9 ms·

it's a bet that tesla will convert their marketshare into real production numbers. The bet is based on assumption that entire market will shift to electric cars

by maxdo 6y ago

it's a bet that tesla will convert their marketshare into real production numbers. The bet is based on assumption that entire market will shift to electric cars in 5-10 years. To give you understanding the current numbers. In 2020 tesla will deliver ~19% of what BMW delivers. BMW probably is the most direct traditional competitor. Luxury sport segment. 25% of audi and 5% of what toyota delivers. To keep this valuation assumption in place, tesla can lose a lot of market share and only "keep" 20%-30%. In this case it will outsold any other car brand and will outperform it's valuation. They could remain their share higher. In this case they are undervalued. They obviously can loose competition to traditional players, but also to emerging Chinese brands. Musk himself consider them a bigger competitor. The market itself can shirk a lot, due to robotization, in this case you don't have to own a car in most of the cases. In this case the entire market will be changed dramatically and current valuation doesn't make any sense.

jariel 6y ago
The other auto makers will make electrics cars and people will buy them. The magic ingredients at Tesla are just not that magic.
- fastball 6y ago
  And yet not a single one of them was able to make electric cars attractive enough to buy until Tesla showed them the way.
  - brandonmenc 6y ago
    Just like Apple once showed everyone how to mass market a graphical OS, and then...
    - fastball 6y ago
      Apple became one of the largest companies on earth, with a mkt cap of 2T.
      - brandonmenc 6y ago
        Microsoft still exists and has a market cap of over $1.5T, which proves my point. The belief that all the other established automakers won't catch up is absurd.
        fastball 6y ago
        Tesla has a proven track record of innovation and investing heavily in the future. Most other automakers... not so much.
  - Xixi 6y ago
    Being first is great if you are building a social network. But why would it matter when buying a car? Sure, Tesla showed that it was possible (and Nissan with the Leaf), but being affordable matters more than being first. In any case, infrastructure matters even more for EVs. I was in the market for an EV car in Japan, and ended up buying an ICE car, with the intent to switch in 5~10 years when the infrastructure catches up. I live in a brand new building and it's not even equipped for EVs! Crazy. The only EV owners I know have houses. I hope things will change thanks to the new Suga administration that seems somewhat more forward thinking than the Abe one in these matters... We will see.
    - fastball 6y ago
      All of your points just seem to support Tesla. It's not that Tesla was first, it's that they are seriously ahead, and it takes a lot to catch up, and by the time others do, their market share will have been cannibalized. - Tesla battery production is overtaking the rest of the world combined. For electric cars you need batteries, and Tesla has them. Everyone else is at a minimum years behind in this regard. - Tesla's prices keep going down, while some of the most competitive electric cars being released besides Teslas (Porsche Taycan for instance) are more than the price point TSLA was at 10 years ago. - Tesla has the most extensive charging infrastructure of anyone, period.
      - vel0city 6y ago
        Tesla might have one of the largest single charging network, but by default in the US they only support their own proprietary chargers. I see far more non-Tesla chargers around in my area. They're different brands, but they all use the same standardized plug. Just go to any site showing chargers in your area. Turn on just the Tesla and Supercharger plugs. Then turn on just the J1772 and CCS plugs. See which one looks to be the bigger network. https://www.plugshare.com/ https://www.plugshare.com/
        fastball 6y ago
        Yes, but you can plug your Tesla into non-Tesla chargers if you buy an adapter. Doesn't work the other way around (and for many of those 3rd party networks they have the Tesla connector anyway AFAIK).
  - marticode 6y ago
    The Renault Zoe has been out since 2012 and still frequently tops the European EV sales chart, ahead of the Model 3.
  - jariel 6y ago
    "And yet not a single one of them was able to make electric cars attractive enough to buy until Tesla showed them the way." First, that's only partly true i.e. a matter of timing. Second, it doesn't really matter though. They will sell cars and trucks that are much the same as today, that people want, but are electric.
- nickik 6y ago
  Go look up how the global battery supply chain works.
Xixi 6y ago
More and more countries, especially in Europe, are setting a deadline of 2030 for sale of new ICE cars. So the assumption sounds correct. On the other hand Tesla market share of EV cars in Germany in 2020 is barely 12% (in terms of unit, certainly higher in EUR) [1]. I expect numbers to be worse in countries that favor smaller cars (France, for instance). Most European auto makers are barely starting to release EV cars, and Tesla is already close to single digit market shares. They are here to stay, but like other US brands I don't think they have such a bright future outside of the US. [1] https://cleantechnica.com/2020/11/22/18-plugin-vehicle-share-in-germany-in-october-record-month/ https://cleantechnica.com/2020/11/22/18-plugin-vehicle-share...
- neogodless 6y ago
  Aside from self-driving and software, electric cars are described as simpler devices than internal combustion engine (ICE) powered machines. Lower maintenance and all that. As simpler devices, building them should be something competitors are able to do. Battery technology is also, of course, critical to get the right balance of price, range, charging speed, production numbers, etc. So given global regulations putting pressure on industry conversion from ICE to electric powertrains, there is zero doubt that investments will be made by big players and they will have to stop playing games and putting out weird-looking vehicles they do not really intend to sell. This will have an impact on Tesla's presumed dominance of electric cars, but how much of an impact is hotly contested!
- nickik 6y ago
  Because of EU regulation all car makers have dropped all their plug in cars into Europe. Yes that dropped Tesla market share in Europe, but it also means that many cars wont even be sold in the US. Many of those cars in Europe are also plug-in hybrid, a pass over solution that also has to be replaced. Even more of them are small city cars with short range. The same stories btw were going around about China. Tesla is losing market share in China and so on. And then Tesla opened a factory there, and guess what happened. The same thing will be with Europe, once Tesla has a huge factory there, their market share will grow again. That Tesla has even 12% (again with plug-in hybrids) share in Europe with a factory in California, compared to all the German and French companies who are producing locally is actually impressive. Tesla globally has 28% of the pure BEV market, and that what matter the most.

by maxdo 6y ago

jariel 6y ago

The other auto makers will make electrics cars and people will buy them. The magic ingredients at Tesla are just not that magic.

fastball 6y ago
And yet not a single one of them was able to make electric cars attractive enough to buy until Tesla showed them the way.
- brandonmenc 6y ago
  Just like Apple once showed everyone how to mass market a graphical OS, and then...
  - fastball 6y ago
    Apple became one of the largest companies on earth, with a mkt cap of 2T.
    - brandonmenc 6y ago
      Microsoft still exists and has a market cap of over $1.5T, which proves my point. The belief that all the other established automakers won't catch up is absurd.
      - fastball 6y ago
        Tesla has a proven track record of innovation and investing heavily in the future. Most other automakers... not so much.
- Xixi 6y ago
  Being first is great if you are building a social network. But why would it matter when buying a car? Sure, Tesla showed that it was possible (and Nissan with the Leaf), but being affordable matters more than being first. In any case, infrastructure matters even more for EVs. I was in the market for an EV car in Japan, and ended up buying an ICE car, with the intent to switch in 5~10 years when the infrastructure catches up. I live in a brand new building and it's not even equipped for EVs! Crazy. The only EV owners I know have houses. I hope things will change thanks to the new Suga administration that seems somewhat more forward thinking than the Abe one in these matters... We will see.
  - fastball 6y ago
    All of your points just seem to support Tesla. It's not that Tesla was first, it's that they are seriously ahead, and it takes a lot to catch up, and by the time others do, their market share will have been cannibalized. - Tesla battery production is overtaking the rest of the world combined. For electric cars you need batteries, and Tesla has them. Everyone else is at a minimum years behind in this regard. - Tesla's prices keep going down, while some of the most competitive electric cars being released besides Teslas (Porsche Taycan for instance) are more than the price point TSLA was at 10 years ago. - Tesla has the most extensive charging infrastructure of anyone, period.
    - vel0city 6y ago
      Tesla might have one of the largest single charging network, but by default in the US they only support their own proprietary chargers. I see far more non-Tesla chargers around in my area. They're different brands, but they all use the same standardized plug. Just go to any site showing chargers in your area. Turn on just the Tesla and Supercharger plugs. Then turn on just the J1772 and CCS plugs. See which one looks to be the bigger network. https://www.plugshare.com/ https://www.plugshare.com/
      - fastball 6y ago
        Yes, but you can plug your Tesla into non-Tesla chargers if you buy an adapter. Doesn't work the other way around (and for many of those 3rd party networks they have the Tesla connector anyway AFAIK).
- marticode 6y ago
  The Renault Zoe has been out since 2012 and still frequently tops the European EV sales chart, ahead of the Model 3.
- jariel 6y ago
  "And yet not a single one of them was able to make electric cars attractive enough to buy until Tesla showed them the way." First, that's only partly true i.e. a matter of timing. Second, it doesn't really matter though. They will sell cars and trucks that are much the same as today, that people want, but are electric.
nickik 6y ago
Go look up how the global battery supply chain works.

Xixi 6y ago

More and more countries, especially in Europe, are setting a deadline of 2030 for sale of new ICE cars. So the assumption sounds correct. On the other hand Tesla market share of EV cars in Germany in 2020 is barely 12% (in terms of unit, certainly higher in EUR) [1]. I expect numbers to be worse in countries that favor smaller cars (France, for instance). Most European auto makers are barely starting to release EV cars, and Tesla is already close to single digit market shares. They are here to stay, but like other US brands I don't think they have such a bright future outside of the US. [1] https://cleantechnica.com/2020/11/22/18-plugin-vehicle-share-in-germany-in-october-record-month/ https://cleantechnica.com/2020/11/22/18-plugin-vehicle-share...

neogodless 6y ago
Aside from self-driving and software, electric cars are described as simpler devices than internal combustion engine (ICE) powered machines. Lower maintenance and all that. As simpler devices, building them should be something competitors are able to do. Battery technology is also, of course, critical to get the right balance of price, range, charging speed, production numbers, etc. So given global regulations putting pressure on industry conversion from ICE to electric powertrains, there is zero doubt that investments will be made by big players and they will have to stop playing games and putting out weird-looking vehicles they do not really intend to sell. This will have an impact on Tesla's presumed dominance of electric cars, but how much of an impact is hotly contested!
nickik 6y ago
Because of EU regulation all car makers have dropped all their plug in cars into Europe. Yes that dropped Tesla market share in Europe, but it also means that many cars wont even be sold in the US. Many of those cars in Europe are also plug-in hybrid, a pass over solution that also has to be replaced. Even more of them are small city cars with short range. The same stories btw were going around about China. Tesla is losing market share in China and so on. And then Tesla opened a factory there, and guess what happened. The same thing will be with Europe, once Tesla has a huge factory there, their market share will grow again. That Tesla has even 12% (again with plug-in hybrids) share in Europe with a factory in California, compared to all the German and French companies who are producing locally is actually impressive. Tesla globally has 28% of the pure BEV market, and that what matter the most.