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> Tesla has no special sauce that I'm aware of. Manufacturing of both cars and batteries. That's vertical integration. While I think their current overselling

> Tesla has no special sauce that I'm aware of. Manufacturing of both cars and batteries. That's vertical integration. While I think their current overselling of Autopilot is going to be a folly for them, their assistive driving suite alone would be a multi billion dollar business. They have taken on a ton of risk, and they certainly have their problems, but their successes are substantial and are nothing to wave away.

kibwen 3y ago
> Manufacturing of both cars and batteries. That's vertical integration. Tesla is building their own battery packs, but they're still buying the cells from Panasonic, just like everyone else (Apple included) has the option to do.
- TaylorAlexander 3y ago
  Unless I’ve misunderstood something, this is incorrect. According to this October article Tesla has produced 20 million of their own battery cells at their Texas gigafactory: https://electrek.co/2023/10/11/tesla-4680-battery-cell-production-breakthrough/ https://electrek.co/2023/10/11/tesla-4680-battery-cell-produ... And their first gigafactory in Nevada as far as I know has been producing cells for years. I suspect they stopped buying cells from Panasonic years ago.
  - yasuocidal 3y ago
    Tesla has a special deal with panasonic[0], maybe they ""colab"" on the development of the batteries [0]https://www.tesla.com/blog/panasonic-enters-supply-agreement-tesla-motors-supply-automotivegrade-battery-c https://www.tesla.com/blog/panasonic-enters-supply-agreement...
    - TaylorAlexander 3y ago
      Ah I looked for something more current and it seems Panasonic is operating production inside of Tesla's factory: https://www.theverge.com/2019/4/11/18305976/tesla-panasonic-gigafactory-batteries-model-3 https://www.theverge.com/2019/4/11/18305976/tesla-panasonic-...
  - PinguTS 3y ago
    Actually, the Gigafactories are operated by Panasonic on behalf of Tesla. Technically the cell production in the Gigafactory is done by Panasonic and the packs then assembled by Tesla. https://asia.nikkei.com/Business/Automobiles/Panasonic-to-boost-EV-battery-output-at-Tesla-s-Gigafactory-Nevada https://asia.nikkei.com/Business/Automobiles/Panasonic-to-bo...
kelnos 3y ago
I don't see that special sauce as ensuring market dominance. The established players can (and do) source their batteries from third parties, and that seems to work well enough. If that vertical integration translated to a marked, obvious benefit to customers, then I'd agree. But I don't think it does. Certainly your average EV buyer is not going to say "I bought my Tesla because Tesla makes their own batteries". Why would a customer care about that? I certainly wouldn't.
- rpmisms 3y ago
  It translates to price, speed of innovation, and overall quality. Tesla beats everyone at $-per-mile of range, there are no refresh cycles, and the cars, ignoring fit and finish, are phenomenal. Adds up to a serious advantage.
- schiffern 3y ago
  >that seems to work well enough. Not when you look at their margins. Tesla's special sauce is that they can make a profitable, desirable EV at scale. The established players can't ramp their EV programs -- they'd go bankrupt! I wouldn't call that "working well enough." The dinosaurs failed to innovate for decades, while Tesla sat down and did hard engineering.
  - oblio 3y ago
    > Not when you look at their margins. Look at BMWs and Mercedes margins. They're quite comparable with Tesla margins. Let's see Tesla margins once they grow to try to match that insane market valuation that only makes sense if they sell 10+ million cars per year, most of which will have to be cars costing 20k€ per year, not 40k+€ per year.
    - schiffern 3y ago
      >Look at BMWs and Mercedes margins Key words are "at scale." It's easy to be profitable at the high end, but that also comes with a negligible total addressable market. BMW and Mercedes still have all their R&D work ahead of them to advance their high-cost EV technology to catch up with Tesla. BMW/Mercedes also didn't do the engineering legwork (like the other dinos), they just use a slightly different strategy to conceal the deficiency. They chose "make expensive and unpopular EVs" instead of "quietly lose money on EVs." Same shit different shovel! At this point, I doubt they'll even try to catch up on technology. They'll retreat behind "we don't make cheap cars so why lift the cost curve with R&D," meaning they'll never contribute more than a rounding error in the EV transition. It's doubling down on buggy-whips in 1905. It won't be pretty.

kibwen 3y ago

> Manufacturing of both cars and batteries. That's vertical integration. Tesla is building their own battery packs, but they're still buying the cells from Panasonic, just like everyone else (Apple included) has the option to do.

TaylorAlexander 3y ago
Unless I’ve misunderstood something, this is incorrect. According to this October article Tesla has produced 20 million of their own battery cells at their Texas gigafactory: https://electrek.co/2023/10/11/tesla-4680-battery-cell-production-breakthrough/ https://electrek.co/2023/10/11/tesla-4680-battery-cell-produ... And their first gigafactory in Nevada as far as I know has been producing cells for years. I suspect they stopped buying cells from Panasonic years ago.
- yasuocidal 3y ago
  Tesla has a special deal with panasonic[0], maybe they ""colab"" on the development of the batteries [0]https://www.tesla.com/blog/panasonic-enters-supply-agreement-tesla-motors-supply-automotivegrade-battery-c https://www.tesla.com/blog/panasonic-enters-supply-agreement...
  - TaylorAlexander 3y ago
    Ah I looked for something more current and it seems Panasonic is operating production inside of Tesla's factory: https://www.theverge.com/2019/4/11/18305976/tesla-panasonic-gigafactory-batteries-model-3 https://www.theverge.com/2019/4/11/18305976/tesla-panasonic-...
- PinguTS 3y ago
  Actually, the Gigafactories are operated by Panasonic on behalf of Tesla. Technically the cell production in the Gigafactory is done by Panasonic and the packs then assembled by Tesla. https://asia.nikkei.com/Business/Automobiles/Panasonic-to-boost-EV-battery-output-at-Tesla-s-Gigafactory-Nevada https://asia.nikkei.com/Business/Automobiles/Panasonic-to-bo...

kelnos 3y ago

I don't see that special sauce as ensuring market dominance. The established players can (and do) source their batteries from third parties, and that seems to work well enough. If that vertical integration translated to a marked, obvious benefit to customers, then I'd agree. But I don't think it does. Certainly your average EV buyer is not going to say "I bought my Tesla because Tesla makes their own batteries". Why would a customer care about that? I certainly wouldn't.

rpmisms 3y ago
It translates to price, speed of innovation, and overall quality. Tesla beats everyone at $-per-mile of range, there are no refresh cycles, and the cars, ignoring fit and finish, are phenomenal. Adds up to a serious advantage.
schiffern 3y ago
>that seems to work well enough. Not when you look at their margins. Tesla's special sauce is that they can make a profitable, desirable EV at scale. The established players can't ramp their EV programs -- they'd go bankrupt! I wouldn't call that "working well enough." The dinosaurs failed to innovate for decades, while Tesla sat down and did hard engineering.
- oblio 3y ago
  > Not when you look at their margins. Look at BMWs and Mercedes margins. They're quite comparable with Tesla margins. Let's see Tesla margins once they grow to try to match that insane market valuation that only makes sense if they sell 10+ million cars per year, most of which will have to be cars costing 20k€ per year, not 40k+€ per year.
  - schiffern 3y ago
    >Look at BMWs and Mercedes margins Key words are "at scale." It's easy to be profitable at the high end, but that also comes with a negligible total addressable market. BMW and Mercedes still have all their R&D work ahead of them to advance their high-cost EV technology to catch up with Tesla. BMW/Mercedes also didn't do the engineering legwork (like the other dinos), they just use a slightly different strategy to conceal the deficiency. They chose "make expensive and unpopular EVs" instead of "quietly lose money on EVs." Same shit different shovel! At this point, I doubt they'll even try to catch up on technology. They'll retreat behind "we don't make cheap cars so why lift the cost curve with R&D," meaning they'll never contribute more than a rounding error in the EV transition. It's doubling down on buggy-whips in 1905. It won't be pretty.