2 ms·
> Clearly, buyers today (whether they are aware of it or now) are anticipating Tesla to be greatly profitable in the future. Right. To justify the current tra
by xyzzyz 6y ago
> Clearly, buyers today (whether they are aware of it or now) are anticipating Tesla to be greatly profitable in the future.
Right. To justify the current trading levels, the expectations must be that it will capture significantly bigger part of its market than any of its competitor, and it will have better profit margins than them. I simply can't see that happening over long-terem horizon. I can definitely believe that Tesla will capture large part of the market, and in fact that it becomes number one automaker. I can also believe they will significantly enjoy higher profit margin than their competition. I just can't see any path to both at the same time: this would imply having some enormous advantage that none of its competitors can get even close to. Since the competitors are not bumbling morons, I think it's unlikely.
- marvin 6y agoSuch an advantage could be well-integrated self-driving capability, assuming they can make it work. Everyone seems to be assuming that this will be a commodity, but it might be very hard to achieve. If e.g. only two companies in the world achieve it in a reasonable timeframe, those companies will be able to price it such as to capture a large portion of the value. This is a huge market, and Tesla would already have millions of vehicles deployed.