimising for profit and therefor doing it well is "well run". But I find that argument sociopathic and short-term. And it opens the can of worms of the broader context of the industry: Are you doing something, well or not, that you shouldn't be doing at all (in this case, producing engines that turn fossil fuels into pollution) But, make your own mind up.
- vmurthy 7y ago
  > Low-margin yes, but is the motor vehicle industry really so well run? My understanding of different businesses is this: If you are in a high-margin industry, you can screw up and still be around and maybe even thrive (think Coca-Cola/MS and their ventures into so many fields). If you're in a low-margin business, you're already walking on thin-ice and have to be operationally great. That tilts the odds against many of the newbies. Of course, I don't want to comment on Tesla's operational capabilities or write it off like Prof Galloway does.
olliej 7y ago
The problem is comparing a bunch of businesses with a model that depends on taking a loss on every transaction, even while skirting the law. If nothing else Tesla could just become another luxury car company, and those haven’t ever been particularly price sensitive.
- mamon 7y ago
  Tesla is priced as a luxury car, but to really be one they have to do some serious improvements on their interior design. Current Teslas has a really cheap look and feel.

MarkMc 7y ago

Low-margin yes, but is the motor vehicle industry really so well run? GM was the biggest auto company in the world for decades, then it basically went bankrupt. Toyota has been blindsided by both electric and self-driving technology. When will a Volkswagen car get 'sentry mode' which can identify the person who keys it? The incumbents have enormous corporate inertia which has allowed the smaller Tesla to develop a better car. And by the time the big guys catch up, Tesla will have the scale needed to compete

m0zg 7y ago
>> self-driving technology Which _does not exist_ yet, and will not exist for at least another decade in a form that can be mass-deployed on public roads without causing mayhem.
SideburnsOfDoom 7y ago
> but is the motor vehicle industry really so well run? Is Volkswagen well run? Judge for yourself: https://en.wikipedia.org/wiki/Volkswagen_emissions_scandal https://en.wikipedia.org/wiki/Volkswagen_emissions_scandal https://www.bbc.co.uk/news/business-47578888 https://www.bbc.co.uk/news/business-47578888 https://www.theguardian.com/business/2019/sep/30/volkswagen-emissions-scandal-mass-lawsuit-opens-in-germany https://www.theguardian.com/business/2019/sep/30/volkswagen-...
- SideburnsOfDoom 7y ago
  To give my opinion: The Dieselgate scandal shows that Volkswagen (and other implicated companies) are not well run. You could make the argument that this kind of cheating is a form of optimising for profit and therefor doing it well is "well run". But I find that argument sociopathic and short-term. And it opens the can of worms of the broader context of the industry: Are you doing something, well or not, that you shouldn't be doing at all (in this case, producing engines that turn fossil fuels into pollution) But, make your own mind up.
vmurthy 7y ago
> Low-margin yes, but is the motor vehicle industry really so well run? My understanding of different businesses is this: If you are in a high-margin industry, you can screw up and still be around and maybe even thrive (think Coca-Cola/MS and their ventures into so many fields). If you're in a low-margin business, you're already walking on thin-ice and have to be operationally great. That tilts the odds against many of the newbies. Of course, I don't want to comment on Tesla's operational capabilities or write it off like Prof Galloway does.

olliej 7y ago

The problem is comparing a bunch of businesses with a model that depends on taking a loss on every transaction, even while skirting the law. If nothing else Tesla could just become another luxury car company, and those haven’t ever been particularly price sensitive.

mamon 7y ago
Tesla is priced as a luxury car, but to really be one they have to do some serious improvements on their interior design. Current Teslas has a really cheap look and feel.