Tesla is up against old tech ICE huge industrial complex. It has the ICE auto dealers arrayed against it nationwide, the auto makers themselves and the oil industry... the entire value chain. Why? Tesla has developed proprietary management tech, enhanced Li-ion cells and has the lowest cost/KW-hr in the industry. It has also developed a hi efficiency, hi performance compact induction motor couple to a microprocessor controlled inverter. Then there is the design and infotainment electronics. They did win the top Consumer Reports award for any kind of car. Then they got an innovative flexible manufacturing robotic operation, that is possible with their unique kind of BEV design. Next, Elon nailed the shorts and raised $1.1B!
The big question is what is next? He has to focus his limited resources in the most decisive aspects of the business. Tesla does not have the time to wait for GenIII battery tech to evolve. They have to optimize the design of Model S to enable precision manufacturing, without extensive rework of bending metal of the kind that caused the recall. Optimize the supply chain to drive costs. Add value added features like smart cruise control, collision avoidance, park assist, etc. Scale production with 2 shifts to 50,000 Model S/year. Deploy Model X production and achieve additional economies of scale to produce 50,000 of these autos. Thus scale production to reduce ASP and get mid-end mass market in the $55-100+k range.
Ultimately, price including cost of operation including energy, maintenance + battery capacity/range + supercharger network will drive global demand. They can also upgrade the battery pack to 500 miles using the newer Panasonic batteries. If successful, this business model can wipe a bunch of industries starting with the auto dealers, a chunk of the oil industry and the hurt the big manufacturers. What do they have? Leaf? Volt? RAV4? BMWi3? Mostly fancy golf carts!
No wonder the ICE value chain consisting of dealers are laying siege to Tesla in the state legislatures. They know what happened to all those record shops, Blockbuster, etc when folks could just plug their PCs in the wall and download songs, video, etc like Netflix. Except for some wild hair moments like the battery swap dog and pony show last night, Elon Musk has what it takes. Unless he makes fatal mistakes, Tesla could become a dominant player in the new auto industry.
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