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The autopilot part of Tesla has never made much sense. Is Tesla the electric car company, or is it the luxury car company? Either way, why does the power train

The autopilot part of Tesla has never made much sense. Is Tesla the electric car company, or is it the luxury car company? Either way, why does the power train (EV or ICE) come into play at all? Not only that, but Tesla has played the Innovator's Dilemma game from the position of the upstart financially, but targeted the segment of the market that incumbents will defend to the death (luxury cars). Tesla could have gone a different way and played the game from the true upstart: targeting the low end of the car market. Attack from below. But it didn't do that. Incumbents always win at the sustaining innovation game. The electric power train is a sustaining innovation for the automobile industry. It doesn't break any incumbent's business model (financing the purchase of expensive cars), especially at this point. And we're now seeing this with all of the EV introductions and announcements from incumbents. Oddly, though, there are plenty of upstarts trying to do exactly what Tesla tried - attacking the blubber-rich end of the market with an immature technology.

qaq 4y ago
And yet Tesla is dominant player in luxury segments they have products in
- hedora 4y ago
  Analysts suggest that, while they may still be the market leader in EVs, by 2025 they're looking at a decline from today's 70-75% market share to 11-20%: https://www.forbes.com/sites/neilwinton/2022/07/11/ev-makers-are-gaining-ground-on-tesla-as-china-threat-looms/?sh=1e3347be6ec0 https://www.forbes.com/sites/neilwinton/2022/07/11/ev-makers... This meshes pretty well with them not having anything in the compact, pickup truck, offroading/camping segments (luxury, or not). They also don't have any commercial vehicles like delivery vans. All of those segments are being filled in rapidly by competitors. Also, the first real non-Tesla luxury sedans have been on the market for what, under a year?
  - deleted 4y ago
    [deleted]
  - giantrobot 4y ago
    Fleet sales is a place I see demand seriously ticking up for BEVs. Even modulo today's price gouging on gas, gas prices are only going to increase over time and many countries/states are increasing emission regulations. In California at least there's a significant percentage of fleet vehicles that are HEVs or low emission ICEs like CNG. Fleet edition BEVs will sell like gangbusters here (if they're not already). I don't see Tesla really able to target the fleet vehicle market. They're currently geared entirely for consumer sales and then only up market consumer sales. Fleet sales aren't flashy or exciting but they're reliable income generators for car companies.
  - sumnuyungi 4y ago
    Because analysts have always been so accurate forecasting Tesla...
coenhyde 4y ago
The incumbents will defend that market segment to their death indeed. Tesla is pulling a 30% gross margin on their EV's, while legacy auto looses money on their EV's. I don't see legacy auto being capable of refactoring their cars, manufacturing processes and business models fast enough to survive. The fall can cascade quickly, as the incumbents are stuffed with debt. When sales of ICE fall due to the growing EV segment they will have a hard time seeking the funding necessary to transition. IMO it's all a bit late. But good luck to them. From my observation only Ford and VW really appreciate the situation they are in, and they are trying hard to navigate out. Hopefully they survive. GM is screwed.
- caf 4y ago
  Hyundai belongs in that group as well.
- dahdum 4y ago
  > I don't see legacy auto being capable of refactoring their cars, manufacturing processes and business models fast enough to survive. My take is the opposite. Incumbents already have like 90% of what Tesla had or chose to build from scratch. EV's are not complicated at all compared to ICE, and incumbents have been refining their manufacturing process for decades in a brutally competitive industry. Unless Tesla can somehow get an effective monopoly on battery tech or FSD, which they are not, they're going to be just another car company. Nothing they can deliver can't be done by others. Personally I think it's way more likely Waymo or Apple deliver FSD first, with broad industry partnerships wiping out Tesla's advantage.
  - coenhyde 4y ago
    I agree that the EV tech stack is easy. EV retro fits illustrate how simple EV's are. But that's not the part that matters. What matters is if you can make an outsized profit building and selling EV's. Legacy auto can't, Tesla can. Tesla is very vertically integrated so they can eek out extra margin that others can't. They also aren't inhibited by the existing dealer / service / financing model. So what I'm saying is if legacy auto wants to compete with Tesla, they have to refactor their entire business. And i don't see that happening. It will be interesting to see who is right in 5-10 years.
jacobjr23 4y ago
I feel like this was a pretty popular position to take in 2017-2018, but it sure has aged like milk.

qaq 4y ago

And yet Tesla is dominant player in luxury segments they have products in

hedora 4y ago
Analysts suggest that, while they may still be the market leader in EVs, by 2025 they're looking at a decline from today's 70-75% market share to 11-20%: https://www.forbes.com/sites/neilwinton/2022/07/11/ev-makers-are-gaining-ground-on-tesla-as-china-threat-looms/?sh=1e3347be6ec0 https://www.forbes.com/sites/neilwinton/2022/07/11/ev-makers... This meshes pretty well with them not having anything in the compact, pickup truck, offroading/camping segments (luxury, or not). They also don't have any commercial vehicles like delivery vans. All of those segments are being filled in rapidly by competitors. Also, the first real non-Tesla luxury sedans have been on the market for what, under a year?
- deleted 4y ago
  [deleted]
- giantrobot 4y ago
  Fleet sales is a place I see demand seriously ticking up for BEVs. Even modulo today's price gouging on gas, gas prices are only going to increase over time and many countries/states are increasing emission regulations. In California at least there's a significant percentage of fleet vehicles that are HEVs or low emission ICEs like CNG. Fleet edition BEVs will sell like gangbusters here (if they're not already). I don't see Tesla really able to target the fleet vehicle market. They're currently geared entirely for consumer sales and then only up market consumer sales. Fleet sales aren't flashy or exciting but they're reliable income generators for car companies.
- sumnuyungi 4y ago
  Because analysts have always been so accurate forecasting Tesla...

coenhyde 4y ago

The incumbents will defend that market segment to their death indeed. Tesla is pulling a 30% gross margin on their EV's, while legacy auto looses money on their EV's. I don't see legacy auto being capable of refactoring their cars, manufacturing processes and business models fast enough to survive. The fall can cascade quickly, as the incumbents are stuffed with debt. When sales of ICE fall due to the growing EV segment they will have a hard time seeking the funding necessary to transition. IMO it's all a bit late. But good luck to them. From my observation only Ford and VW really appreciate the situation they are in, and they are trying hard to navigate out. Hopefully they survive. GM is screwed.

caf 4y ago
Hyundai belongs in that group as well.
dahdum 4y ago
> I don't see legacy auto being capable of refactoring their cars, manufacturing processes and business models fast enough to survive. My take is the opposite. Incumbents already have like 90% of what Tesla had or chose to build from scratch. EV's are not complicated at all compared to ICE, and incumbents have been refining their manufacturing process for decades in a brutally competitive industry. Unless Tesla can somehow get an effective monopoly on battery tech or FSD, which they are not, they're going to be just another car company. Nothing they can deliver can't be done by others. Personally I think it's way more likely Waymo or Apple deliver FSD first, with broad industry partnerships wiping out Tesla's advantage.
- coenhyde 4y ago
  I agree that the EV tech stack is easy. EV retro fits illustrate how simple EV's are. But that's not the part that matters. What matters is if you can make an outsized profit building and selling EV's. Legacy auto can't, Tesla can. Tesla is very vertically integrated so they can eek out extra margin that others can't. They also aren't inhibited by the existing dealer / service / financing model. So what I'm saying is if legacy auto wants to compete with Tesla, they have to refactor their entire business. And i don't see that happening. It will be interesting to see who is right in 5-10 years.

jacobjr23 4y ago

I feel like this was a pretty popular position to take in 2017-2018, but it sure has aged like milk.