BobbyD
There are 80 odd million cars produced a year world wide.
The production target Tesla can't hit represents 0.325% of worldwide car production.
To hit 1% of Worldwide sales Tesla would have to get to 5000 cars a week, and the triple its output.
Legacy auto can build cars. It can build diesel cars, and it can build petrol cars, and it can build electric cars.
It builds what it makes most sense to build. At the moment that is mainly petrol, when it makes most sense to build mostly electric, guess what they will build? Some of them are quite good at building cars. Producing a simpler product really isn't going to phase them.
Yes, but a lot of the growth market for cars is outside of the US, UK and European markets and in China it is being serviced by Chinese makers producing electric cars.
The US car market in 2017 was about 6.7 million units. see e.g.
https://www.statista.com/statistics/199 ... ince-1951/If Tesla can produce 5000 cars a month, that is 60,000 cars per year, or about 1% of the US market, if they can make 5000 cars a week, that corresponds to 240,000 cars a year, about 4% of the US market.
Does this number matter? In 2007 US car sales were 7.5 million, by 2009, they were down to 5.4 million, a reduction of 2.1/7.5 = 28%, enough to bankrupt GM.
If Tesla can continue to raise production and get to anywhere near the levels that Ford reached in the first decades of the 20th century then GM & Ford have to deal with a big competitor that in a few years could put them into a 2008 type sales recession. If legacy go electric now then they have a big transition to cope with and will have to make large battery factories with some lead time that will delay them. If they delay the transition they can have their lunch and dinner eaten.
One can do similar sums in Europe, e.g. for the German auto industry. Only the Chinese who already have substantial electric production look to be untroubled if Tesla can start to make lots of electric cars.
If Tesla margins remain at around current levels they will make a very large amount of money and if they follow Ford and become more efficient so that they can both produce more and for less so that they can cut prices, the troubles for legacy auto get worse.
It is all well and good to argue that legacy auto can make cars, but for the moment they are not making enough electric and that imho makes them vulnerable to Tesla.
Of course the short interest in Tesla shows that many disagree with my thesis which is fine, but I have looked at the numbers and I am not arguing about what legacy auto can do, but about what they are doing and as I see things legacy is not doing enough and is too complacent.
Regards,