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One can perhaps think of this as Teslas blind spot. People living with California wages don’t necessarily see the difference in prices mattering that much.

theptip 6y ago
This is not a blind spot, it's explicitly part of their company's long-term strategy; Musk's plan from the beginning was to start with a luxury-tier offering (Roadster), and gradually work their way down the price-points as they achieved greater economies of scale. Musk wrote about this way back in the day (2006): https://www.tesla.com/blog/secret-tesla-motors-master-plan-just-between-you-and-me https://www.tesla.com/blog/secret-tesla-motors-master-plan-j... > Almost any new technology initially has high unit cost before it can be optimized and this is no less true for electric cars. The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model. You might criticize their execution for failing to reach the mass-market sedan price-point fast enough (though I think that they have done an impressive job of starting a car company from scratch), but I don't think the "blind spot" claim really holds water.
- sharpneli 6y ago
  Good point. So they simply were not able to ramp up faster than it took for the existing manufacturers to start catching up and leveraging their scale better.
  - omgwtfbyobbq 6y ago
    They seem to be ramping faster than anyone else. https://electrek.co/2020/10/30/tesla-tsla-market-share-global-ev-sales-change/ https://electrek.co/2020/10/30/tesla-tsla-market-share-globa... However they are not selling more EVs than everyone else in every market, which isn't a bad thing IMO. A smaller piece of a bigger pie is what they seem to be shooting for.
  - theptip 6y ago
    Yep, it's a classic "new market entrant is racing to become the incumbent before the incumbent(s) can copy their innovations" situation. It's a good illustration of why software is such a different paradigm than traditional physical economies; VCs can pour funding into a software company and since the marginal costs are close to zero, the innovator can blitz-scale and take over the market before the incumbent has time to react. However when "scaling" means building global logistics infrastructure, including factories for batteries and factories for cars, it's a lot harder to get the drop on the incumbents. I think the GP's comment is spot on though, if Tesla fails to win this race, they will still have been the driving force in bringing EV adoption forward by 5-10 years (perhaps more), which is an incredible achievement.
allendoerfer 6y ago
Norways GDP per capita is higher than Californias.
- rory 6y ago
  Disposable income seems like the more relevant number here, and in that California is higher ~(48k vs 38k USD, although numbers are a bit stale). https://en.wikipedia.org/wiki/Disposable_household_and_per_capita_income https://en.wikipedia.org/wiki/Disposable_household_and_per_c...
  - chmod775 6y ago
    It's not more relevant, because disposable income ignores things Norwegians get 'free' (because it is already deducted). Part of that 'deduction' pays for heavy tax-breaks and subsidies for electric cars in Norway. But then GDP is also an abhorrent metric to use for basically anything. If you use either GDP or 'disposable income' as a proxy metric to compare anything between countries, you should seriously re-evaluate what you're doing.
    - allendoerfer 6y ago
      I don't have to re-evaluate anything. I just wanted to tell OP that Norway is a very rich country and not in any way poorer than California.
    - rory 6y ago
      Teslas cost more (after those tax-breaks and subsidies) in Norway than in California. You're lacing the conversation with a lot of value judgements, but those aren't particularly relevant to the question of whether the people of California or Norway are more able to buy Teslas.
pkaye 6y ago
Also Musk's response during this pandemic has changed the tone around Tesla I think. Plus he has moved out of the bay area. I wonder how it will impact sales in the long run given California is their main market.

theptip 6y ago

This is not a blind spot, it's explicitly part of their company's long-term strategy; Musk's plan from the beginning was to start with a luxury-tier offering (Roadster), and gradually work their way down the price-points as they achieved greater economies of scale. Musk wrote about this way back in the day (2006): https://www.tesla.com/blog/secret-tesla-motors-master-plan-just-between-you-and-me https://www.tesla.com/blog/secret-tesla-motors-master-plan-j... > Almost any new technology initially has high unit cost before it can be optimized and this is no less true for electric cars. The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model. You might criticize their execution for failing to reach the mass-market sedan price-point fast enough (though I think that they have done an impressive job of starting a car company from scratch), but I don't think the "blind spot" claim really holds water.

sharpneli 6y ago
Good point. So they simply were not able to ramp up faster than it took for the existing manufacturers to start catching up and leveraging their scale better.
- omgwtfbyobbq 6y ago
  They seem to be ramping faster than anyone else. https://electrek.co/2020/10/30/tesla-tsla-market-share-global-ev-sales-change/ https://electrek.co/2020/10/30/tesla-tsla-market-share-globa... However they are not selling more EVs than everyone else in every market, which isn't a bad thing IMO. A smaller piece of a bigger pie is what they seem to be shooting for.
- theptip 6y ago
  Yep, it's a classic "new market entrant is racing to become the incumbent before the incumbent(s) can copy their innovations" situation. It's a good illustration of why software is such a different paradigm than traditional physical economies; VCs can pour funding into a software company and since the marginal costs are close to zero, the innovator can blitz-scale and take over the market before the incumbent has time to react. However when "scaling" means building global logistics infrastructure, including factories for batteries and factories for cars, it's a lot harder to get the drop on the incumbents. I think the GP's comment is spot on though, if Tesla fails to win this race, they will still have been the driving force in bringing EV adoption forward by 5-10 years (perhaps more), which is an incredible achievement.

allendoerfer 6y ago

Norways GDP per capita is higher than Californias.

rory 6y ago
Disposable income seems like the more relevant number here, and in that California is higher ~(48k vs 38k USD, although numbers are a bit stale). https://en.wikipedia.org/wiki/Disposable_household_and_per_capita_income https://en.wikipedia.org/wiki/Disposable_household_and_per_c...
- chmod775 6y ago
  It's not more relevant, because disposable income ignores things Norwegians get 'free' (because it is already deducted). Part of that 'deduction' pays for heavy tax-breaks and subsidies for electric cars in Norway. But then GDP is also an abhorrent metric to use for basically anything. If you use either GDP or 'disposable income' as a proxy metric to compare anything between countries, you should seriously re-evaluate what you're doing.
  - allendoerfer 6y ago
    I don't have to re-evaluate anything. I just wanted to tell OP that Norway is a very rich country and not in any way poorer than California.
  - rory 6y ago
    Teslas cost more (after those tax-breaks and subsidies) in Norway than in California. You're lacing the conversation with a lot of value judgements, but those aren't particularly relevant to the question of whether the people of California or Norway are more able to buy Teslas.

pkaye 6y ago

Also Musk's response during this pandemic has changed the tone around Tesla I think. Plus he has moved out of the bay area. I wonder how it will impact sales in the long run given California is their main market.