The back and forth in this thread reminds me of the religious wars between Mac and the IBM PC decades ago.•
Facts that I believe to be true are:
• That total vehicles sales have been decreasing for several years while EV sales have been growing.
• Tesla is way ahead of the competition in BEV sales by volume save for, maybe, BYD. BYD started out making batteries and has diversified aggressively. They make a whole range of vehicles including ICE, BEV, and hybrids. While their total vehicle sales are large, I wonder how many are BEVs, the rest don’t count for the purposes of this thread, they are the last surviving members of a dying species.
• Tesla is the only significant car maker with a 30% gross margin and this is a formidable weapon. There were some comments on the WWW about price elasticity of demand
What Is Price Elasticity of Demand?
Price elasticity of demand is a measurement of the change in the consumption of a product in relation to a change in its price. Expressed mathematically, it is:
Price Elasticity of Demand = Percentage Change in Quantity Demanded ÷ Percentage Change in Price
The takeaway is that Tesla is in a position to manage prices so as to keep their production lines at full capacity. When asked about the subject, Elon Musk said he preferred to grab market share over maintaining high profits provided the cash flow was favorable.
Apparently the recent price cuts in China have priced Teslas closer to BYD which has very thin margins. The commentary was that BYD with its heavy state ownership was less interested in profits than in pushing EV adoption. They do have a huge pollution problem in their mega cites.
The way I view Tesla’s future is a succession of “S” curves as it penetrates both related and emergent markets. I have no idea which will succeed or their timelines but they include solar, storage, self driving AI, general AI, Dojo, humanoid robots plus others that have yet to surface. Unless Tesla manages to implode, it is a continuing growth story for decades.
Feel free to consider the above religious dogma or long term investing strategy. All I can add is that I’ve put my money where my thoughts on the subject are.
• A long time ago, at a computer show in a far away country, I was having a discussion with a former business partner, Alberto Herrera, then selling IBM PCs while I was an Apple reseller. It was the time of the PC religious wars. Alberto says, “You should be selling the best product in the market” to which I replied, “I’m selling the best product in the market!” Puzzled, he asks, “Apples?” “No, Denny Schlesinger!”