To be fair, this seemed to be the right strategy since they were able to be profitable in a very crowded market. Yes, the new companies try to verticalize everything from components to software, but none of them seem profitable (marginally Tesla passes the bar, but not so sure if you took away all the subsidies and carbon offsets).

So maybe the legacy guys were right all along?

I can tell you this works if your product doesn’t need frequent upgrades/updates and isn’t cohesive. In legacy auto world, you ask for one line of code change and the supplier slaps 100k bill. This is generally why things look old, outdated, carried over and buggy.

I totally agree with what you say. I am just not sure if the car market is willing to pay a premium to have this nicer fully integrated experience. Maybe there is space for a couple of premium makers.

My preference would be do less! Shift all the nav and entertainment to phone integration; stop trying to make half assed shit versions of those. How many billions were spent on that?

Oh we don’t want Google Amazon and Apple to have the cake and eat it too. See GM Rivian and Tesla not supporting CarPlay and AndroidAuto.

To what extent was a clean sheet design a huge advantage over the legacy makers?

And to what extent were the subsidies an advantage? They phased out after 200,000 units and Tesla has sold millions.

In Q1 2025, Tesla made $595 million on selling environmental credits/carbon offsets to other car makers. Net income for the whole company was $409 million.

Tesla has earned since 2017 over $10B in carbon offsets. That is in addition to the state and federal incentives.

Tesla took the hit for the transportation industry, working their asses off and pioneering the costly ramp up to mass production of EVs, so the subsidies are the government compensating them for having not taken the easy path that the legacy auto makers are taking with their continued production of polluting gas cars and their half-hearted introduction of compliance cars.

Since government wants to encourage transition to sustainable energy, and oil and gas have been subsidized for decades, not to mention the tens of billions in bailouts for legacy auto, putting things in perspective shows that legacy auto should get the brunt of any criticism here, and the relatively smaller subsidies to Tesla are offsetting the larger investment Tesla has made.

The beauty of it is that the money is actually paid to Tesla by the legacy auto makers who have not stepped up or have stepped up only at a scale of virtue signaling, if you look at the sales numbers.