Quote:
Originally Posted by zamler
How are the Gigafactory's not leveraging economies of scale? And Tesla is a top 5 tech company easily, by any measure. They are all in on software and have their own, in house ASICs.
Legacy autos are a jumbled mess of modules and software from dozens of sources good luck making all that work seamlessly like Tesla does with over the air updates. VW already delayed a model because of software.
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What I meant by economies of scale is that, when you create software, you can scale it infinitely, with little cost. If your customers simply sign up online, you can scale almost infinitely.
Building cars doesn't work that way. Every car needs seats, and a windshield, and tires...
Also, most tech companies are global floaters and don't pay anywhere near their share of taxes. Tesla doesn't have that advantage either.
Tesla's product is
based on tech. And the competitive advantage that they currently enjoy is a
result of tech. But no, they do not have the same advantages that the other big tech companies (Apple, Amazon, Facebook, Google) have
That is the point.
They have a 'tech' multiple. But they don't have the same advantages that the (real) tech companies have. They can't build a limitless number of cars, no matter how much of a technological advantage they currently hold.
The challenges to manufacturing millions of automobiles profitably, don't simply disappear, just because they have some seamless software advantages.
Don't get me wrong - I am not saying that they are going to disappear in a couple years. Far from it. In fact, I expect them to be technological leaders in the industry for some time.
What I
am saying that their stock price is priced BEYOND perfection.