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"Compared with larger, more established automakers, the company is less likely “to successfully adapt to competitive and technological displacement risks over t

by bobbles 12y ago

"Compared with larger, more established automakers, the company is less likely “to successfully adapt to competitive and technological displacement risks over the medium to long term,” they said." ...hilarious

threeseed 12y ago
What's hilarious about it ? They are right. The big auto companies definitely aren't as nimble in adapting to technological change but that's because they are operating on a completely different scale. Tesla would be no different if was actually selling in more than a handful of countries. Companies like Toyota have the money, clout and scale in which to absorb any risks and change in the future. Tesla doesn't.
- kristopolous 12y ago
  Can't you definitively say this about any smaller player compared to their larger counterparts in any market whatsoever? I think there must be something more than the inherent and apparent structural reality of big fish/little fish.
  - zdean 12y ago
    I agree that they should provide context to that statement...but I also think that they should allow for the possibility of the opposite. Tesla isn't strapped down by legacy costs, processes, and contracts that larger/older manufacturers are. This, I would think, would provide them with the benefit of moving faster in a rapidly evolving marketplace.
    - threeseed 12y ago
      Except that it isn't a rapidly evolving marketplace. People don't upgrade to a new car every year so Tesla's quicker ability to adapt is somewhat meaningless.
- victoro 12y ago
  I think the parent was commenting on the irony of this statement considering that the big US automakers were recently recipients of a large government bailout precisely because they couldn't "successfully adapt to competitive and technological displacement risks over the medium to long term".
  - mikeash 12y ago
    That's not irony, that's a big reason for giving the big US automakers a better credit rating than Tesla. If Tesla finds itself in dire financial straits, they'll be wrapped up and shut down. If GM finds itself in dire financial straits (again), they'll be bailed out (again) or merge, or something. They won't go away. Which one is more likely to pay back your bond? The one with a virtual guarantee from the government that they'll stay in business, or the tiny startup with a bright future?
    - arjunnarayan 12y ago
      When GM was bailed out, they declared bankruptcy. That means bondholders got close to nothing.
    - scott_karana 12y ago
      I'm sure you're right about Tesla being left to wither, where big auto would be bailed out again, but that doesn't address this at all: > competitive and technological displacement risks
    - thetrb 12y ago
      Both GM and Chrysler went through bankruptcy in 2009.
    - justin66 12y ago
      > If Tesla finds itself in dire financial straits, they'll be wrapped up and shut down. If GM finds itself in dire financial straits (again), they'll be bailed out (again) or merge, or something. They won't go away. > Which one is more likely to pay back your bond? The one with a virtual guarantee from the government that they'll stay in business, or the tiny startup with a bright future? There's something I'm pretty sure you don't know. During the last bankruptcy and government bailout, GM bondholders got decimated to the tune of tens of billions (!) of dollars. If hey, there might be another bailout! is the thinking behind the credit rating, it ought not raise the rating.
- enraged_camel 12y ago
  >Companies like Toyota have the money, clout and scale in which to absorb any risks and change in the future. Yep. They also have the government's backing, so if they fuck up in terrible ways and start to go under, the government will just bail them out with taxpayer money. Tesla doesn't have that sort of safety net. On the other hand, one can argue that this is actually a competitive advantage for Tesla. They basically have no choice but to succeed. There are no well-greased politicians to come to the rescue if they fail.
- Igglyboo 12y ago
  I'd have to agree. If you look at Tesla's revenue and compare it to this http://en.wikipedia.org/wiki/Largest_automotive_companies_by_revenue http://en.wikipedia.org/wiki/Largest_automotive_companies_by... You'll see that even the smallest on that list(BMW) has more than 50 times the revenue that Tesla has.

by bobbles 12y ago

threeseed 12y ago

What's hilarious about it ? They are right. The big auto companies definitely aren't as nimble in adapting to technological change but that's because they are operating on a completely different scale. Tesla would be no different if was actually selling in more than a handful of countries. Companies like Toyota have the money, clout and scale in which to absorb any risks and change in the future. Tesla doesn't.

kristopolous 12y ago
Can't you definitively say this about any smaller player compared to their larger counterparts in any market whatsoever? I think there must be something more than the inherent and apparent structural reality of big fish/little fish.
- zdean 12y ago
  I agree that they should provide context to that statement...but I also think that they should allow for the possibility of the opposite. Tesla isn't strapped down by legacy costs, processes, and contracts that larger/older manufacturers are. This, I would think, would provide them with the benefit of moving faster in a rapidly evolving marketplace.
  - threeseed 12y ago
    Except that it isn't a rapidly evolving marketplace. People don't upgrade to a new car every year so Tesla's quicker ability to adapt is somewhat meaningless.
victoro 12y ago
I think the parent was commenting on the irony of this statement considering that the big US automakers were recently recipients of a large government bailout precisely because they couldn't "successfully adapt to competitive and technological displacement risks over the medium to long term".
- mikeash 12y ago
  That's not irony, that's a big reason for giving the big US automakers a better credit rating than Tesla. If Tesla finds itself in dire financial straits, they'll be wrapped up and shut down. If GM finds itself in dire financial straits (again), they'll be bailed out (again) or merge, or something. They won't go away. Which one is more likely to pay back your bond? The one with a virtual guarantee from the government that they'll stay in business, or the tiny startup with a bright future?
  - arjunnarayan 12y ago
    When GM was bailed out, they declared bankruptcy. That means bondholders got close to nothing.
  - scott_karana 12y ago
    I'm sure you're right about Tesla being left to wither, where big auto would be bailed out again, but that doesn't address this at all: > competitive and technological displacement risks
  - thetrb 12y ago
    Both GM and Chrysler went through bankruptcy in 2009.
  - justin66 12y ago
    > If Tesla finds itself in dire financial straits, they'll be wrapped up and shut down. If GM finds itself in dire financial straits (again), they'll be bailed out (again) or merge, or something. They won't go away. > Which one is more likely to pay back your bond? The one with a virtual guarantee from the government that they'll stay in business, or the tiny startup with a bright future? There's something I'm pretty sure you don't know. During the last bankruptcy and government bailout, GM bondholders got decimated to the tune of tens of billions (!) of dollars. If hey, there might be another bailout! is the thinking behind the credit rating, it ought not raise the rating.
enraged_camel 12y ago
>Companies like Toyota have the money, clout and scale in which to absorb any risks and change in the future. Yep. They also have the government's backing, so if they fuck up in terrible ways and start to go under, the government will just bail them out with taxpayer money. Tesla doesn't have that sort of safety net. On the other hand, one can argue that this is actually a competitive advantage for Tesla. They basically have no choice but to succeed. There are no well-greased politicians to come to the rescue if they fail.
Igglyboo 12y ago
I'd have to agree. If you look at Tesla's revenue and compare it to this http://en.wikipedia.org/wiki/Largest_automotive_companies_by_revenue http://en.wikipedia.org/wiki/Largest_automotive_companies_by... You'll see that even the smallest on that list(BMW) has more than 50 times the revenue that Tesla has.