> I'd be more skeptical but EVs are eventually going to cost way less to make than typical ICE (internal combustion engine) cars, and per unit that savings translates into a lot of fucking profit.
What's the basis for this? Battery tech evolution and ICE cars have no more (safe) optimizations to make to get costs down?
This is also predicated on the idea that every part of Tesla's operations are substantially better than existing automakers.
Do people really believe that Tesla is literally run 10x better than Toyota, Volkswagen, Daimler, BMW or Honda? I don't think so.
Then there's the nightmare of trying to appeal to two wildly different consumer groups.
At the low end: does Tesla have a meaningful reliability advantage versus Honda and Toyota? From what I have seen, it appears not. This matters less when you're dealing with premium buyers, but will not work with the mass market. Fans will put up with hassle (I own an AMG... I'm more than aware of the extra expense I am constantly paying for - and that's a trade-off I'm happy to make in return for a powerful v8).
Secondly from a clout point of view: why would anyone buy a Tesla over a comparatively priced Audi, Porsche, Mercedes or BMW. The people who talk about their Model 3 with a burning passion aren't trading in a 911, or an E Class or a Q7. They're excited to upgrade from a 2015 Camry. Massive expectation gap.
Plus, all of these companies are valued far more realistically. Tesla being worth more than every other automaker or whatever gives them very little room to breathe. If Tesla is ever valued as the hardware manufacturer with relatively low margins (when compared to say a tech stock like Facebook or Salesforce).. is the day that we will see an enormous valuation haircut.
I wonder if it's as simple as the market confusing all new technology companies with software companies, which have incredible distributional advantages and the ability to grow revenues from optimizations.
The company valuation of BMW and VW isn’t the problem- it’s a problem for Tesla. There aren’t enough nerds in the world to justify it’s insane stock price.
I won't speak to profit, but battery performance per dollar has been improving at a fast exponential clip for the past couple decades, which is one of the largest costs of an EV.
An EV drivetrain is also far, far simpler. Fewer parts, and less complexity in those parts. No clutch, gearbox, carburetor, differential, starter, pumps, exhaust…
A modern ICE car is an absolutely unbelievable engineering marvel, but unless battery progress unexpectedly stalls there's just no way they can keep up in price or reliability with EVs.
What's the basis for this? Battery tech evolution and ICE cars have no more (safe) optimizations to make to get costs down?