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VW is the company with the third largest R&D budget, after Amazon and almost tied with Alphabet. More than ten times larger than Tesla. Over recent years they

VW is the company with the third largest R&D budget, after Amazon and almost tied with Alphabet. More than ten times larger than Tesla. Over recent years they built a substantial tech base for EVs that they are on the brink of introducing at scale. The Zwickau plant alone is planned to scale to 330000 EVs/y next year. ICE production at Zwickau is shut down. This is diametrically opposed to, for example, BMW who seem to be more doubling down on ICE with token efforts towards EVs for now. It's not insane to say that Tesla will eat BMWs share of the future, but that is valued ten times lower.

nickik 6y ago
I hate these 'R&D' budget argument. The can spend money but actually Tesla was first on all the important stuff. So have no idea why this all of a sudden is supposed to matter. VW can barley get the basic software for their EV right at the moment. The CEO has admitted the lead Tesla has. > planned to scale to 330000 EVs/y next year. They have been missing their claimed targets many times before. Even if they manage that, only a tiny % of current cars sold are electric. Nobody believes Tesla will own 100% of the market. If VW can actually make good on all those promesses, their stock will also go up. But having the legacy and investment of massively depreciating ICE assets and not shown the ability to produce profits with EVs, they will need to execute to convince investors again.
- Certhas 6y ago
  It's a question of ressources. Just like it's hard to see Microsoft becoming irrelevant simply because they have so much cash that they can just keep trying. What exactly was Tesla first on? They managed decent range but there EVs are simply not that difficult to build compared to ICEs. Software is big but they know they are behind they have the ressources, and the institutional commitment. It's not that I think Tesla should have the same cats/validation ratio as VW. They are ahead after all. But it's very hard to see the extend of the discrepancy in validation as justified over the long run for me. And it's not like VW is ignoring adjacent markets, Moia is a reasonably successful pilot, etc...
  - nickik 6y ago
    > What exactly was Tesla first on? They managed decent range but there EVs are simply not that difficult to build compared to ICEs. This myth simply does not hold up once you consider how pretty much all manufactures have run into massive problems with EV production and struggle to achieve margin. If it was so easy as claimed, Tesla would not multiple of the highest selling EV all over the world.
    - fomine3 6y ago
      Tesla need to sell EV but others not. Selling ICE/HV/PHEV cars is more profitable for now.
      - nickik 6y ago
        Stocks are forward looking into the future. Making big profits now was not moving the stocks up, and now companies like Ford are not even making much profit anymore. All that ICE infrastructure is massive bound up capital, that gone be a negative in a couple of years.

nickik 6y ago

I hate these 'R&D' budget argument. The can spend money but actually Tesla was first on all the important stuff. So have no idea why this all of a sudden is supposed to matter. VW can barley get the basic software for their EV right at the moment. The CEO has admitted the lead Tesla has. > planned to scale to 330000 EVs/y next year. They have been missing their claimed targets many times before. Even if they manage that, only a tiny % of current cars sold are electric. Nobody believes Tesla will own 100% of the market. If VW can actually make good on all those promesses, their stock will also go up. But having the legacy and investment of massively depreciating ICE assets and not shown the ability to produce profits with EVs, they will need to execute to convince investors again.

Certhas 6y ago
It's a question of ressources. Just like it's hard to see Microsoft becoming irrelevant simply because they have so much cash that they can just keep trying. What exactly was Tesla first on? They managed decent range but there EVs are simply not that difficult to build compared to ICEs. Software is big but they know they are behind they have the ressources, and the institutional commitment. It's not that I think Tesla should have the same cats/validation ratio as VW. They are ahead after all. But it's very hard to see the extend of the discrepancy in validation as justified over the long run for me. And it's not like VW is ignoring adjacent markets, Moia is a reasonably successful pilot, etc...
- nickik 6y ago
  > What exactly was Tesla first on? They managed decent range but there EVs are simply not that difficult to build compared to ICEs. This myth simply does not hold up once you consider how pretty much all manufactures have run into massive problems with EV production and struggle to achieve margin. If it was so easy as claimed, Tesla would not multiple of the highest selling EV all over the world.
  - fomine3 6y ago
    Tesla need to sell EV but others not. Selling ICE/HV/PHEV cars is more profitable for now.
    - nickik 6y ago
      Stocks are forward looking into the future. Making big profits now was not moving the stocks up, and now companies like Ford are not even making much profit anymore. All that ICE infrastructure is massive bound up capital, that gone be a negative in a couple of years.