The bear thesis for Tesla has been something like, "Tesla might have an innovative EV-first design, but when the major manufacturers with a century of manufacturing know-how wake up to EVs, they will drown Tesla in vehicles."
I think part of what's driving the increase in Tesla's value is the realization that this thesis was wrong.
Tesla is now beating all the established manufacturers at gross automotive margins, and it's really not close. Toyota is around 18%, Ford and GM around 15%. Tesla is up at 27%.
Part of that might be demand-driven higher prices. But Tesla continues to reduce their cost of goods, and Tesla has emerged as the most innovative manufacturer, which we already see in teardowns of the Model Y, with huge sections cast as one piece, but particularly in the design of Cybertruck, and Gigafactory.
Tesla is far out in the lead on software. They appear to be rapidly improving on manufacturing. Tesla has paid down its debt with stock issuances, the company has $16 billion cash on hand, and the ability to go get a lot more nearly for free.
If the major manufacturers aren't going to catch Tesla with manufacturing prowess, or capital, what are they going to catch them with?
I think part of what's driving the increase in Tesla's value is the realization that this thesis was wrong.
Tesla is now beating all the established manufacturers at gross automotive margins, and it's really not close. Toyota is around 18%, Ford and GM around 15%. Tesla is up at 27%.
Part of that might be demand-driven higher prices. But Tesla continues to reduce their cost of goods, and Tesla has emerged as the most innovative manufacturer, which we already see in teardowns of the Model Y, with huge sections cast as one piece, but particularly in the design of Cybertruck, and Gigafactory.
Tesla is far out in the lead on software. They appear to be rapidly improving on manufacturing. Tesla has paid down its debt with stock issuances, the company has $16 billion cash on hand, and the ability to go get a lot more nearly for free.
If the major manufacturers aren't going to catch Tesla with manufacturing prowess, or capital, what are they going to catch them with?