Quote:
Originally Posted by jammies
The biggest, richest companies in the world used to be oil companies, and now they have been supplanted by tech companies that didn't even exist a few decades ago. That's why Tesla is valued in the hundreds of billions, being a tech company at core, and having the best tech. They might lose that edge, but to the likes of Ford and Nissan? Toyota and Daimler - maybe. But history is littered with companies that failed to retool and rethink fast enough to quell upstart competitors. Where is US Steel* now?
In the 1970s and 80s, Japanese vehicles went from unreliable, cheap jokes to almost causing all three big American manufacturers to go bankrupt, with only government bailouts saving them. Nobody thought in 1972 that anyone could break into the American market in any significant way - until fuel economy became paramount, and Detroit couldn't adapt quickly enough despite the technology theoretically being merely an extension of what they already did, and not an entirely different field.
Being big and being established in a market doesn't guarantee anything when that market drastically changes. Some of the titans will adapt, some will go under, and someone else will take the place of those that die. Maybe not Tesla, but they've got an enormous head start on anybody else.
*Once the biggest company in the world, now number 27... among steel companies.
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Tesla is not a tech company, like the others you are lumping it in with. Tech companies have a lot of advantages with respect to taxes (that need to be addressed), economies of scale, reduced input costs, etc. Tesla does not have these advantages over its competitors. It has a head start on some tech advancements with their vehicles, yes, but that is not the same thing.
There are huge economic challenges to building cars - and those challenges grow exponentially when you move from thousands of vehicles to millions of vehicles. What I am suggesting with the other car companies - especially the big 3 German companies - is that they will catch up on tech faster than Tesla can take advantage of their head start on tech, because moving from 100,000 vehicles to 10,000,000 vehicles is not something that can happen overnight.
To your point about titans being replaced, yes of course, that is the nature of free markets. It is easy to predict the fall of titans, but it is much more difficult to predict who will replace them, or what the resulting future will look like.
I am not trying to argue that Tesla won't continue to grow, I fully expect that they will. My argument is that their stock price is now so far ahead of itself that there is almost no chance that reality can deliver on that optimism. The nature of competition, along with the challenges of dominating the global vehicle market, make it extremely unlikely.