The bear thesis for Tesla has been something like, "Tesla might have an innovative EV-first design, but when the major manufacturers with a century of manufacturing know-how wake up to EVs, they will drown Tesla in vehicles."

I think part of what's driving the increase in Tesla's value is the realization that this thesis was wrong.

Tesla is now beating all the established manufacturers at gross automotive margins, and it's really not close. Toyota is around 18%, Ford and GM around 15%. Tesla is up at 27%.

Part of that might be demand-driven higher prices. But Tesla continues to reduce their cost of goods, and Tesla has emerged as the most innovative manufacturer, which we already see in teardowns of the Model Y, with huge sections cast as one piece, but particularly in the design of Cybertruck, and Gigafactory.

Tesla is far out in the lead on software. They appear to be rapidly improving on manufacturing. Tesla has paid down its debt with stock issuances, the company has $16 billion cash on hand, and the ability to go get a lot more nearly for free.

If the major manufacturers aren't going to catch Tesla with manufacturing prowess, or capital, what are they going to catch them with?

The major manufacturers still might catch up - once they really start caring. I agree with the posters elsewhere in the thread that predict the fossil fuel industries will collapse rapidly, rather than gradually - and the way I see it, major car manufacturers are still mostly trying to extract as much value now as possible from the ICE market.

But once the floor falls off? They won't go gentle into that good night. I expect a wave of bailouts, consolidation and rapid retooling (and playing every dirty trick in the MBA book there is). I wouldn't discount the possibility that some of the survivors will have enough infrastructure and engineering competence remaining to quickly become a serious competitor for Tesla. In parallel, Tesla itself may fall prey to one of many ways companies decay over time. And then, of course, there's China.

But all in all, as long as Tesla's current performance pushes EVs over the threshold of market acceptability (which I believe it did a few years ago) and gives it some serious momentum, it's "mission fucking accomplished", regardless of who's the market leader in 10 or 20 years.

The new all electrics from all the big auto companies are pretty good. As long as they do well enough to keep producing them, it will be incremental improvement year after year. I think Tesla has a good lead, but there is not going to be much value difference in a car that can go 600 miles on a single charge vs 300 miles. Or 0-60 even faster than 2.5 seconds. Once the big makers get within spitting distance of a Tesla EV (and I think they already are there). They will be able to really start eating into that market as their ICE market starts to fade.

Yeah I sometimes think the rhetoric doesn't map onto reality:

https://www.auto123.com/en/news/best-selling-electric-cars-w...

https://www.torquenews.com/1083/these-evs-declined-sales-ame...

Tesla clearly deserves a lot of credit but I think the EV space is a lot more fluid than some Tesla proponents would have you believe.

As EV adoption increases into more markets, buyers are going to be more price conscious, and plenty of makers (most of the big companies?) already have a foot in this space. Add missteps with safety or reliability in the long term (see: defrauding the Dutch government and the public about safety) and I think things might change quickly. Tesla isn't going anywhere but the idea that Tesla is the future EV market seems dishonest, naive, or both.

It's only a start for them when they'll start caring. Arguably, Volkswagen has been caring for a few years and they are just starting to produce decent EVs, somewhat comparable to Tesla.

It took VW so long because they developed a platform rather than individual cars for their dozen brands.

> If the major manufacturers aren't going to catch Tesla with manufacturing prowess, or capital, what are they going to catch them with?

Brand loyalty or aspiration that predates EVs; cheaper entry price (already happening); build quality; better UI (the giant touchscreen is a negative for a lot of people).

There are lots of reasons to buy a non-Tesla EV. I know people who, being told that the Mach-E wasn't going to be available for a while bought another ICE to drive until it was ready. I know people who bought Hyundais instead of Teslas. Heck, one person even opted for a plugin hybrid because only the Tesla had the range he needed for work and he didn't want one.

A good chunk of people I know are already opting for not-Tesla EVs. It's a brand that seems popular with a subset of the population, but doesn't have the widespread love that people on HN seem to assume.

I also think it's weird that people are comparing margins on ICE vs EV cars. Obviously, those will different. You want to focus on their margins in the EV space.

Further to this, Ford are only able/planning to make 80,000 electric F-150 pickups in 2024.

So clearly the major manufacturers are not going to beat them on sheer volume either.

It would be interesting to revisit these numbers after including warranty claims. Toyota is someone that puts big emphasis on that part, so the difference when looking at something like a 3yr ownership might be a lot smaller, if not maybe even in Toyota's favor.

OTOH everybody is in a bit of an uncharted territory with the EVs and SW heavy cars. VW's new Golf has been riddled with SW bugs, and their EV line has not avoided it as well. But the body panels, interior materials... And Tesla (Musk) has said they need to improve the build quality and lower warranty claims.

So like I said- would be interesting to revisit these numbers, maybe not now, but in a year...

What about China? They really want to win that race, is there a reason they wont be a serious competitor?

China's internal EV market is enormous, and by any reasonable metric Chinese manufacturers are already "winning that race". Several major cities have fully electrified their bus and taxi fleets for example, and most of those vehicles are made by BYD Auto, which was delivering more cars per year in 2012 than Tesla does now. But there's plenty of EV market to go around, both in China and elsewhere. BYD doesn't currently ship private cars outside China, only taxis and commercial vehicles like vans, buses, delivery vehicles, utility service vehicles, but this can change rapidly. The main reason this isn't currently happening is that they don't want to deal with consumer support outside their core market, and are more comfortable with institutional customers. However, I don't see it as a race. The main thing holding back EVs in both the Chinese and non-Chinese markets is infrastructure and obstructionism by fossil interests. I see that changing quicker in China than in the West (but I still have hope) so it's more likely Chinese EV manufacturers will expand more in China than internationally, until they see a more valuable market. Tesla is much more aggressively expanding in the West, and building out their own infrastructure to do so, and are the primary focus of the hate by western fossil interests.

If and when the landscape on the western markets changes to be regulatorily more favorable and provide sufficient charging infrastructure, I fully expect Chinese manufacturers to entirely own the lower half of that market, because even the cheapest Tesla can produce is way way more expensive than your average petrol car, whereas Chinese-made EVs are competitive with petrol on the Chinese market already now, and prices keep dropping. A new BYD e2 with extended (253 mile) battery sells for the equivalent of $25k. The Tesla model 3 sells for twice that on the same market. On the lower end, with smaller batteries, you have cars like the Levdeo i3 with 100 mile range which sells for the equivalent of $10k, and the phenomenally cute Wuling Hongguang Mini EV (75 mile range) which sells for the equivalent of $5k. Tesla still owns the luxury EV market everywhere, including in China, but there's simply nothing they offer in those price ranges, and that's where the big volumes are going to be in the future as infrastructure catches up. Still, because luxury cars have higher profit margins, I can see Tesla surviving and holding a large part of that segment.

There's also a huge market for EVs in the global South, where infrastructure is currently abysmal but there is extreme sensitivity to fuel prices. The market there can move very rapidly in response to even minor infrastructure improvements, and small cheap EVs would be the primary seller in those markets. Tesla has no chance there, but the Chinese EV vendors do.

If there's anyone losing the "race" it's traditional Western and Japanese car vendors. They fucked up time after time, and are the tail-end of the current EV industry. I don't see a path where they get their shit together fast enough to not be overrun by Tesla and a bunch of Chinese EV vendors, so they can only win by creating regulatory roadblocks.

It’s not really fair to be comparing Chinese domestic market EVs to US market EVs on price and range alone.

We can compare price and range alone among US market vehicles because they all meet relatively high standards of quality, performance, and regulatory compliance. Developing nations have buyers and regulators willing to accept lower standards in exchange for accessibility, but the US market doesn’t.

BYD isn’t absent from the US market for any reason other than that they have chosen not to, because they’ve determined they wouldn’t be able to compete in that market.

I wonder how much of the margin is made up of the $10,000 FSD option?

Very little. First of all, a lot of cars are sold without this option, but most importantly, a large part the money isn't recognized as revenue yet, as the FSD isn't ready yet. A part of it is recognized due features like "summon" and "navigate on autopilot". But the large part of that money is still unrecognized revenue. There will be a boost to the revenue, when they can recognize the remaining part of the FSD payments in the future, but this will be a one-time effect.

This is interesting. You're claiming that the FSD money they collect isn't recognized yet? Can I ask you what leads to you thinking that? I'm sure it's in one of their financial disclosures, but you may be able to narrow it down for me.

There were statements made when they recognized parts of the FSD money.

I'm sure they were. I don't disbelieve you. I just don't quite get what to search for (or where) to find out how that policy works and what percentage of income they've already recognized.

Here is one link I found: https://www.tesmanian.com/blogs/tesmanian-blog/tesla-autopil...

The take rate was somewhat recently estimated at 11%.

This line of reasoning reminds me the time when Android came out and people were predicting the imminent death of then-newborn iOS. Tesla is Apple of car manufacturing. That much is pretty obvious if you drive one of their cars. They seemingly deliberately depart from what everyone else is doing. And my bet would be that they'll continue to do so, and continue building out technological capabilities that no other manufacturer would even be able to imagine, let alone build, such as e.g. their own AI training silicon, new battery tech, material science stuff, deeper automation of manufacturing, etc, etc.

That said, I don't understand their stock price either, even in the light of all that, so I don't own any of their stock.

But my next car will be a Cybertruck. Once you go electric there's really no going back. And that's how it ought to be in general: green options _must_ be better all around (perhaps with the exception of price, though I'm sure price differential will go down over time), not a fucking "tofurky" style garbage that no one would buy if it wasn't "green". Because you can make people tolerate things "for the greater good", but you can't make them like things that suck, at least not for long.

> Tesla is Apple of car manufacturing.

Can you explain what on earth that means? Apple makes good use of their device ecosystem, purchased app lockin and network effects to maintain an excellent position. Tesla has none of those benefits, other than their US (not EU etc. which is required to be open) supercharger network (which they promised to open to all EVs).

When I read your post (e.g. it's obvious as soon as you drive one, once you go electric you never go back) and both of those sound like arguments for EVs, not Tesla. Tesla may have made those two synonymous for a while, but I cannot believe it will last.

I will ask, are their departures from traditional manufacturing good? Even people I know with a Tesla that mostly has sat in a garage for its life (no need to commute during WFH because of COVID) say it's already showing extreme wear.

It means they bet on vertical integration, and they make product decisions no other manufacturer has the balls to make, and win because of it. Observe how _nobody_ can make a laptop that's better than MBP in spite of having several _decades_ to observe what Apple does. The same is the case here. Tesla has insurmountable avantage in this regard simply because they are not a "traditional" car manufacturer and have no "legacy" they have to maintain.

But the best explanation is to just go to a Tesla dealership and take one of their cars for a spin. It _feels_ like iPhone.

> Observe how _nobody_ can make a laptop that's better than MBP in spite of having several _decades_ to observe what Apple does.

I have noticed it in few other industries, I just find it amazing that some companies just dont want to change when you can clearly see that your competitor has a better product.

Norway is the most mature EV market in the world and it's not clear from the sales statistics that Tesla is winning. They sell a lot of vehicles, but not the most (might be winning in profits though).

Isn’t this due to supply constraints, at least in part? There simply are not enough teslas available to meet current demand, so they end up buying other brands to avoid waiting a few months.

Isn't it applied for most EVs?

On the other hand, if you want the EV revolution for its own sake, investing in Tesla as a generator of hype can make instrumental sense.

I mean, if "Make the richest man on earth richer, so a few more news stories will be written about him, because that might lead people to look into EVs" is how you want to spend your hard-earned dollars, I'm not going to stop you. I'd suggest there are far more efficient ways to bring about social change, both in terms of fewer negative side effects and more bang for your buck.

I mean, phrasing aside, it seems to be working?

Recommend some of those better ways to promote EV?