The car business sucks, FYI. It’s a capitally intensive and labor intensive and highly cyclical business in a highly regulated industry with numerous players propped up by numerous governments based on national security concerns that local auto manufacturing would be crucial during any war, and special interests due to the sheer number of people the companies employ.
It is highly sensitive to interest rates, currency, tariffs, and ability to align all this complicated production with trends and quality so that volume meets demand for long lead time extremely expensive factories.
The advantage of electric over non-electric is that it uses expensive materials that reduce the number of components that slightly reduce the labor and capital intensity and overall management skills it requires to build a high quality vehicle, but this isn’t enough to make it a great industry.
The erosion of Tesla’s brand due to Elon’s political involvement is another significant headwind and end of government subsidies for electric cars has created significant headwinds for Tesla.
That being said, the fact that Tesla produces the most fully optimized electric cars without all the legacy costs and has succesfully been able to hire the best engineers who are passionate about what they are building. They still sell some of the best if not the best cars on the road.
They build better optimized cars without legacy costs so they are better than the legacy automakers, and sold so many units and been able to share parts and engineering costs across most of their platforms and built out an eco system of charging and accessories etc that they are generally significanltly better than the electric vehicle startups.
I would still prefer to buy a Tesla, but I’m not sure I would want to own the company building them or any company in the car industry for that matter.
It is highly sensitive to interest rates, currency, tariffs, and ability to align all this complicated production with trends and quality so that volume meets demand for long lead time extremely expensive factories.
The advantage of electric over non-electric is that it uses expensive materials that reduce the number of components that slightly reduce the labor and capital intensity and overall management skills it requires to build a high quality vehicle, but this isn’t enough to make it a great industry.
The erosion of Tesla’s brand due to Elon’s political involvement is another significant headwind and end of government subsidies for electric cars has created significant headwinds for Tesla.
That being said, the fact that Tesla produces the most fully optimized electric cars without all the legacy costs and has succesfully been able to hire the best engineers who are passionate about what they are building. They still sell some of the best if not the best cars on the road.
They build better optimized cars without legacy costs so they are better than the legacy automakers, and sold so many units and been able to share parts and engineering costs across most of their platforms and built out an eco system of charging and accessories etc that they are generally significanltly better than the electric vehicle startups.
I would still prefer to buy a Tesla, but I’m not sure I would want to own the company building them or any company in the car industry for that matter.