Categories: world

How Tesla Could Dominate The Auto Industry

<div_ngcontent-c14 = "" innerhtml = " A Tesla Model 3 automobile is on display. (Photo by Chesnot / Getty Images)…


<div_ngcontent-c14 = “” innerhtml = “

A Tesla Model 3 automobile is on display. (Photo by Chesnot / Getty Images)

One of the stronger arguments Tesla bears have put forward is that they expect major car makers like Ford, Mercedes, Honda and Toyota to eventually release a ” Tesla-killer. ” Gorden Lam, one of my managers, does not see this happening anytime soon. There are good reasons why Tesla has

Five years ago, Citron Research shorted Tesla because they foresaw that:

By the time this (Tesla’s) product is even approaching market, there will be several other 200-mile range plug-ins that have been out for years.

Earlier this week, when Citron reversed their short position, they said it was because ” Tesla is destroying the competition “.

But what is the competition? Is it electric cars? Is it luxury cars? Is it all cars?

Lemon thought the competition would come from other 200-mile range plug-ins. Tesla er imidlertid attraktivt for Tesla’s fremtid, ikke så meget for & nbsp; companies that make cars powered by internal combustion engines (ICE).

If Tesla’s production ramps up and fixed costs are divided among more cars, it will become possible for Tesla to make a profit on lower-priced cars that can compete with ICE cars across the board. .

On Wednesday’s earnings call, Elon Musk said, Tesla could increase production from 5,000 to 7,000 cars / week without much capex spending. Think about that! Tesla can make 40% more cars without increasing their fixed costs by much.

Musk did not say this, but I think it means the fixed costs per car are about to drop by about 40%. When it happens, I think Tesla will be able to compete profitably for mainstream car buyers.

How Will Competitors React?

Like Citron Research, I am surprised at how ineffective the leading car companies have been in developing a ” Tesla-killer. “

Rather than compete with Tesla, Ford seems to be running away. In April, Ford announced they were dropping traditional cars from their product line to focus on crossovers and SUVs. This strategy makes sense from an accountant’s point of view as these are Ford’s most profitable products.

However, since there is no reason, Tesla could not make an SUV, Ford’s decision to focus on their high-margin products only protects them competing with Tesla for the time being.

Mercedes and Volvo have shown concept cars, which basically means they are years away from production.

GM is currently selling the Chevy Bolt, which looks like a competitor on paper. However, Gorden Lam points out that sales of the Bolt plunged 40% in September while Tesla’s Model 3 was the fifth best selling car. The customers have spoken. Honestly take a look at both cars. Which one would you rather own?

The award-winning Chevy Bolt EV is presented during the four-day auto trade show AutoMobility. (Photo by David McNew / Getty Images)

It’s almost as if GM does not want to sell too many bolts. This would make sense if the Bolt is a money-loser and GM only sells it to get ZEV credits.

The Clock is not a Tesla-killer.

The Clock Is Ticking

If it turns out customers prefer to fuel their cars with $ 1 / day of electricity instead of $ 50 / week of gasoline, the current auto industry leaders are woefully unprepared.

In order to compete, they will have to overcome two big hurdles.

First, they need to find a source of batteries for their cars that are competitive with the ones Tesla makes. Musk said in the last call that Tesla batteries have the lowest cost per kilowatt hour. This could be hyperbole, but the fact is that a competitor would have to match Tesla’s cost per kilowatt hour or cede a big advantage to Tesla.

Second, they need to provide customers with a way to charge their cars on long trips. Otherwise, customers will need a second car for long trips.

One takes you to see the big car companies taking steps to compete effectively with Tesla. leader to convince everyone with a stake in the company to make major investments to compete in a business where you do not have a benefit and which will cannibalize your existing profits.

I do not think the CEOs of the other car bedrijven zijn in staat om deze stap te nemen. Musk was able to do it because Tesla did not have ICE car profits to cannibalize.

We’ve Seen This Before

When Apple launched the iPhone in 2007 a lot of investors thought Nokia, Motorola, Blackberry and Sony Ericsson would make short work of Apple.

In time, the leaders of the mobile phone industry & nbsp; have almost completely changed. The process took years to unfold, and generated a lot of wealth for those who saw it coming early.

The situation is repeating itself with Tesla right now. There are lots of people betting that today’s auto industry leaders will eventually put down the threat posed by Tesla.

Until we see a serious competitor to the Model 3 come to market, I’m betting on Tesla.

If you would like to be notified when Gorden Lam updates his views, click here .

If you would like to be notified when I write about Tesla or other stocks you and I are

“>

A Tesla Model 3 automobile is on display. (Photo by Chesnot / Getty Images)

One of the stronger arguments Tesla bears have put forward is that they expect major car makers like Ford, Mercedes, Honda and Toyota to eventually release a “Tesla-killer.” Gorden Lam, one of my managers, does not see this happening anytime soon. There are good reasons why Tesla has no real competitors at this time. If one does not emerge soon, Tesla looks ready to dominate the automotive industry in a few years.

Where’s The Compe

Five years ago, Citron Research shorted Tesla because they foresaw that:

By the time this (Tesla’s) product is as approaching market, there will be several other 200-mile range plug-ins that have been out for years.

Earlier this week, when Lemon reversed their short position, they said it was because “Tesla is destroying the competition.”

But what is the competition? Is it electric cars? Is it luxury cars? Is it all cars?

Lemon thought the competition would come from other 200-mile range plug-ins. Tesla er imidlertid attraktivt for kunder i hele luksusbilmarkedet, ikke bare den all-electric luksusbilmarkedet.

Tesla’s fremtid er ikke så stor for firmaer som gør biler powered by internal combustion engines (ICE).

If Tesla’s production ramps up and fixed costs are divided among more cars, it will become possible for Tesla to make a profit on lower-priced cars that can compete with ICE cars across the board.

On Wednesday’s earning call, Elon Musk said, Tesla could increase production from 5,000 to 7,000 cars / week without much capex spending. Think about that! Tesla can make 40% more cars without increasing their fixed costs by much.

Musk did not say this, but I think it means the fixed costs per car are about to drop by about 40%.

How Will Competitors React?

Like Citron Research, I am surprised at how ineffective the leading car companies have been in developing a “Tesla -killer. “

Rather than compete with Tesla, Ford seems to be running away. In April, Ford announced that they were dropping traditional cars from their product line to focus on crossovers and SUVs. This strategy makes sense from an accountant’s point of view as these are Ford’s most profitable products.

However, since there is no reason, Tesla could not make an SUV, Ford’s decision to focus on their high-margin products only protects them competing with Tesla for the time being.

Mercedes and Volvo have shown concept cars, which basically means they are years away from production.

GM is currently selling the Chevy Bolt, which looks like a competitor on paper. However, Gorden Lam points out that sales of the Bolt plunged 40% in September while Tesla’s Model 3 was the fifth best selling car. The customers have spoken. Honestly take a look at both cars. Which one would you rather own?

The award-winning Chevy Bolt EV is presented during the four-day auto trade show AutoMobility. (Photo by David McNew / Getty Images)

It’s almost as if GM does not want to sell too many bolts. This would make sense if the Bolt is a money-loser and GM only sells it to get ZEV credits.

The Clock is not a Tesla-killer.

The Clock Is Ticking

If it turns out customers prefer to fuel their cars with $ 1 / day of electricity instead of $ 50 / week of gasoline, the current auto industry leaders are woefully unprepared.

In order to compete, they will have to overcome two big hurdles.

First, they need to find a source of batteries for their cars that are competitive with the ones Tesla makes. Musk said in the last call that Tesla batteries have the lowest cost per kilowatt hour. This could be hyperbole, but the fact is that a competitor would have to match Tesla’s cost per kilowatt hour or cede a big advantage to Tesla.

Second, they need to provide customers with a way to charge their cars on long trips. Otherwise, customers will need a second car for long trips.

One takes you to see the big car companies taking steps to compete effectively with Tesla. leader to convince everyone with a stake in the company to make major investments to compete in a business where you do not have a benefit and which will cannibalize your existing profits.

I do not think the CEOs of the other car bedrijven zijn in staat om deze stap te nemen. Musk was able to do it because Tesla did not have ICE car profits to cannibalize.

We’ve Seen This Before

When Apple launched the iPhone in 2007 a lot of investors thought Nokia, Motorola, Blackberry and Sony Ericsson would make short work of Apple.

In time, the leaders of the mobile phone industry have almost completely changed. The process took years to unfold, and generated a lot of wealth for those who saw it coming early.

The situation is repeating itself with Tesla right now. There are lots of people betting that today’s auto industry leaders will eventually put down the threat posed by Tesla.

Until we see a serious competitor to the Model 3 come to market, I’m betting on Tesla. [19659008] If you would like to be notified when Gorden Lamb updates his views, click here.

If you would like to be notified when I write about Tesla or other stocks you and I are both following, click here.

Share
Published by
Faela