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I also do not understand the valuation. Cars are not platforms and do not have network effects. Every few years a consumer is back on the market for a new car.

I also do not understand the valuation. Cars are not platforms and do not have network effects. Every few years a consumer is back on the market for a new car. It's not like they need to keep buying Tesla because all their apps or data or way of doing things is tied to the platform. People are more likely to switch car manufactures with absolute no loyalty than they are to switch between Google and Android.

gyanamo 6y ago
in my experience, Tesla owners are extremely loyal. although I agree that it's not network effect
saargrin 6y ago
it is ,to an extent the more teslas there are ,the more supercharging stations you can afford to deploy,making teslas even more valuable the more there are,the more miles you collect for your FSD AI the more there are,the bigger the scale of battery production,thus the batteries are cheaper (and i imagine the rest of supply chain gets cheaper with scale too)
- Traster 6y ago
  On each of those points there’s a very strong counter argument though- firstly there only needs to be enough charging stations, no one is buying a Ford because there are more Ford gas stations. It’s yet to be proven Tesla’s sensor arrangement will ever achieve FSD and they don’t get data for sensors they haven’t added yet. Finally, they probably have leadership in battery technology but that isn’t a network effect, there’s a limit to how much you get economies of scale in manufacturing.
  - saargrin 6y ago
    1. tesla stations are proprietary 2. we'll see but if it does work then theres your network effect 3. you get economies of scale by ... scaling
    - Traster 6y ago
      The point is that Tesla's economies of scale aren't going to be a comeptitive advantage against companies like Honda, Toyota, or Panasonic all of whom have huge economies of scale. For example, we don't say Apple's economies of scale are a competitive advantage, because most of their competitors have the same economies of scale, no one seriously believes Apple's scale gives it a significant advantage over Samsung. So at best you've got a propriety solution that's going to be swamped by the generic charging stations, a network effect on FSD that's entirely speculative, and no real advantage of scale.
ketamine__ 6y ago
> Every few years a consumer is back on the market for a new car. Who buys a new car every few years? Jesus, you guys are so rich.

gyanamo 6y ago

in my experience, Tesla owners are extremely loyal. although I agree that it's not network effect

saargrin 6y ago

it is ,to an extent the more teslas there are ,the more supercharging stations you can afford to deploy,making teslas even more valuable the more there are,the more miles you collect for your FSD AI the more there are,the bigger the scale of battery production,thus the batteries are cheaper (and i imagine the rest of supply chain gets cheaper with scale too)

Traster 6y ago
On each of those points there’s a very strong counter argument though- firstly there only needs to be enough charging stations, no one is buying a Ford because there are more Ford gas stations. It’s yet to be proven Tesla’s sensor arrangement will ever achieve FSD and they don’t get data for sensors they haven’t added yet. Finally, they probably have leadership in battery technology but that isn’t a network effect, there’s a limit to how much you get economies of scale in manufacturing.
- saargrin 6y ago
  1. tesla stations are proprietary 2. we'll see but if it does work then theres your network effect 3. you get economies of scale by ... scaling
  - Traster 6y ago
    The point is that Tesla's economies of scale aren't going to be a comeptitive advantage against companies like Honda, Toyota, or Panasonic all of whom have huge economies of scale. For example, we don't say Apple's economies of scale are a competitive advantage, because most of their competitors have the same economies of scale, no one seriously believes Apple's scale gives it a significant advantage over Samsung. So at best you've got a propriety solution that's going to be swamped by the generic charging stations, a network effect on FSD that's entirely speculative, and no real advantage of scale.

ketamine__ 6y ago

> Every few years a consumer is back on the market for a new car. Who buys a new car every few years? Jesus, you guys are so rich.