Why Tesla could become the Microsoft of the auto industry

[TD1]

In many ways I agree with that analysis. However, I also want to point out that just like Google in the case of Apple, Samsung (and possibly other big players) could develop to be a serious competition to Tesla.

So maybe we in this forum are also way too focused on the "traditional" competition when we should watch out for Tata, Hyundai & Co. Frankly, I don't see the big three or the Germans do anything relevant in the coming years.

I think the fact that BMW focused on EV and has build the i3 and i8 from the ground up, and they still are no comparison to Tesla shows that its a very long way for the other companies to catch up.

The Tesla Investors shouldn't care to much about marketshare. Profitmargin is the key here.
Its like Android vs iOS, Android catched up and surpassed iOS in marketshare but still Apple is having and will have a much higher profit margin.

The majority of worldwide car sales are comparable to a commodity (people will choose the kind of car the want primarily on price basis) are based on almost 0 profit margin and the business model is to make a profit from service and carparts.

So Im confident that Teslas overall marketshare of all carsales per year will never be significant. But I can Imagine that Tesla will be the most profitable car manufacturer in the world (highest market cap)

 

[Convert2013]

I think the fact that BMW focused on EV and has build the i3 and i8 from the ground up, and they still are no comparison to Tesla shows that its a very long way for the other companies to catch up.

The Tesla Investors shouldn't care to much about marketshare. Profitmargin is the key here.
Its like Android vs iOS, Android catched up and surpassed iOS in marketshare but still Apple is having and will have a much higher profit margin.

The majority of worldwide car sales are comparable to a commodity (people will choose the kind of car the want primarily on price basis) are based on almost 0 profit margin and the business model is to make a profit from service and carparts.

So Im confident that Teslas overall marketshare of all carsales per year will never be significant. But I can Imagine that Tesla will be the most profitable car manufacturer in the world (highest market cap)

My thoughts EXACTLY.

 

[ecarfan]

It is inevitable that Tesla will have at least one serious EV competitor within three to six years. Which of the existing automakers will provide that competition is hard to predict but BMW and Nissan seem like possibilities.

It is very hard for any company to maintain a technological edge in a high tech mass market consumer product, as recent history has shown. That said, I am long on TSLA and am confident that the next car I buy after my Model S (which I won't be selling any time soon!) will be a Tesla.

 

[bonaire]

If I were to use software firm analogies, i would say Tesla is like the nearby company named Sybase back in the early years of the relational database industry. It had a better product set than the competition and took off like a rocket, including stock price early on. They also sold their software rights to Microsoft to build an NT version. It is called SQL Server. Sybase then had an up and down history for 15 years and eventually was dressed up for sale to SAP in 2011.

Tesla hasn't yet hit the stumbling blocks that Sybase hit early on. Well, maybe the three IoI (incidents of immolation) were akin to the Sybase problems with its System 10 database in 1993-4. In the same period, a freight train called Oracle stormed past Sybase. Sybase founders came out of Berkley and spent a lot of time with HQ in Emeryville before moving to Dublin, CA. They could have been much more successful in their history and Co Founder Mark Hoffman had a goal of the company becoming a 5 Billion dollar enterprise by 2000. This is much like the 500,000 target analysts put on Tesla. Another co founder is Dr. Bob Epstein, who is involved in some CA green works these days with E2 working on public policy.

Is Tesla the Sybase of the EV world? The Oracle? Hopefully, not the IBM...

The future is always more interesting than the past.

 

[Robert.Boston]

It seems to me that there is a fundamental difference in the business that can't be ignored: Tesla is a manufacturing company, whose technology is embodied in a physical product. The marginal cost for Microsoft to sell another copy of Windows or Word is approximately $0; another Model S, about $60,000. Once you've written the code, you can sell a million or billion copies of it with very little investment, while Tesla will need to invest billions to ramp from 25,000 cars/year to 250,000.

Moreover, once you buy Microsoft, there are serious switching costs if three years later you change OS; not so with cars.

Bottom line, it's harder to scale in the auto industry.

 

[woof]

Moreover, once you buy Microsoft, there are serious switching costs if three years later you change OS; not so with cars.

Bottom line, it's harder to scale in the auto industry.

Agree. However, the Supercharger network is closer to a Software as a Service analogy. Once you get hooked on Supercharging it's hard to switch--downright impossible a the moment!

 

[brianman]

Moreover, once you buy Microsoft, there are serious switching costs if three years later you change OS; not so with cars.

I think you might be wrong on this one. Switching from Tesla to any other car will probably give many people the shakes.