this post was submitted on 28 Aug 2024
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This will be the reason Tesla falls behind the rest of the automotive industry, wasting money on vanity projects instead of developing better vehicles.
The 3, Y, and the huge number of Chinese EVs being sold around the world have shown there is a huge market for affordable, practical electric vehicles, and what are they developing? A vehicle that won't be able to fulfill it's intended role for a decade almost everywhere.
I think the focus on AI is what will be the problem. Sure, AI is cool, and sure you need advances for self-driving, but you’re a car manufacturer and can’t neglect car manufacturing
All that stuff is what justifies Tesla being treated as a Tech Stock rather than an Automotive Stock and hence having Stock Prices which are 10x or 20x what an auto-maker with similar Revenue and Margins would have.
Dropping the techno-bollocks that underpins their "we're disrupting the Auto industry with our Technology and will become the Google of cars" story and just focusing on being good at making electric cars would mean loosing the huge "we're a Tech Stock" premium that keeps Tech companies' stock prices high even when they're loosing money (the valuations are justified by investors with the expectation that they will one day dominate entire markets, like Google or Apple), and hence accepting their stock falling 90%, from Uber style valuations to Ford style valuations.
I doubt shareholders will ever accept that, hence I expect Tesla will just keep "faking until you make it" all the while getting farther and farther away from making it, until eventually they crash far harder (possibly even cease to exist in the next decade or two) than it would happen if they just settled down to be just another auto-maker. (In my mind I have the image of the Coyote from Road-Runner running out of track, going over the cliff and keeping on running until noticing he's not running on ground anymore and is high up in the air)
If you want to be the google of cars you shouldn't be building cars, but become Bosch.