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Just this morning I watched another Tesla bear trot out the "competition is coming" argument. His argument, "During seventeen years Tesla had no competition but now real car makers have come out with real cars that will eat Tesla's lunch." That's one way of looking at it but why did these real car makers not make EVs before? Why are they doing so now?

From my point of view this competition is good news. It's proof that EV technology has crossed the chasm and there is no turning back. This competition validates Tesla! Even if you buy this argument it still does not address the bear argument entirely.

Tesla is said to be capacity constrained and battery cells are a critical component. Tesla pioneered the use of lithium cells in EVs and early on recognized the supply bottleneck which led to the construction of Giga Nevada. By 2021 Tesla will be making their new 4680 cells in various locations. Tesla has become the largest battery maker. Other car makers will be competing in the market for batteries. If we take into account market forces, this is what I see. Tesla is bringing down the cost of batteries by around 50% which allows them to make more affordable cars. To the contrary, the competition will be bidding up the price of batteries they must purchase. The larger car makers can start making batteries in house but the smaller players will be priced out of the market.

I'm not saying it's a slam dunk. I'm saying the bear argument is weak because it's based on shallow thinking.

Denny Schlesinger
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...and weak because it's so obviously coming from the big shorters who are trying to recoup their huge losses from the big positions they got their clocks cleaned on. All of those arguments have been being pushed for years.

When a major car maker actually releases a vehicle that actually competes with Tesla in features and driving feel and quality and price AND wider chargeability is created, that will be the time to worry about competition. It took 40 years after the initial growth stage of the automobile and a strategic cold war initiative by the federal government to get a national interstate highway system built. In the meantime, a lot of car makers and parts makers made a lot of money.

While I'm not saying it'll be 50 years before Tesla's end as a going concern, the explosion of EVs is not quite imminent yet - there's more than a little agenda-driven opining going on.
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Tesla has become the largest battery maker.

Tesla is probably the largest automotive battery pack maker. And they were innovators for partnering with Panasonic to build the initial GigaFactory to reduce the battery cell bottleneck and to innovate with the larger 2170 cells.

But Panasonic is the cell manufacturer at GigaFactory 1, not Tesla. Tesla is a very, very minor player when it comes to directly manufacturing battery cells to this point in history, limited to some pilot production of the 4680, I think. We'll have to see how it plays out in the future whether they become a leading manufacturer.

I was impressed with the roadmap they laid out on Battery Day.
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Well, while one needs to recognize Panasonic's role, it isn't as if the production from GigaFactory 1 is going to the open market. It is captive to Tesla. Whereas, at this point, other manufacturers need to source from the open market or develop their own captive feeds.
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