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This feels like the start of a lawsuit. If Tesla is state of the art and requires 5x less funding per charger than competition; what is the reasoning behind pic

This feels like the start of a lawsuit. If Tesla is state of the art and requires 5x less funding per charger than competition; what is the reasoning behind picking the competitors?

vlovich123 3y ago
Why a lawsuit? Here’s a better question. Is Tesla leveraging their market cap and cash reserves to capture a monopoly position on chargers? I’d want to make sure that market competitiveness is a thing. Otherwise you have a company that turns its behavior on all fronts into rent seeking.
- fnordpiglet 3y ago
  I don’t doubt their efficiency and scale effects stack up to an enormous advantage. Absolutely their ability to finance impacts the unit costs of chargers very few if any other company could match. However: * being extraordinarily well positioned to compete isn’t a crime or legally anticompetitive. It might be if they had a non competitive market monopoly in another market they’re leveraging in this market. But they don’t. * lose leading isn’t illegal or sanctionable unless it fits fairly narrow constraints in antitrust law * probably most importantly they have the only proven ability to deliver a critical national infrastructure to meet national energy, environmental, and security goals. They will be afforded remarkable leeway for some time. * they’re actually weakening their grip on the EV market by opening the charger adapter spec and licensing access to competitors. If the supercharger network were plausibly their money maker eyes might squint. But it’s not. It’s an enablement to the entire industry, including their competitors. And it’s not reasonable to say the EV market lacks competitors. That doesn’t mean this won’t change in the future. But I fully expect a Standard Oil world where EV charging is owned by Tesla. Then, legal market remedies would be squarely on the table.
  - vlovich123 3y ago
    > being extraordinarily well positioned to compete isn’t a crime or legally anticompetitive Actually, using profits in one sector to dominate a second is pretty classical monopolist behavior. I’m fine with competition but if the bid is insincere because they’re not going to do the work for that number - the winner typically pays what the 2nd bidder bid typically in such contracts - or because it’s to capture a monopoly position and recoup the rest of the investment through rent seeking over the long term, these are negative behaviors we should discourage through various means. > And it’s not reasonable to say the EV market lacks competitors. That was true of the internet too. Yet somehow we ended up with a handful of major tech companies. > But I fully expect a Standard Oil world where EV charging is owned by Tesla. Then, legal market remedies would be squarely on the table. Wait. So you agree this strategy that Tesla is employing is likely to cause a problem in the future but your position is to remedy it in the future after it’s obviously an even bigger problem with jobs tied to it making it more politically risky, the legal and political climate being a joke on antitrust at the moment? Also the rest of what you wrote is basically “there’s no law against it”. I’m saying there should be laws against predatory pricing and simple ones like your penalty is paying a fine which is based on what a fair price would have been and how much you’ve cost the economy through that behavior which government regulators and academic economists get to determine independently (& pick the highest price). You don’t need to do this for all companies - just ones who have enough cash flow that such behaviors are possible in the first place (a startup that’s not turning over a billion or so per quarter has a hard time pulling this kind of shit). Oh and treat fundraising like revenue a bit in that it counts towards you being regulated (eg if you’re market cap in a private market is >1B you can’t have any loss leading products).
    - fnordpiglet 3y ago
      * You have to have a monopoly in the other sector for it run afoul. Many companies enter new segments by loss leading taking profits from their established non-monopoly business to subsidize their growth in another segment. That’s not illegal in the least and is extremely wide spread. In fact the opposite in this situation is true. The EV market is extremely competitive but the supercharger market is dominated by Tesla. The fact they’re opening it up for use by competitors in EV means they’re not leveraging their supercharger hegemony to kill off EV competitors. * “the internet” isn’t a single market segment. There are a lot of monopolies though, and I would point you to the ongoing antitrust lawsuits. * you can’t proactively take someone for violating a law in the future to court. Yes they’ll likely be standard oil given how things are playing out. But they are not now. They would rightfully complain they’re being punished for future behavior that they may not do, and there may very well be a large competitor that springs up along the way. The market is too new and the government doesn’t generally interfere in market dynamics in nascent markets; and they definitely don’t punish you for something that might happen in the future. It’s not minority report - you actually have to commit a crime to be legally culpable for committing a crime. * there are lots of laws about pricing. But in a competitive market companies are allowed to loss lead. But to your point there a lot of ways that can happen that’s structurally unfair. Using one monopoly to predate in another market is potentially illegal. Competing on price in multiple competitive markets is not. And it shouldn’t be, because that’s almost always how companies break into new markets and gain market share against established competitors. I’d note regardless in this situation I will wager they do have an enormous cost advantage over everyone without loss leading. They have a scaled industrialized operation that generates revenues. No one else does.
      - vlovich123 3y ago
        > Many companies enter new segments by loss leading taking profits from their established non-monopoly business to subsidize their growth in another segment. That’s not illegal in the least and is extremely wide spread Again, you’re arguing that something is legal when I’m saying the law should be changed. There’s no economically beneficial reason to allow anyone to loss lead by taking profits from one space and using it to capture market share in another, regardless whether you’re a monopoly to start with or not. That’s literally one of the well established mechanisms for a monopoly to start with. And once they get entrenched, they repeat that pattern to protect themselves from competitors, lowering the price until new entrants leave. There’s cases where loss leaders I’m more OK with, but that’s usually around when you’re selling multiple “fungible” items and you have a loss leader on one to drive traffic & it’s not the manufacturer of the item giving you a deal to make it a loss leader. Think grocery chains, outlets, etc. > you can’t proactively take someone for violating a law in the future to court No where did I propose this. All I suggested is that there’s enforced regulations to make sure that Tesla is behaving here in a way that won’t result in needing an anti trust case in the future. Microsoft’s anti trust lawsuit went nowhere. Sure it’s not as entrentched, but if they hadn’t built their monopoly position in the first place & stuffed their coffers, they wouldn’t have been able to survive the massively bad decisions they kept making for a decade or more. You seem to be taking on faith here that this is purely because Tesla has leveraged vertical integration to get a 5x savings cost. I’m skeptical though - if that were the case they wouldn’t need to be going after government bids for charger networks in the first place & could undercut on price. There’s just no way vertical integration in the car manufacturing space is yielding such impressive dividends in the charge manufacturing / operating space.
- wilg 3y ago
  I mean they’re selling superchargers to BP to operate and opening up the charging standard and putting other chargers into their car navigation.
- m3kw9 3y ago
  The entire point of companies is to become as close to monopoly as possible legally.
- cyberax 3y ago
  > Is Tesla leveraging their market cap and cash reserves to capture a monopoly position on chargers? No. They are simply the only company that takes charging seriously. I was helping to go through DCFC manufacturers' bids in 2021, and most of them had a "large sunlight-readable screen" listed as a fucking advantage. Because you can use it to show freaking ads or "branding". Because that's certainly what I want to do: stare at even more ads as the charger does the slllllooooowwww negotiation process.
balls187 3y ago
> what is the reasoning…? The CEO of the company is unhinged.
- dylan604 3y ago
  This would be a very large concern I would have about trying to enter into any kind of an agreement with him specifically, but it is a criteria considered by pretty much everyone. Will this person or anyone in leadership be a problem later? It has an effect on decisions when making long term contracts.
LeafItAlone 3y ago
This was in 2022 and at least the common Superchargers deployed now don’t accept credit card payments and only recently were opened up to other manufacturers. A municipality could choose another manufacturer that supports more vehicle models.

This feels like the start of a lawsuit. If Tesla is state of the art and requires 5x less funding per charger than competition; what is the reasoning behind picking the competitors?

vlovich123 3y ago

Why a lawsuit? Here’s a better question. Is Tesla leveraging their market cap and cash reserves to capture a monopoly position on chargers? I’d want to make sure that market competitiveness is a thing. Otherwise you have a company that turns its behavior on all fronts into rent seeking.

fnordpiglet 3y ago
I don’t doubt their efficiency and scale effects stack up to an enormous advantage. Absolutely their ability to finance impacts the unit costs of chargers very few if any other company could match. However: * being extraordinarily well positioned to compete isn’t a crime or legally anticompetitive. It might be if they had a non competitive market monopoly in another market they’re leveraging in this market. But they don’t. * lose leading isn’t illegal or sanctionable unless it fits fairly narrow constraints in antitrust law * probably most importantly they have the only proven ability to deliver a critical national infrastructure to meet national energy, environmental, and security goals. They will be afforded remarkable leeway for some time. * they’re actually weakening their grip on the EV market by opening the charger adapter spec and licensing access to competitors. If the supercharger network were plausibly their money maker eyes might squint. But it’s not. It’s an enablement to the entire industry, including their competitors. And it’s not reasonable to say the EV market lacks competitors. That doesn’t mean this won’t change in the future. But I fully expect a Standard Oil world where EV charging is owned by Tesla. Then, legal market remedies would be squarely on the table.
- vlovich123 3y ago
  > being extraordinarily well positioned to compete isn’t a crime or legally anticompetitive Actually, using profits in one sector to dominate a second is pretty classical monopolist behavior. I’m fine with competition but if the bid is insincere because they’re not going to do the work for that number - the winner typically pays what the 2nd bidder bid typically in such contracts - or because it’s to capture a monopoly position and recoup the rest of the investment through rent seeking over the long term, these are negative behaviors we should discourage through various means. > And it’s not reasonable to say the EV market lacks competitors. That was true of the internet too. Yet somehow we ended up with a handful of major tech companies. > But I fully expect a Standard Oil world where EV charging is owned by Tesla. Then, legal market remedies would be squarely on the table. Wait. So you agree this strategy that Tesla is employing is likely to cause a problem in the future but your position is to remedy it in the future after it’s obviously an even bigger problem with jobs tied to it making it more politically risky, the legal and political climate being a joke on antitrust at the moment? Also the rest of what you wrote is basically “there’s no law against it”. I’m saying there should be laws against predatory pricing and simple ones like your penalty is paying a fine which is based on what a fair price would have been and how much you’ve cost the economy through that behavior which government regulators and academic economists get to determine independently (& pick the highest price). You don’t need to do this for all companies - just ones who have enough cash flow that such behaviors are possible in the first place (a startup that’s not turning over a billion or so per quarter has a hard time pulling this kind of shit). Oh and treat fundraising like revenue a bit in that it counts towards you being regulated (eg if you’re market cap in a private market is >1B you can’t have any loss leading products).
  - fnordpiglet 3y ago
    * You have to have a monopoly in the other sector for it run afoul. Many companies enter new segments by loss leading taking profits from their established non-monopoly business to subsidize their growth in another segment. That’s not illegal in the least and is extremely wide spread. In fact the opposite in this situation is true. The EV market is extremely competitive but the supercharger market is dominated by Tesla. The fact they’re opening it up for use by competitors in EV means they’re not leveraging their supercharger hegemony to kill off EV competitors. * “the internet” isn’t a single market segment. There are a lot of monopolies though, and I would point you to the ongoing antitrust lawsuits. * you can’t proactively take someone for violating a law in the future to court. Yes they’ll likely be standard oil given how things are playing out. But they are not now. They would rightfully complain they’re being punished for future behavior that they may not do, and there may very well be a large competitor that springs up along the way. The market is too new and the government doesn’t generally interfere in market dynamics in nascent markets; and they definitely don’t punish you for something that might happen in the future. It’s not minority report - you actually have to commit a crime to be legally culpable for committing a crime. * there are lots of laws about pricing. But in a competitive market companies are allowed to loss lead. But to your point there a lot of ways that can happen that’s structurally unfair. Using one monopoly to predate in another market is potentially illegal. Competing on price in multiple competitive markets is not. And it shouldn’t be, because that’s almost always how companies break into new markets and gain market share against established competitors. I’d note regardless in this situation I will wager they do have an enormous cost advantage over everyone without loss leading. They have a scaled industrialized operation that generates revenues. No one else does.
    - vlovich123 3y ago
      > Many companies enter new segments by loss leading taking profits from their established non-monopoly business to subsidize their growth in another segment. That’s not illegal in the least and is extremely wide spread Again, you’re arguing that something is legal when I’m saying the law should be changed. There’s no economically beneficial reason to allow anyone to loss lead by taking profits from one space and using it to capture market share in another, regardless whether you’re a monopoly to start with or not. That’s literally one of the well established mechanisms for a monopoly to start with. And once they get entrenched, they repeat that pattern to protect themselves from competitors, lowering the price until new entrants leave. There’s cases where loss leaders I’m more OK with, but that’s usually around when you’re selling multiple “fungible” items and you have a loss leader on one to drive traffic & it’s not the manufacturer of the item giving you a deal to make it a loss leader. Think grocery chains, outlets, etc. > you can’t proactively take someone for violating a law in the future to court No where did I propose this. All I suggested is that there’s enforced regulations to make sure that Tesla is behaving here in a way that won’t result in needing an anti trust case in the future. Microsoft’s anti trust lawsuit went nowhere. Sure it’s not as entrentched, but if they hadn’t built their monopoly position in the first place & stuffed their coffers, they wouldn’t have been able to survive the massively bad decisions they kept making for a decade or more. You seem to be taking on faith here that this is purely because Tesla has leveraged vertical integration to get a 5x savings cost. I’m skeptical though - if that were the case they wouldn’t need to be going after government bids for charger networks in the first place & could undercut on price. There’s just no way vertical integration in the car manufacturing space is yielding such impressive dividends in the charge manufacturing / operating space.
wilg 3y ago
I mean they’re selling superchargers to BP to operate and opening up the charging standard and putting other chargers into their car navigation.
m3kw9 3y ago
The entire point of companies is to become as close to monopoly as possible legally.
cyberax 3y ago
> Is Tesla leveraging their market cap and cash reserves to capture a monopoly position on chargers? No. They are simply the only company that takes charging seriously. I was helping to go through DCFC manufacturers' bids in 2021, and most of them had a "large sunlight-readable screen" listed as a fucking advantage. Because you can use it to show freaking ads or "branding". Because that's certainly what I want to do: stare at even more ads as the charger does the slllllooooowwww negotiation process.

balls187 3y ago

> what is the reasoning…? The CEO of the company is unhinged.

dylan604 3y ago
This would be a very large concern I would have about trying to enter into any kind of an agreement with him specifically, but it is a criteria considered by pretty much everyone. Will this person or anyone in leadership be a problem later? It has an effect on decisions when making long term contracts.

LeafItAlone 3y ago

This was in 2022 and at least the common Superchargers deployed now don’t accept credit card payments and only recently were opened up to other manufacturers. A municipality could choose another manufacturer that supports more vehicle models.