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We hear all the time that “the competition is coming” for Tesla, but what challenges are they having to face?
These are the musings of an observer, not an expert.
These are the musings of an observer, not an expert.
1) Profitability.
OEMs can make petrol/diesel cars profitably, this is true. But with the new 4680 cells that Tesla are bringing into production, Musk and Co will be able to make battery packs at roughly half the cost.
OEMs can make petrol/diesel cars profitably, this is true. But with the new 4680 cells that Tesla are bringing into production, Musk and Co will be able to make battery packs at roughly half the cost.
In order to compete on price, OEM EVs will be lower quality. Or they’ll be sold with a very fine profit margin, if not at a loss.
2) Culture.
Mercedes, for example, have shown with their F1 team’s dominance since 2014 that OEMs can innovate and execute. Porsche are proof of this also.
The road car side of their business has not fundamentally changed in decades. They need to bring the mentality across.
Mercedes, for example, have shown with their F1 team’s dominance since 2014 that OEMs can innovate and execute. Porsche are proof of this also.
The road car side of their business has not fundamentally changed in decades. They need to bring the mentality across.
3) Raw Materials.
While OEMs are working out how the hell they’re going to manufacture EVs efficiently and profitably, Tesla is hoovering up natural resources.
OEMs also still use cobalt, which is SO last year.
While OEMs are working out how the hell they’re going to manufacture EVs efficiently and profitably, Tesla is hoovering up natural resources.
OEMs also still use cobalt, which is SO last year.
4) Economies of Scale
As the EV adoption curve goes parabolic in the next few years, fewer petrol and diesel cars will be sold. This means that the cost to produce a “normal” car will increase.
OEMs will be lucky to break even on their EVs. Only the strongest will survive.
As the EV adoption curve goes parabolic in the next few years, fewer petrol and diesel cars will be sold. This means that the cost to produce a “normal” car will increase.
OEMs will be lucky to break even on their EVs. Only the strongest will survive.
5) Autonomy
A significant portion of the population aren’t going to bother buying cars in the not-too-distant future. This is due to the cost savings of using an autonomous taxi network.
If they’re not pushing hard on autonomy now, goodbye.
A significant portion of the population aren’t going to bother buying cars in the not-too-distant future. This is due to the cost savings of using an autonomous taxi network.
If they’re not pushing hard on autonomy now, goodbye.
6) Performance
If they’re using the 2170 cells that Tesla are phasing out, why even bother?
Range and battery life will be better in a Tesla, at a lower cost.
We won’t even get into Plaid...
If they’re using the 2170 cells that Tesla are phasing out, why even bother?
Range and battery life will be better in a Tesla, at a lower cost.
We won’t even get into Plaid...
7) Brand
Tesla and SpaceX are the top rated companies that graduates want to work for.
OEMs will be facing the best talent in the world, with the best environment, and the best technology.
Tesla and SpaceX are the top rated companies that graduates want to work for.
OEMs will be facing the best talent in the world, with the best environment, and the best technology.
8) Elon’s War Chest
They got $20 billion in the bank. Each Terafactory costs around $1-2bn to build.
FSD is nearly complete, with Project Dojo going online this year.
You do the maths.
They got $20 billion in the bank. Each Terafactory costs around $1-2bn to build.
FSD is nearly complete, with Project Dojo going online this year.
You do the maths.
9) Purpose
OEMs want to make profit.
Tesla wants to accelerate the transition to sustainable energy.
Which purpose are people going to work harder for?
OEMs want to make profit.
Tesla wants to accelerate the transition to sustainable energy.
Which purpose are people going to work harder for?
10) Design
Cybertruck. Roadster. Plaid Model S. Semi. ATV.
These are radical design changes from what we’re used to.
Ok, some people say the Model 3 and Y are boring. But have you looked at a new BMW?
Cybertruck. Roadster. Plaid Model S. Semi. ATV.
These are radical design changes from what we’re used to.
Ok, some people say the Model 3 and Y are boring. But have you looked at a new BMW?
Overall, it is possible for OEMs to make a decent fist of this over the next 10 years.
It just would have been easier if they’d started 10 years ago.
It just would have been easier if they’d started 10 years ago.
