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> who can compete with Tesla From my seat, that really remains to be seen. The existing companies don't seem to have found a way to compete with Tesla's EVs ye

> who can compete with Tesla From my seat, that really remains to be seen. The existing companies don't seem to have found a way to compete with Tesla's EVs yet. They may get there eventually, but Tesla has it now. Regarding valuation, one point I read elsewhere is that Tesla does a lot more in-house, which adds to the valuation, whereas the existing companies will buy a lot of their parts and/or contract out work. I don't have a source on the specifics, but if true, the logic certainly seems reasonable and would explain things. The value of a company shouldn't be based on their final product, but on the value they added to the parts/components they took in to create that product.

lhnz 7y ago
> Tesla does a lot more in-house, which adds to the > valuation, whereas the existing companies will buy > a lot of their parts and/or contract out work. In that respect, they remind me of Apple. However, I thought cars and their component parts were considered to be commodities. Are investors now arguing that not having hardware design know-how is going to hurt the big car companies?
- mywittyname 7y ago
  It's cheaper this way. The suppliers are beholden to their master and can live or die on a whim. GM, et al know the cost of manufacturing down to a penny and control supplier margins very tightly. They also collude with other manufactures to suppress prices.
woofcat 7y ago
>From my seat, that really remains to be seen. The existing companies don't seem to have found a way to compete with Tesla's EVs yet. They may get there eventually, but Tesla has it now. This somewhat reminds me of BlackBerry. They're basically the only game in town right now, and thus maintain a market advantage. However as larger companies shift to EV's as the technology matures how will Tesla be able to maintain its advantage and market valuation? Should the VW group, Toyota, or the Renault–Nissan–Mitsubishi Alliance decide to go all in on EV's will they be able to produce something akin to the iPhone to Tesla's BlackBerry?
- aerovistae 7y ago
  No! No, no, no. This will not happen. It's a total pipe dream. These ancient companies, so set in their ways, who have been incrementally making tiny adjustments to their cars for decades, will never "suddenly leap forward" to come out with something more advanced and more appealing than a Tesla. Tesla isn't the blackberry here, the other car companies are! You're basically the guy in 2008 saying "sure Apple has an advantage now, but what will they do when Blackberry catches up and shifts to touchscreen based phones?" Guess what never happened.
  - woofcat 7y ago
    >You're basically the guy in 2008 saying "sure Apple has an advantage now, but what will they do when Blackberry catches up and shifts to touchscreen based phones?" Not really. BlackBerry basically invented the smartphone, and introduced it to market success. We're talking pre-2008 BlackBerry is Tesla today. Tesla basically invented the EV, and is leading the market.
    - AnthonyMouse 7y ago
      I think where the analogy breaks is that Tesla didn't invent cars. Electric cars are new as a viable thing and have some advantages and disadvantages, but they're not a difference in kind, like a Blackberry/smartphone was over a thing that only makes phone calls. They compete directly with the old thing on the traditional terms, like performance and fuel cost. People are going to start preferring electric cars. They're faster and more efficient and battery improvements are likely to continue to reduce their disadvantages (up front cost and range). The traditional carmakers could make a strong commitment to electric cars right now, the question is will they? It's like asking Microsoft to embrace Linux in 1999. They could do it, and they might be better off if they did, but you can certainly see why they might drag their feet in a way that makes them worse off in the long run. They also have a huge problem with dealer incentives, because the dealers make most of their money on service and electric vehicles need less service, but the dealers are the ones choosing which cars to promote to anybody who walks in the door. It's no use to make a great electric car if any time somebody comes in looking to buy it, the dealer convinces them not to.
logicIsTruth 7y ago
I mean, multiple companies have higher quality electric vehicles, but that isn't what sells. The name is what's selling. Tesla's are pretty ugly, they have horrible reliability. You don't buy a Tesla for style, you buy it to show off.
- igrekel 7y ago
  Having tried all reasonably priced EVs, its not a question of style. My original plan was to get a Leaf but I ended up buying a Tesla. It just drives better than the other cars and you get a much better car with a larger second row, more practical cargo space with a Tesla than the other EV options. That is without mentioning that you have to wait months to get a Leaf plus or a Kona electric. The latest VW may be interesting but it didn't exist at the time. I don't see where the higher quality electric vehicles are coming from. It is a very polarizing car, some strangers will go up to you and tell you how Tesla will go bankrupt, you'll have no one to service the car, it will lose all its value and other things like that. "The name" is nearly a liability to me. It is just a car, it is useful.
  - CrazyStat 7y ago
    > "The name" is nearly a liability to me. Yes, same here. I also initially wanted a Leaf, in part because I don't really want my car to be so conspicuous--before the Tesla I drove a tan Corolla, about as inconspicuous as you can get. But the Leaf (and Bolt, which was the other EV option at the time) simply didn't make sense.
- CrazyStat 7y ago
  > multiple companies have higher quality electric vehicles When I bought my Tesla in mid-2018 the alternatives were the Bolt and the Leaf. Both had significantly worse range--I was looking at a 180-mile roundtrip commute for the next year, so range was important. Both were uncomfortably small for me. Neither matched Tesla's driver assist features for my almost entirely highway commute. Neither had fast-charging options along my commute route; Tesla had two superchargers. The situation has changed a bit in the last 1.5 years, but still nobody else matches Tesla's range or charging network. I'm not sure what metric you're using for quality, but Tesla won me over on features, not name. > Tesla's are pretty ugly Subjective. The X is a bit strange, but the falcon doors are actually super convenient (as long as they don't break). The S and 3 exteriors are both very nice looking in my opinion, though I'm not such a fan of the spartan interior on the 3.
auiya 7y ago
> The existing companies don't seem to have found a way to compete with Tesla's EVs yet If you look at actual vehicle sales, I'd say this quote is optimistic at best. Tesla is still very much fighting an uphill battle in terms of market share.
- bryanlarsen 7y ago
  Optimistic? In the US, Tesla is selling an order of magnitude more cars per month than value EV's like the Leaf and two orders of magnitude more than "Tesla killers" like the iPace or eTron. https://insideevs.com/news/343998/monthly-plug-in-ev-sales-scorecard/ https://insideevs.com/news/343998/monthly-plug-in-ev-sales-s...
  - auiya 7y ago
    Tesla isn't selling 1.3 million cars per year yet like Ford, so yes, optimistic. I wasn't speaking about strictly the EV market. Why would the big automakers need to compete in the EV market when EV adoption numbers still only amount to a rounding error in terms of the big companies' overall sales?
    - bryanlarsen 7y ago
      Why? Because it obviously won't be a rounding error in a few years time. 2 reasons. 1) We have to do something about climate change. Doesn't mean we will, but more and more countries besides Norway will get serious about it. 2) At some point BEV's will be price competitive with ICE. The $40K Tesla Cybertruck is cheaper than a medium duty crew cab from legacy manufacturers.
      - auiya 7y ago
        1) EV's will not solve this problem 2) Price is only a very small part of the adoption equation, people happily pay $80k for ICE pickup trucks for instance. 3) You didn't add this but I will - it's not clear the EV platform is the preferred alternative to the ICE for consumers yet, as evidenced by overall global vehicle sales.

lhnz 7y ago

> Tesla does a lot more in-house, which adds to the > valuation, whereas the existing companies will buy > a lot of their parts and/or contract out work. In that respect, they remind me of Apple. However, I thought cars and their component parts were considered to be commodities. Are investors now arguing that not having hardware design know-how is going to hurt the big car companies?

mywittyname 7y ago
It's cheaper this way. The suppliers are beholden to their master and can live or die on a whim. GM, et al know the cost of manufacturing down to a penny and control supplier margins very tightly. They also collude with other manufactures to suppress prices.

woofcat 7y ago

>From my seat, that really remains to be seen. The existing companies don't seem to have found a way to compete with Tesla's EVs yet. They may get there eventually, but Tesla has it now. This somewhat reminds me of BlackBerry. They're basically the only game in town right now, and thus maintain a market advantage. However as larger companies shift to EV's as the technology matures how will Tesla be able to maintain its advantage and market valuation? Should the VW group, Toyota, or the Renault–Nissan–Mitsubishi Alliance decide to go all in on EV's will they be able to produce something akin to the iPhone to Tesla's BlackBerry?

aerovistae 7y ago
No! No, no, no. This will not happen. It's a total pipe dream. These ancient companies, so set in their ways, who have been incrementally making tiny adjustments to their cars for decades, will never "suddenly leap forward" to come out with something more advanced and more appealing than a Tesla. Tesla isn't the blackberry here, the other car companies are! You're basically the guy in 2008 saying "sure Apple has an advantage now, but what will they do when Blackberry catches up and shifts to touchscreen based phones?" Guess what never happened.
- woofcat 7y ago
  >You're basically the guy in 2008 saying "sure Apple has an advantage now, but what will they do when Blackberry catches up and shifts to touchscreen based phones?" Not really. BlackBerry basically invented the smartphone, and introduced it to market success. We're talking pre-2008 BlackBerry is Tesla today. Tesla basically invented the EV, and is leading the market.
  - AnthonyMouse 7y ago
    I think where the analogy breaks is that Tesla didn't invent cars. Electric cars are new as a viable thing and have some advantages and disadvantages, but they're not a difference in kind, like a Blackberry/smartphone was over a thing that only makes phone calls. They compete directly with the old thing on the traditional terms, like performance and fuel cost. People are going to start preferring electric cars. They're faster and more efficient and battery improvements are likely to continue to reduce their disadvantages (up front cost and range). The traditional carmakers could make a strong commitment to electric cars right now, the question is will they? It's like asking Microsoft to embrace Linux in 1999. They could do it, and they might be better off if they did, but you can certainly see why they might drag their feet in a way that makes them worse off in the long run. They also have a huge problem with dealer incentives, because the dealers make most of their money on service and electric vehicles need less service, but the dealers are the ones choosing which cars to promote to anybody who walks in the door. It's no use to make a great electric car if any time somebody comes in looking to buy it, the dealer convinces them not to.

logicIsTruth 7y ago

I mean, multiple companies have higher quality electric vehicles, but that isn't what sells. The name is what's selling. Tesla's are pretty ugly, they have horrible reliability. You don't buy a Tesla for style, you buy it to show off.

igrekel 7y ago
Having tried all reasonably priced EVs, its not a question of style. My original plan was to get a Leaf but I ended up buying a Tesla. It just drives better than the other cars and you get a much better car with a larger second row, more practical cargo space with a Tesla than the other EV options. That is without mentioning that you have to wait months to get a Leaf plus or a Kona electric. The latest VW may be interesting but it didn't exist at the time. I don't see where the higher quality electric vehicles are coming from. It is a very polarizing car, some strangers will go up to you and tell you how Tesla will go bankrupt, you'll have no one to service the car, it will lose all its value and other things like that. "The name" is nearly a liability to me. It is just a car, it is useful.
- CrazyStat 7y ago
  > "The name" is nearly a liability to me. Yes, same here. I also initially wanted a Leaf, in part because I don't really want my car to be so conspicuous--before the Tesla I drove a tan Corolla, about as inconspicuous as you can get. But the Leaf (and Bolt, which was the other EV option at the time) simply didn't make sense.
CrazyStat 7y ago
> multiple companies have higher quality electric vehicles When I bought my Tesla in mid-2018 the alternatives were the Bolt and the Leaf. Both had significantly worse range--I was looking at a 180-mile roundtrip commute for the next year, so range was important. Both were uncomfortably small for me. Neither matched Tesla's driver assist features for my almost entirely highway commute. Neither had fast-charging options along my commute route; Tesla had two superchargers. The situation has changed a bit in the last 1.5 years, but still nobody else matches Tesla's range or charging network. I'm not sure what metric you're using for quality, but Tesla won me over on features, not name. > Tesla's are pretty ugly Subjective. The X is a bit strange, but the falcon doors are actually super convenient (as long as they don't break). The S and 3 exteriors are both very nice looking in my opinion, though I'm not such a fan of the spartan interior on the 3.

auiya 7y ago

> The existing companies don't seem to have found a way to compete with Tesla's EVs yet If you look at actual vehicle sales, I'd say this quote is optimistic at best. Tesla is still very much fighting an uphill battle in terms of market share.

bryanlarsen 7y ago
Optimistic? In the US, Tesla is selling an order of magnitude more cars per month than value EV's like the Leaf and two orders of magnitude more than "Tesla killers" like the iPace or eTron. https://insideevs.com/news/343998/monthly-plug-in-ev-sales-scorecard/ https://insideevs.com/news/343998/monthly-plug-in-ev-sales-s...
- auiya 7y ago
  Tesla isn't selling 1.3 million cars per year yet like Ford, so yes, optimistic. I wasn't speaking about strictly the EV market. Why would the big automakers need to compete in the EV market when EV adoption numbers still only amount to a rounding error in terms of the big companies' overall sales?
  - bryanlarsen 7y ago
    Why? Because it obviously won't be a rounding error in a few years time. 2 reasons. 1) We have to do something about climate change. Doesn't mean we will, but more and more countries besides Norway will get serious about it. 2) At some point BEV's will be price competitive with ICE. The $40K Tesla Cybertruck is cheaper than a medium duty crew cab from legacy manufacturers.
    - auiya 7y ago
      1) EV's will not solve this problem 2) Price is only a very small part of the adoption equation, people happily pay $80k for ICE pickup trucks for instance. 3) You didn't add this but I will - it's not clear the EV platform is the preferred alternative to the ICE for consumers yet, as evidenced by overall global vehicle sales.