3 ms·

Wouldnt this suggest that Tesla has won? If their sales are increasing and market share is dropping that signals that incumbants have been dragged kicking and

Wouldnt this suggest that Tesla has won? If their sales are increasing and market share is dropping that signals that incumbants have been dragged kicking and screaming into the EV market As an investor in TSLA I dont understand why this is presented as a negative outcome, its quite literally what they are attempting to do by making their patents open.

sidlls 4y ago
If Tesla's goal was to sacrifice itself to bring EVs to the masses, sure. Tesla's models aimed at the masses (3, Y, X) are inferior to their competitors' equivalents in every aspect but one (access to Tesla's charging network), as far as I can tell. That isn't a good position to be in, market wise.
- megaman821 4y ago
  You aren't being objective if you think they are behind in every metric. Model 3/Y has better range, better thermal management, better acceleration, better software, and fewer parts than any of its direct competitors.
- throwaway69123 4y ago
  I disagree with the implication that a company whose sales are growing 35% a year is sacrificing itself just because the market size is growing faster than they can manufacturer cars.
est31 4y ago
A lot of Tesla fans have been saying how the incumbents are unable to compete with Tesla in the EV segment, and with all driving going electric this would mean very high Tesla market shares in the future car market. 10 years ago this was the case indeed, Tesla was way ahead. But the issue was that these people haven't updated their views to today, and still keep repeating that belief. Now, incumbents have brought out very strong car models onto the market, at really competitive conditions. The future is electric, yes, but not with high enough market shares for Tesla to to justify its share price (which in fact is so high, even if Tesla had 100% market share, it would still be unjustified but that's another thing). The patent opening also happened 10 years ago.
- throwaway69123 4y ago
  I think you can still make a very strong argument that incumbants are still struggling to reach manufacturing scale and profitability with their EV's.
  - bhauer 4y ago
    Looking at the Cox Automotive data for Q1 2023 (not just January and February as Jalopnik selected), it's difficult to spin the competition as anything but a bunch of fighting over scraps. Chart here: https://pbs.twimg.com/media/Fth_aAtXwBQDUvK?format=png&name=900x900 https://pbs.twimg.com/media/Fth_aAtXwBQDUvK?format=png&name=...
    - est31 4y ago
      That's US data FTR, and 62% is indeed impressive. Globally, Tesla has 12% market share however. BYD Auto, a Chinese manufacturer, has 20%, so Tesla is only second globally. https://www.counterpointresearch.com/global-electric-vehicle-market-share/ https://www.counterpointresearch.com/global-electric-vehicle...
      - bhauer 4y ago
        Note that your data includes PHEVs, and is not limited to BEVs. While BYD is growing fast, they are not yet ahead of Tesla in BEV units.
mdasen 4y ago
> As an investor in TSLA I dont understand why this is presented as a negative outcome I think there's a real question as to how much marketshare Tesla will have in the future. As you note, Tesla may have dragged incumbents into the EV market kicking and screaming. That doesn't mean Tesla will end up as a winner in that market. Right now, Tesla has a market cap of $572B. That's 3x more than Toyota and nearly 7x more than Volkswagen (#2 and 3 by market cap). Let's say that Tesla becomes the next Toyota in 10 years. To an extent, that means Tesla being worth significantly less in 10 years than today. It seems more likely that Tesla would end up in the Mazda to Volkswagen part of the market - $5B to $85B. Maybe Tesla will have amazing margins that never fade. That seems unlikely. Companies generally can't hold onto margins without significant ways of keeping out competition. What is keeping a competitor from creating a similarly appealing vehicle forcing Tesla to lower prices and margins? I'm not saying that Tesla doesn't have some advantages. Their early investments in EVs put them in a good position. However, those advantages probably aren't going to last a decade. This is bad news for Tesla because as the incumbents ramp up their EV offerings, Tesla's share of the pie is going to continue shrinking. Right now, it's 62% and there's barely any competition. As competitors actually get models to market, things might change fast. Chevy will be getting their Blazor and Equinox EV SUVs to market soon. Hyundai and Kia are ramping up their EV options. VW will likely be introducing more. Ford can't keep its F-150 Lightning in stock, but will be ramping up EV capabilities. Not only the incumbents, but new players like Rivian and Fisker are getting into the game. The Chinese Polestar (owned by Geely via its purchase of Volvo) is bringing its vehicles to the US. It might only be a matter of time before BYD joins. What does Tesla look like in a decade? Are they selling more cars than Toyota is today? I doubt it - not even because of any judgment about Tesla; it's just that the odds of any company (no matter how great) achieving that are just so small. I think the most likely outcome is that Tesla's margins fall as they need to lower prices to deal with a newly competitive EV market, they continue growing, and they become a successful car company like BMW. But BMW isn't worth $572B. There's even a case to be made that they'll end up more like Honda, worth less than a tenth of what Tesla is worth. This is bad news because it means that once other EVs are available, Tesla becomes a smaller share of EV sales. As more models become available and competitors get better at it, Tesla's marketshare will likely fall to that of a normal car company. That wouldn't be a problem if Tesla were priced like a normal car company (or priced like a company that could become a normal car company in a decade). The problem is that Tesla is priced like it's going to take over the entire auto industry leaving every company dead in its path. Tesla has won their argument: that EVs are a viable vehicle. That's very different from winning from the perspective of an investor.

sidlls 4y ago

If Tesla's goal was to sacrifice itself to bring EVs to the masses, sure. Tesla's models aimed at the masses (3, Y, X) are inferior to their competitors' equivalents in every aspect but one (access to Tesla's charging network), as far as I can tell. That isn't a good position to be in, market wise.

megaman821 4y ago
You aren't being objective if you think they are behind in every metric. Model 3/Y has better range, better thermal management, better acceleration, better software, and fewer parts than any of its direct competitors.
throwaway69123 4y ago
I disagree with the implication that a company whose sales are growing 35% a year is sacrificing itself just because the market size is growing faster than they can manufacturer cars.

est31 4y ago

A lot of Tesla fans have been saying how the incumbents are unable to compete with Tesla in the EV segment, and with all driving going electric this would mean very high Tesla market shares in the future car market. 10 years ago this was the case indeed, Tesla was way ahead. But the issue was that these people haven't updated their views to today, and still keep repeating that belief. Now, incumbents have brought out very strong car models onto the market, at really competitive conditions. The future is electric, yes, but not with high enough market shares for Tesla to to justify its share price (which in fact is so high, even if Tesla had 100% market share, it would still be unjustified but that's another thing). The patent opening also happened 10 years ago.

throwaway69123 4y ago
I think you can still make a very strong argument that incumbants are still struggling to reach manufacturing scale and profitability with their EV's.
- bhauer 4y ago
  Looking at the Cox Automotive data for Q1 2023 (not just January and February as Jalopnik selected), it's difficult to spin the competition as anything but a bunch of fighting over scraps. Chart here: https://pbs.twimg.com/media/Fth_aAtXwBQDUvK?format=png&name=900x900 https://pbs.twimg.com/media/Fth_aAtXwBQDUvK?format=png&name=...
  - est31 4y ago
    That's US data FTR, and 62% is indeed impressive. Globally, Tesla has 12% market share however. BYD Auto, a Chinese manufacturer, has 20%, so Tesla is only second globally. https://www.counterpointresearch.com/global-electric-vehicle-market-share/ https://www.counterpointresearch.com/global-electric-vehicle...
    - bhauer 4y ago
      Note that your data includes PHEVs, and is not limited to BEVs. While BYD is growing fast, they are not yet ahead of Tesla in BEV units.

mdasen 4y ago

> As an investor in TSLA I dont understand why this is presented as a negative outcome I think there's a real question as to how much marketshare Tesla will have in the future. As you note, Tesla may have dragged incumbents into the EV market kicking and screaming. That doesn't mean Tesla will end up as a winner in that market. Right now, Tesla has a market cap of $572B. That's 3x more than Toyota and nearly 7x more than Volkswagen (#2 and 3 by market cap). Let's say that Tesla becomes the next Toyota in 10 years. To an extent, that means Tesla being worth significantly less in 10 years than today. It seems more likely that Tesla would end up in the Mazda to Volkswagen part of the market - $5B to $85B. Maybe Tesla will have amazing margins that never fade. That seems unlikely. Companies generally can't hold onto margins without significant ways of keeping out competition. What is keeping a competitor from creating a similarly appealing vehicle forcing Tesla to lower prices and margins? I'm not saying that Tesla doesn't have some advantages. Their early investments in EVs put them in a good position. However, those advantages probably aren't going to last a decade. This is bad news for Tesla because as the incumbents ramp up their EV offerings, Tesla's share of the pie is going to continue shrinking. Right now, it's 62% and there's barely any competition. As competitors actually get models to market, things might change fast. Chevy will be getting their Blazor and Equinox EV SUVs to market soon. Hyundai and Kia are ramping up their EV options. VW will likely be introducing more. Ford can't keep its F-150 Lightning in stock, but will be ramping up EV capabilities. Not only the incumbents, but new players like Rivian and Fisker are getting into the game. The Chinese Polestar (owned by Geely via its purchase of Volvo) is bringing its vehicles to the US. It might only be a matter of time before BYD joins. What does Tesla look like in a decade? Are they selling more cars than Toyota is today? I doubt it - not even because of any judgment about Tesla; it's just that the odds of any company (no matter how great) achieving that are just so small. I think the most likely outcome is that Tesla's margins fall as they need to lower prices to deal with a newly competitive EV market, they continue growing, and they become a successful car company like BMW. But BMW isn't worth $572B. There's even a case to be made that they'll end up more like Honda, worth less than a tenth of what Tesla is worth. This is bad news because it means that once other EVs are available, Tesla becomes a smaller share of EV sales. As more models become available and competitors get better at it, Tesla's marketshare will likely fall to that of a normal car company. That wouldn't be a problem if Tesla were priced like a normal car company (or priced like a company that could become a normal car company in a decade). The problem is that Tesla is priced like it's going to take over the entire auto industry leaving every company dead in its path. Tesla has won their argument: that EVs are a viable vehicle. That's very different from winning from the perspective of an investor.