The problem with that is that if the intent of Tesla is to actually bring in enough revenue to match their market valuation they can’t just sell to the niche market of wealth Bay Area tech wealth, or Seattlites, or even all of Norway. They have to be able to produce a car in sufficient volume and with low enough costs to compete with the medium range of near-lux sedans which is what the Model 3 was shooting for, and if they’d hit their production numbers or even gotten close they’d be sitting pretty; however, with the massive delays and some of the quality problems that have been expressed they’re getting order cancellations which is a good thing in the near term as it eases a bit of the pressure on deliveries but doesn’t bode well for the long term where other carmarkers with existing production infrastructure and dealer networks can move into eletric vehicles and compete on merit.
The issue with the few number of Autopilot-induced crashes is not so much of a practical problem as it is one of perception, and a result of marketing what should be considered a driver aide system as a quasi-autonomous pilot (even as they try to claim it isn’t). This is an example of Telsa moving forward rolling out a technology without thorough testing in an actual use environment that a traditional manufacturer would have known to do (hence, why the driver assist systems provided by other manufacturers are more limited in their features) but the actual number of accidents and claims are essentially insignfiicant in the scope of things, and Musk-apologists are willing to dismiss the issues as being caused by inattentive drivers (which is true but fails to acknowledge that an unoccupied driver is going to drift to inattention). The recent recall is a far bigger hit financially, but every volume carmarker has recalls and that has to be built into the business model.
I continue to maintain doubt that the Gigafactory is going to result in dramatic reductions in battery costs, especially since after a period of plateauing the costs of lithium-ion batteries has been dropping. The Gigafactory might be a smart investment in terms of assuring that access to batteries is not a bottleneck, but setting up the manufacturing process for making batteries is a huge investment in not only capital but also all of the processes necessary to ensure a quality product, and it is easy to underestimate the cost and difficulty of getting to the point of high volume low marginal cost production. Batteries are going to be one of the principal cost drivers in electric vehicles for the foreseeable future just because there are essential limits on how inexpensively they can be made. However, the total cost of ownership of an electric vehicle should be significantly lower on the back end, and if the commuter model goes from ownership to a subscription or pay-for-use model with the advent of autonomously piloted vehicles, the low maintenance requirements and ability to directly recoup the investment makes the initial purchase cost far more palatable.
As for bankruptcy, I’m of two minds; on one hand, there are a lot of people heavily invested in the success of Tesla and who are likely willing to throw more capital into a company that is actually producing product, even if the production rate is not where it was promised. The caché value of the Tesla brand is probably waning somewhat just through familiarity, but in absence of an immediate competitor they still seem like a good bet in the next ten years of dominating their higher end segment of the electric vehicle market until companies like Volvo, Audi, and Toyota produce viable competition with vehicles that provide comparable performance and more mature ergonomics.
On the other hand, if you can’t pay your suppliers, they are going to stop delivering parts until you can come up with cash. Tesla would not be the first company driven out of business through not being able to keep production lines running, and despite the ridiculously overstated market evaluation is certainly not “too big to fail”. I don’t think the investors will let that happen in the next year, but it could certainly be the case that the investors lose confidence, vote out members of the board who stand with Musk, and replace him with someone who will do a strategic sell off of intellectual property and branding to an existing manufacturer hoping to get a foothold into the market with an existing product. This, in fact, used to be the essential business model of the automotive industry before consolidation into the Big Three, so it is hardly unprecidented.
All of the focus is on Tesla’s consumer vehicles, which is somewhat perplexing because it is actually the long haul semi-autonomous OTR transportation which offers what is potentially the most lucrative market for Tesla. Although I once dismissed the use of electric vehicles for long haul trucking based upon recharge times, it makes sense if you can provide a network of trucks and stations where trailers can be swapped out for nearly continuous transport, and the real efficiencies to be gained in long haul add up into real money, as is the reduced maintenance costs. The Tesla cars are very flashy and appealing but once market saturation is reached it isn’t clear whether they’ll be able to reduce costs enough to reach the mid-level or below, whereas the evident savings in OTR transportation makes it fiscally appealing from the start for the major corporate players in trucking as long as an infrastructure is in place to support it, and that can work even if that infrastructure is pretty narrowly scoped, e.g. just along major routes between transportation hubs, so you don’t have to have a nationwide rollout or extensive dealer network.
Stranger