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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
When considering these analogies the indisputable fact is that Tesla is built using current programming languages, with (I think and hope) very complete documentation. Even for 'the machine that builds the machine' there is almost incalculable advantage in having everything written in similar and current languages with everything documented.
We sometimes moan about vehicle software/firmware updates being imperfect. When there is a new update of some sort almost every week the pace of change is unprecedented, even for Silicon Valley. At that we have an integrated manufacturing OS, something NOBODY else has. That requires constant tinkering, constant documentation and constant communication fo the changes.
Most legacy automakers, most component manufacturers and most other suppliers use a jumble of ancient mainframe core systems built on now-obsolete languages which frequently have no/minimal documentation and equally often no loving person who was around when they were built. I have personally been involved in several conversions of such systems. The process of replacement takes years and often legacy systems must continue because nobody knows for certain what essential functions might be negatively affected. This turning them off is the only way to know for sure what they do regarding essential functions.
As we consider the fundamental difference between Tesla and all others this is perhaps the single largest impediment to OTA updates, BEV design excellence and direct vehicle monitoring, as in FSD or defect correction, both of which require constant vehicle communication. Thus the legacy automakers and power generation/distribution providers are all severely handicapped.
So, where is the competition? Obviously, China! It has much less to do with State control or intellectual property theft than it has to do with brand new infrastructure and brand new systems. Who can innovate faster BYD founded 2003, Geely-1997, Chery 1989, CATL-2011. So it stands to reason that 2003- vintage Tesla has more affinity with other upstarts than it has with ancient behemoths.
When we look back a few years we find Japan first, then Korea and Taiwan, then China more or less in order leading the process of upsetting established tradition. Going further we find endless examples of established leaders becoming complacent and losing their leadership. Any of us who have studied world history know it is not just about industry, as visits to Isfahan, Athens or Rome teach us.
As investors we need always to look for disruptors and know that the risks of disruption are high, but the risks of tradition are higher. I hope this is not OT.
Fact Checking
Well-Known Member
Indeed, and Exhibit 1 is the ID.3: did you guys notice that for the past 12 months the ID.3 was always about 6 months away from shipping? First it was November 2019, then early 2020, then spring of 2020, summer of 2020 and yesterday they slipped to September-October 2020.
If this is all due to software delays, then this sounds like a train wreck of a software project, which Diess's proclaimed fix of hiring thousands of more software developers will make worse.
Right. I read that book about 30 years ago. Found like 30 copies of the Dutch edition in a bookstore that sells overstock 25 years ago, and bought 3 of them with the intention to give them away to my managers during the remainder of my career. I’m really sorry I didn’t buy all 30 copies, as I ran out of copies in only a couple of years.
BTW: the sad thing is, this is a true story, I’m not making this up.
Edit: to make this relevant to TSLA: I have the impression, having worked as a software developer in Belgium for almost 3 decades, that nobody has read ‘The mythical man month’ (or at least, that nobody adapts their behavior accordingly). Which is why I’m very sceptical that VW can overcome their software issues in a timely manner. I haven’t worked in the USA/Silicon Valley, but I have the impression that the software developent managers behave much more appropriately, hence a big advantage to Tesla.
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Chickenlittle
Banned
They are paying someone else to make software. Short sighted in my opinion. They don’t see the software part of the car as a product they offer but only as a part like a windshield wiper. At the end of day they end up (perhaps) with software but no expertise in making the software. That will hamper future software development for them
ZachF
Active Member
It really is a company like Rolex saying they are going to build a better apple watch than apple. "They're both watches though!"
ZachF
Active Member
Outsource the software
Outsource the battery cells
Outsource the pack manufacturing
Outsource the Body manaufacturing
Outsource the....
....And we need VW for what now? How is VW going to compete with Tesla if they are basically just a glorified middle man?
Sure just check out the history of MG, Rover, Jaguar, Austin, Morris, and so on. For that matter check any of the basic industries from Steel to Oil to power generation and distribution. Lately we can think of Postal Services and telephone companies. Have I forgotten about retailing?
Changing technology changes the world as we thought we knew it? The changes are more rapid.
Why do we think the legacy automakers might survive? The brands will, but the ownership, control and products will change.
Remember that London Taxi and Volvo are Chinese, MG is too. New smaller BEV's from BMW, MB and many others are Chinese. GM's small cars are now Chinese. Legacy cannot design with innovation. Cheap labor is a self-serving excuse. These days even Chinese ICE are often better.
I stop with my history diatribes now and head off to buy more TSLA.
2virgule5
Member
Yes, and yet he is probably the most aware of legacy OEM CEO on what’s to come, which says a lot about the state of disarray in the ranks of this dying industry ..
As we have seen times and times over again, Tesla is able to increase range, performance, and charging capability, not with new model years, leaving current owners in the dust, but by software upgrade. At Tesla, software is another dimension, leveraging engineering advancement. At VW, it's a checkbox. They lose.
VW has value there If the middle man has the money to fund all the outsourced development.The 3rd parties aren't going to do it on their own.
Words of HABIT
Active Member
"The future will be electric in the passenger car world for sure, I think it is pretty clear now and this train is moving. it is gaining speed, gaining momentum." Herbert Diess, VW CEO, January 24th, 2020.
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SageBrush
REJECT Fascism
Or Korean
Although of interest both Jaguar (TATA ownership) and Audi outsourced their EV R&D to an Austrian company IIRC
My WAG is that the most blockbuster deal of the decade coming up will be purchase of RIMAC by a legacy
Here is current RIMAC ownership:
- Mate Rimac (47.7%)[1]
- Porsche (15.5%)[2]
- Camel Group (14%)[1]
- Hyundai (11%)[1]
- Kia (2.7%)[1]
I know that this seems off-topic, but I view RIMAC as one of the few true competitors to Tesla in IP.
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I'd also argue that legacy automakers really just market, service, and assemble cars now anyway. Parts are outsourced for the most part. Most do engines in house but they often buy third parties or share drivetrains. The new supra and Zs for example.
JRP3
Hyperactive Member
Rimac is tiny and low volume production. Mate wants to focus on supercars. The key to EV's is cell chemistry, something Rimac doesn't handle. They may get bought but I don't see it as a "blockbuster deal of the decade".
Krugerrand
Meow
Going to take more than money. What you’re suggesting is putting a child in charge of Mr. Potato Head. Just because all the parts are available doesn’t mean they fit or can be fit (even with a lot of money) into a cohesive and recognizable Mr. Potato Head that Mrs. Potato Head wants to stay married to.
Krugerrand
Meow
Yeah, great comment. Just a decade too late.
TheTalkingMule
Distributed Energy Enthusiast
It almost feels like they shift all profits out of the OEM, to equipment vendors, component vendors, dealerships, and designed the “car company” to lose money while employ vast amounts of low skill workers, so they can continuously harvest taxpayer’s money to bail them out.
Seems true for any big auto in any country.
Again, conspiracy theorist speaking, I could be wrong, it’s just a hard business.
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