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That's because they could build them, but not profitably. Changing the design wholesale and then retooling your lines to build the cars at scale is insanely exp

That's because they could build them, but not profitably. Changing the design wholesale and then retooling your lines to build the cars at scale is insanely expensive and will take a long time to do. The i3 and Bolt are objective failures (in the US) because they're just not that good compared to what Tesla is doing at about the same price. The dealers also have an inverse incentive to sell them so one has to go way out of their way to purchase an electric from the legacy manufacturers. It's a classic disruption case against entrenched players who refuse to adapt. The only one making a real effort is VW and they're currently paying dearly for it.

shuckles 6y ago
You first point is around whether it’s economical. A carmaker can scale a program in ~3 years, so that they haven’t is almost certainly a conscious choice. Furthermore, the Bolt shares a production line with the Sonic so the process concerns are limited. In terms of competitiveness, the Bolt offered longer range at a lower price than the Model 3 at launch and still does. Here people respond by saying the Tesla is a much better driving experience because of software, but if that’s the case they’d be much more profitable selling their in car experience software on top of ICE vehicles. All that said, Tesla also doesn’t build and sell cars profitably. Selling credits is the source of their profits. EVs are not disruptive in any well-defined sense of that word. They are more expensive and do not create demand against non-consumption of automobiles. The disruptive electric mobility option is the explosion of personal form factors such as ebike, scooters, and the like.
- bryanlarsen 6y ago
  > All that said, Tesla also doesn’t build and sell cars profitably. Selling credits is the source of their profits. GAAP gross margin is 21%. They're making excellent profits on their cars.
  - shuckles 6y ago
    There are a lot of accounting choices that go into gross margin, and a forensic accountant could dedicate a year to understand the various shell games played by car companies between financing, depreciation on equipment, and warranty. So as a simple matter, it helps to double check the reported gross margin against EBIDTA. And with that measure, my comment stands: Tesla’s reported profits depend on continuing to sell regulatory credits.
    - bryanlarsen 6y ago
      Sure, if you assume fraud then anything goes. But barring that, GAAP is a well tested metric. It's been often gamed and then patched to plug the holes.
      - shuckles 6y ago
        I never assumed fraud. My comment is true of car companies generally.

shuckles 6y ago

You first point is around whether it’s economical. A carmaker can scale a program in ~3 years, so that they haven’t is almost certainly a conscious choice. Furthermore, the Bolt shares a production line with the Sonic so the process concerns are limited. In terms of competitiveness, the Bolt offered longer range at a lower price than the Model 3 at launch and still does. Here people respond by saying the Tesla is a much better driving experience because of software, but if that’s the case they’d be much more profitable selling their in car experience software on top of ICE vehicles. All that said, Tesla also doesn’t build and sell cars profitably. Selling credits is the source of their profits. EVs are not disruptive in any well-defined sense of that word. They are more expensive and do not create demand against non-consumption of automobiles. The disruptive electric mobility option is the explosion of personal form factors such as ebike, scooters, and the like.

bryanlarsen 6y ago
> All that said, Tesla also doesn’t build and sell cars profitably. Selling credits is the source of their profits. GAAP gross margin is 21%. They're making excellent profits on their cars.
- shuckles 6y ago
  There are a lot of accounting choices that go into gross margin, and a forensic accountant could dedicate a year to understand the various shell games played by car companies between financing, depreciation on equipment, and warranty. So as a simple matter, it helps to double check the reported gross margin against EBIDTA. And with that measure, my comment stands: Tesla’s reported profits depend on continuing to sell regulatory credits.
  - bryanlarsen 6y ago
    Sure, if you assume fraud then anything goes. But barring that, GAAP is a well tested metric. It's been often gamed and then patched to plug the holes.
    - shuckles 6y ago
      I never assumed fraud. My comment is true of car companies generally.