thanks for posting this.
could be pretty significant.
I might be missing something on this, but, isn’t it also quite possible that with these rules about to come into effect Peugeot already has a plan in place?
PSA already had a deficit prior to buying Opel/Vauxhall. GME had done nearly nothing to prepare so PSA is in deep trouble already, prior to expected EU tightening. FCA is not really much better. Thus the Tesla deal becomes more important but much more important than that deal is the platform preparation FCA needs. The combination is in a dominant position for small urban passenger and delivery vehicles in Southern Europe and is EU-dominant in, for example, camper conversions and a fair number of other specialized commercial vehicles.
Right now FCA/PSA is in such horrible shape that this combination seems much like BMC. Those who remember BMC know how bad that was. Just as BMC tried rebadged Honda, as one example, Tavares is rapidly making Opel/Vauxhall into rebadged Peugeot. That defers disaster. In the meantime FCA survives in large part due to Jeep, itself poorly prepared for 2030.
Those who speculate Tesla to the rescue rather miss the point. There will be no rescue of the horrible mess. However, Tesla can obviously make substantial profits selling credits to them, so long as they have the cash to pay.
This is painful for me to say because I am largely a fan of both Elkann and Tavares, for quite different reasons. They simply are merging while agreeing not to shut factories, many of which date back >50 years and are very resistant to reform. Both of them have aging, inflexible workforces, most of which are in Italy, France and Germany. That transition will be almost impossible.
When considering VAG, Toyota, GM, Ford, Renault/Nissan/Mitsubishi we have variations on the same themes, but none are well-prepared. VAG at least understands platform management better than anyone else.
When we look at the best hopes for real advances we see embarrassing efforts from JLR, VAG, GM and Ford. None are really good enough. All are too expensive. The I-Pace, e-tron, Taycan and Mach-E are all very pretty and some are great to drive too. None have enough range, none understand the critical role of OTA, none actually have the capacity even if they had had none of the other issues. None can surmount dealer problems.
These comments could perhaps be in competition threads. However, the core reality is that no matter what else happens Tesla now has a vehicle lineup that is better than ICE for maybe 10% of total vehicle purchasers. Were Tesla to have that market share they would be one of the largest four vehicle manufacturers:
Focus2move| World Car Group Ranking in the 2019
I do not suggest that such will actually happen. I do think Tesla has three gigantic challenges. In order:
1. Vehicle distribution- Tesla need much improved distribution in every single market, including California and Norway.
2. Model range- Tesla needs upwards of 25 different models. They can do that with modular techniques, just as they now do. They have the skills and ideas to do that.
3. Manufacturing/assembly- Elon has spoken of ~100 Gigafactories. If anything he could be underestimating.
I did not mention technology of any kind simply because nothing technological is an impediment for Tesla so long as they continue to do what they are doing. Their advances are almost faster than humans can absorb the improvements now, they only need to keep doing that.
Zero mention of Tesla Energy even though it stands to be bigger than vehicles. Why not? Simply because the only impediment to exponential growth in TE is the ability to scale manufacturing/assembly. In TE the market economics and reliability are already proven. The ability to deliver solutions faster than any competitive technology is also proven. Scaling is only in capacity. In that arena all the competitors combined can succeed for decades to come without saturating the demand. After all this is replacing more than 100 years of fossils.
What could impede TE? How about fusion? That has been 35 years away since ~1950 and it still is. If it happens the energy storage needs will still grow, perhaps even faster.
My conclusion is that the only real impediment to continued growth for decades to come is loss of vision, perhaps engendered by volatility but definitely driven by anti-science politics. If those happen there will be no safe haven anyway.
As a hopeful and hopefully rational person I am determined to do all I can to promote Tesla.
I understand enough of the market dynamics and mechanics to know that all short term market movements detract from dedication to the mission. Were it not for the insatiable need for external capital being private would be much much better.
SpaceX might well be the superior model. OTOH, when the industrial scale is on the order of VAG, Toyota and FCA/PSA it's highly unlikely that such can be achieved without some public ownership.
If TSLA does not go below 375 during the next month I'll probably double my TSLA bet. I wanted to do that six months ago, but I could not liquidate other long term assets quickly enough to do that. This time we will see massive expansion during the next two years. Failure to have continuing cash flow positive, GAAP positive results is less likely now, even as the Tesla US vehicle market share might well stagnate until Model Y and Cybertruck begin deliveries.
