An offshoot of the "it can't be done" crowd is the "if Tesla can do it, others can do it just as well" crowd. These people don't think Tesla has anything special, they are rooting for someone, anyone other than Tesla, to succeed. And I get that - it would be nice if all automakers could flip a switch and churn out EV's in large enough numbers to meet all the demand right now. But, these people should be careful for what they wish for. Because at the point there are enough EV's to satisfy demand, the emperor will not be able to hide behind low volumes while using ICE sales to cover up the problem. The problem is the cost to produce. It is impossible to offer good value when your company is inefficient at manufacturing.
Legacy auto could claim to be efficient at manufacturing ICE cars because there was no one to show them what was possible. There was no Tesla of the ICE world to illuminate just how archaic and inefficient automaking had become. It's easy to look good when you are surrounded by a field of equally incompetent manufacturers bringing poor value to consumers worldwide. Huge barriers to entry protected their incompetence.
The transition to EV provided the private investment capital for a new company to enter the race. Tesla knew they had to try harder and offer more to scale the barriers erected by the status quo and that caused them to reimagine what an auto could be and how it could be made at lower cost. Most of us here have profited handsomely by realizing that Tesla does have something special. And as time goes on, the difference between Tesla and the rest becomes more and more apparent, not less. Remember when people said the others will catch up to Tesla? Those people don't understand, it's not just about making a car with certain specs, it's about offering real value. They don't understand that not all manufacturers are equal.
The impressive P&D numbers released yesterday are not the really important thing, at least not directly. The reason the P&D numbers are important is what they reveal about Tesla. This is the best demonstration yet of Tesla's ability to make more with less and that is what drives down the cost for consumers. In four weeks, that will show up as enviable margins in the release of the 2021 financials. Those industry leading margins, even before Tesla has reached volumes measured in millions per year, are just the tip of the iceberg that has big, bloated legacy auto running scared. If Tesla can increase production and reduce cost per car that easily now, how can they compete on price when Tesla has economies of scale of millions of units per year and the EV market starts to become saturated? Because Tesla's cost to produce advantage will continue to increase with the application of new production technologies and increasing production volumes will multiply those effects. Legacy auto debt will grow as they struggle to modernize and keep up and huge debt works against the goal of low cost to produce. Anyone who thinks others will be able to keep up on that most important metric, cost to produce, must be smoking crack.
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