In response to
@Oneiro:
Batteries: Panasonic, LG, CATL I guess you could say are competitors in some vague sense, but they are actually suppliers. BYD is a competitor in a more general sense, but EVs are in competition with ICE vehicles moreso than with other EVs for the most part. There is a huge addressable market for many EV companies to all have a piece of the pie. Also, no other battery company currently has publicly announced ambitions to be producing 3 TWh of batteries by 2030. Currently that is by far the most ambition plan by a wife margjn, though that’ll change with demand. Most companies wait for demand and then set up production to satisfy it. Tesla is anticipating demand so they can be ready to satisfy it when it comes (similar to their supercharger network).
By AI I assume you mean autonomy, though Tesla is likely to also get into other generalized AI applications long term. Our confidence comes from the standpoint that the competition (Zoox, Mobileye, Waymo, etc) are all using LIDAR which is a great technology, but it is expensive (sure, Wright’s Law will bring it down over time, but cumulative production doublings will be slow) and ugly (not changing any time soon), and it restricts vehicles that are dependent on it to functioning in geofenced areas with constantly up-to-date HD maps. IF IT WORKS, Tesla’s approach of solving passive optical and teaching AI to drive the way humans do (by sight and intuition) is vastly more generalized and useful than lidar based technologies. They have a huge fleet to roll it out to when it does work (whereas the competition will have the huge task of scaling it), and the FSD beta shows some very encouraging early results (watch some FSD beta videos on youtube if you haven’t already). I believe passive optical is a solvable problem and Tesla has the engineering ability to pull it off. They also have the million vehicles on the road constantly gathering real world data, which should be an order of magnitude or two more useful than Applied Intuition’s simulation software. Simulation is great, but the real world is very messy and chaotic, and edge cases are the hardest to simulate and solve. Getting to 99% effective/safe driving isn’t the hard part. The hard part is adding another two, three, or four 9’s in the decimal place, which is where you need to get in order for level 5 autonomy and robotaxis to work. Without experiencing and machine learning through a crazy number of real world edge cases it will be extremely difficult to achieve.
What is Blue Origin doing that is relevant to Tesla? I view them more as a SpaceX competitor, so I’m intrigued on that one.
Ultimately for me it comes down to vision, innovation and manufacturing excellence. (By manufacturing excellence I don’t mean the individual cars. Sure, Tesla has had fit and finish issues and such). What I mean is designing super efficient and capital cost effective factories, designing and building machines in house to build the machines that make the cars. Re-thinking from the wheels up how a car should be built in order to be as safe, cost effective, and high performance as possible. Redesigning batteries to make them more energy dense, faster charging, and cheaper to produce. I just don’t see any other competitor that has demonstrated the ability to do one or two of these core competencies of Tesla efficiently, much less all of them. Elon Musk came right out and said that he doesn’t think Tesa can make all the world’s cars, and that they need competitors to step up. Competition is a good thing, as long as you’re leading the pack.
It also bears mentioning that based on studies Tesla is the #1 most desired place of employment by graduating engineers (SpaceX being #2), and engineering talent is the most valuable resource that there is when you are trying to solve big, hard problems. Also the collaboration between Tesla and SpaceX provides very unique advantages in R&D, materials science, manufacturing technology, etc.
That’s enough for the moment. Sorry for rambling.
Edit: ah, yeah - you mentioned solar too. Honestly, there is so much business available in solar that competition isn’t a huge concern. But it does help that Tesla’s solar panels are now 30% cheaper than the industry average (down below $1.50 per watt). Their constraint at this point seems to be installation manpower, but that’ll work itself out over time as they train and onboard more installation contractors. Also the Tesla Solar Roof will prove to be a fantastic product for customers who want to replace their roof rather than adding tiles to their existing roof. Honestly I am the least knowledgeable/excited about their solar business out of everything they do, though I’ll definitely be a solar roof customer.
In response to
@StLHokie:
Energy is a massive opportunity, no doubt. But I think you are downplaying how huge the automotive opportunity is. I think before weighing the likelihood of success or execution risk you just need to look at exactly what they say they will do. If by 2030 they can achieve production and sale of 10-20 million vehicles per year with around 40% gross auto margins, plus a $10-40k FSD software option with a decent take rate, plus a data driven/risk optimized Tesla insurance product with a high take rate, and throw a functioning autonomous ridehailing network on top.... the value associated with all of that is astronomical. We can argue about whether they will achieve it or not, but the path forward is extremely clear and the rewards associated with successful execution are immense.
Edit: I should have mentioned this before but somehow it slipped my mind. Tesla has another huge advantage in access to cheap capital. With a valuation nearing $500B and probably $1T in the not distant future, they have the ability to raise billions of dollars in exchange for trivial amounts of equity. They could do an at the market cap raise of 1% or less tomorrow and build a giga factory or two with the cash. Having access to huge amounts of cheap capital and allocating it correctly in infrastructure and production capacity creates a flywheel effect that keeps adding value to the business, which makes access to even more capital even cheaper, which adds value to the business, which makes capital cheaper, and on and on it goes. This is a massive advantage that Tesla’s competitors mostly do not have access to. Essentially myself and other Tesla investors are saying “we believe that you can do the things you say you can do. Here’s all the money you could possibly need to make it happen.”