3 ms·
> 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.
by 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 agoIt'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.