Tesla has its own weaknesses and strengths. It is a tough industry. It faces intense competition. But I think Tesla goes through cycles. Let's take Tesla cars. It was the first mainstream mover of full electric cars. It literally had a monopoly on it, hence a dominant market share and good profit margin. Then the competition slowly caught up to them. Losing market share was inevitable. They lose the market not because of product issues, but due to way cheaper prices of the competitive cars. Tesla still has superior technology and quality in terms of batteries and autonomous driving.
The main issue is cheaper Chinese electric cars. Of course Tesla can't compete with the superior scale of production and logistics of China, and cheap labour. And China is the biggest consumer market for electric cars. Producing Teslas in the US and shipping them to China is a losing game due to higher wages, tighter regulations, and shipping costs. That is why the new Giga factory in China is a such a big deal. Now the Chinese manufacturers have no advantage over Tesla in China, Asia and Ocenia.
For a majority electic car buyers, price is the deciding factor. But for the rest, especially in the US and some parts of the Europe, it is Elon Musk's political alignment. They would just dump a Tesla and buy a BYD just to hurt Elon over a mean X post. This can be a big sales drop in those regions.
But does Elon really care? I don't think so. He is a visionary and an innovator. That is why Tesla goes through growth cycles. They innovate to gain a monopoly, then slowly lose the market share as competitors catch up with cheaper versions, then they innovate again to gain a monopoly, and the cycle goes on.
Now there are 3 more products in Tesla's pipeline to give them back the advantage. Tesla Semi, Robo taxi and Optimus robot. They will distrupt and shake up the respective domains with those products. Investors will rally around Tesla during these cycles as usual. I personally believe Tesla is a 5 trillion dollar company within next 5-10 years. But all of this relies on one man and one man only. Elon Musk...
Modify on 2025-02-08 15:43
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