These TEN compete against each other as well. Do the math, the Pareto Distribution math.
The Captain
Let’s do it. In 2020 Tesla had 80% of the global EV market share. Now it has less 20%. That’s the 80/20 Pareto distribution, only Tesla’s in the 20%, not the 80%.
The bad news is that Tesla is not only losing market share, they are selling fewer cars too, even though the EV market is growing. Losing sales in a growing market is officially Not Good™.
Worse, Tesla used to have the best margins in the business by a lot (except for maybe niche manufacturers like Ferrari). The margins are still pretty good for a car company, but they’ve come way down. If Tesla wants to increase deliveries and market share, the margins are probably have to come down some more. That’s also officially Not Good™
As an aside, I had an interesting conversation with a robotics engineer on the ski lift the other day. His company makes workplace robots that are designed to unload and fetch things. He said something (unprompted) about the legs vs. wheels debate we’ve had on this board a few times. Legs are more complicated which add to the cost. But a potentially bigger problem is that legs require constant stabilization, which means robots with legs use a lot more power. You can imagine the problems that creates. Might be worth keeping in mind when evaluating robotics companies.
That’s a mistaken start. The real metric is the total CAR market. Suppose Tesla makes the first EV, it has 100% EV market share. Next year Tesla makes 9 EVs and Ford makes ONE. Tesla’s EV market share dropped from 100% to just 90% while it grew nine fold. BTW, Ford grew infinity% from 0 to 10%. EVs want to replace ICE, that’s where the real competition lies, use it as your base for doing the math.
When Tesla had 80% it made 80 of every 100 EVs. Once Tesla drops to 20%, if it made 80 EVs the 10 competitors made an average of 32 EVs each.
The Captain
Unlike VW Tesla is not going broke. Unlike competitors, Tesla makes money on EVs. Do incumbents make money on EVs?
Wheels have a hard time going up and down stairs. Your engineer is talking about industrial robots. Optimus is a humanoid robot designed to function in any human environment.
Okay, let’s look at the total car market. Let me scribble on the back of an envelope for a minute…
In 2023 Tesla had about 4.18% of the total US car market.
In 2024 Tesla had about 3.97% of the total US car market.
For comparison’s sake, during the same period:
Ford’s market share went from 12.88% to 13.01%.
VW’s market share went from 2.12% to 2.37%.
GM’s market share went from 16.74% to 16.90%
I didn’t look it up but I’m certain Tesla had the best margins of any of those companies, which counts for a lot in my view. But it will be hard to maintain those margins in the face of shrinking market share.
The above are fair conclusions. BTW, I don’t keep track of sales, revenues or margin numbers, if Tesla were just a car company it would not be in my portfolio. I’m investing in Tesla’s future and Tesla EVs are vital to that future for three reasons, the cash flow to fund the new ventures, the manufacturing prowess to build Optimus robots, and the AI that powers not just FSD but also Optimus robots.
The Captain
Cash flow will decline with margin pressure. Tesla model portfolio is stale and needs to release models that cover other market niches to build vehicle revenue, else their market share could plateau.
Today robots, AI are negative cash flow aspirational hopes and dreams R&D.
Tesla did a great job in many things, including pushing what became a standard for charging infrastructure.
Vehicles communicating with each other could be the key to AV.
Does Tesla have any focus on this?
They could lead the way on defining and implementing the technical standards for how AVs communicate with other vehicles, objects (IoT). Is anyone doing this?
This reminds me of the debate of smart phones decade ago. Remember Huawei and $10 phones ? Samsumg smart phones ? Google pixel and Amazon Fire ? Microsoft Nokia ? All were “iPhone killers”.
Meanwhile Apple went from $500B to $3.5T market cap and Tesla is sitting at $1.3T and Model Y is best selling car in the world.
Is Tesla working on best in class communication among vehicles, iot, (v2v, v2x) and creating a universal standard like they did for charging?
Some similarities, but some key differences too. For one, iPhone’s market share is about the same as it was a decade ago. But Apple’s user base has grown with the market. There are some fluctuations around new models and such but overall Apple is selling more iPhones than ever. Another key difference is that unlike every other manufacturer, Apple’s margins are insane and they’ve managed to keep them insane the whole time. They could probably sell more if they were cheaper, but they are basically printing money as it is, so why bother?
By contrast, Telsa has not grown sales with the market. At least not this year. And they’ve lost a bunch of market share too. And one difference that is important in my view, is Tesla’s margins have gone from amazing to pretty good. Pretty good is still pretty good, but Apple was able to stay at amazing the whole time.
Actually, the venerable Toyota Corolla snuck back into first place.
It would create the biggest communication logjam ever imagined. Autonomous means self sufficient. Birds and fish figured it out before man walked the earth. Birds flock and fish school. Craig Reynolds created Boids in 1986, an animation of birds flocking with just three simple rules. Each bird get the information visually:
Just eyes, no radar, no lidar, each bird…fish…buffalo autonomous.
Boyds
Most shorts do this lazy analysis and the reason got their heads handed to them.
Remember people shorting Amazon by valuing how many books they sold vs Barnes and Nobles ?
Who said anything about shorts? I simply pointed out your comparison between Apple and Tesla was a false analogy. You are making the logical fallacies a that because some unnamed person said something in the past, current comments about a different subject should also be dismissed, even though the two situations are not related.
My analysis might have been lazy, but you didn’t do an analysis, which is even lazier.
No I don’t. Do you only communicate using logical fallacies?
Go ahead and short Tesla if you have conviction.
Read this before you do
https://www.tesla.com/ns_videos/Tesla-Master-Plan-Part-3.pdf
Are you saying V2V and V2x is a tech dead-end for AVs? Or at least not necessary?
I don’t remember any of them being “iPhone killers”. But for the record, Samsung sells more cell phones than Apple, and Huawei is now #2 in China while Apple is #5. But yes, two of the others have flamed out, and Apple is still doing very nicely. I’m not sure that’s how the EV market is going to develop, indeed there’s no middleware that makes the platform a lock. (Musk gave away the one possible deterrent by opening up the charger network so soon, but perhaps Tesla will be able to find another.)
No, I don’t remember that either, although I’m sure there was at least one guy who did it somewhere. I surely don’t remember it as any kind of serious trend. Do you? Are are you just making more stuff up again?
Amazon was a topic of discussion for 10+ years. Maybe 15 years. Many many threads. Amazon shorts shifted points from “book store”, to “low margin business” to “dot com bust” to “no profits”.
The cell phone discussion is super interesting, aside from the drunken fantasies. Microsoft should have been the winner. Microsoft correctly understood mobile was the way of the future and released Windows CE back in 1996.
But it never took off. Google murdered it and everybody else except Apple with the Android operating system, because it was free. Google was making so much money on search they didn’t care. It just drove more people to search with Google. Microsoft’s business model was selling operating systems and it failed because you can’t compete with free.
At that point, every non-Apple cell phone became a commodity. The manufacturer didn’t really matter too much because they all Android under the hood. The main way to compete was on price, so the model was to sell a bazillion units as cheaply as possible. That’s not a bad model, but it is different than Apple, who makes an enormous amount of money on each phone. I’d have to look it up to be sure, but I think Apple owns about 20% of the cell market, but about 80% of the revenues. Something like that.
As an aside, the Pixel is a great phone, my wife has one (I have an iPhone). It is very powerful and cheap, and Google doesn’t care because they are printing money selling ads.
This is not why Microsoft Mobile Phones died. They died because they were utter cr@p. My carrier sent us 5 of them at one point. It took them months to determine that the darned Microsoft software just DIDN’T WORK properly on their network. And believe me, I’m a typical pedantic engineer, and I spent tens of hours with the carrier’s engineers and techs helping them analyze the problems. Basically the Microsoft software just didn’t work correctly AT ALL. There were literally some basic cellphone protocol things that they just didn’t do correctly. In the end, the carrier took back the 5 Microsoft OS phones and sent us 5 android ones instead. Those worked perfectly fine out of the box.
The only way Microsoft could have won, or at least contended, is if they wrote better software. Luckily with PC Windows and Office they have something close to a monopoly so their software doesn’t has to be as good because there aren’t any real competitors.
Totally agree. Microsoft should have been there the firtest with the mostest and they fumbled it. But they understood early on where things were headed.