Tesla

[karlmarx]

Thanks for the link. I didn't listen to the podcast, but I found essays on his thoughts about Tesla. He has written quite a lot on it, here's just one of it:

https://contrarianedge.com/why-we-dont-o...not-bears/

He also has a 30 odd page report on Tesla, for those interested.

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1) If I understand his argument, he is saying that Tesla will be a big winner if it can churn out 2-3 million cars each year. He thinks Tesla can do this because there driving a Tesla is like using an iPhone 3, while driving conventional non-electric cars is like using a 2G Nokia (think 3380). And people will surely not go back to using a 3380 once they've tried an iPhone.

I disagree with such a comparison. While I've never driven a Tesla before, I cannot imagine how it can provide the sort of value-add that is equivalent changing your 3380 to an iPhone. Both a Tesla and a conventional is still an A to B form of transportation. My impression is that Tesla is really a souped up golf buggy.

But if Tesla is more than an electric car, that it actually succeeds in producing an accident-free self-driving car, then yes, that is like an upgrade from 3380 to iPhone. And that may dominate the market.

Unfortunately, I haven't the faintest idea or the ability to judge if Tesla has a high probability of achieving such goals.

Currently, Tesla is producing about a hundred thousand cars a year. Its share price seems to be far ahead of the present reality, for now at least.

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2) The author also thinks that the incumbents will not succeed in moving towards production of all-electric cars, mainly because they are constrained by their own legacy. Again, he invokes Nokia; it's inability to develop from scratch a new smartphone O/S is what doomed it.

The iPhone 3 smart phone -- which is good touchscreen, good internet browsing, and allows third party development of apps -- was a product which the market was not expecting.

The closest earlier iterations of a 'smart phone' is probably the Palm, but its user experience was too clunky to be widely-accepted.

Before Nokia was wiped by the iPhone, it first faced intense competition from Blackberry. BB -- which is notable for its secured messaging service, long-battery life, and enjoyable tactile experience -- was even further from Palm as a 'smart phone.'

Nobody saw the iPhone coming at all (partly also because the network carriers have always been resistant to the introduction of phones with heavy data usage). And so competitors didn't have enough time to react. And when they panic, they fumbled, as most people do.

BB tried developing a browser-enabled phone with its signature keyboard. But navigation is through a trackpad, not touchscreen. The browsing experience was comparatively poor, and third party development of apps wasn't available until it was too late. They didn't want to cannibalise their lucrative messaging service fees. Yes, constrained by their own legacy.

As much as Nokia and BB may be constrained by their own legacy, it should be noted that the iPhone's unexpected arrival on the market also contributed a large part of its eventual market dominance.

Tesla, on the other hand, has been tooting its electric car for a decade now. And while the incumbent car manufacturers might have dawdled for the first 5 years, they surely haven't been for the next 5.

If Tesla had the ability to deliver a hundred thousand electric cars in 2010, when no one cared about electric cars, then yes, it might have a large market share today. The incumbents had 10 years to catch-up. Blackberry and Nokia was clueless until the iPhone was launched.