Tesla DemandJune 19th, 2019
Do people demand the best? If so, then Tesla has ample demand. The cars are spreading out, I see new ones all the time.
Colleagues ask me if they can ride in my car. They don't advertise but instead generate ample positive organic content.
The things they do are incredible enough for people to spread them around.
Not only do they have demand they have production. Steadily increasing production. And they are working on more production. And plans for more production.
One major aspect to the cars is the savings which occur from fuel. Drop the price about $1 for every 10 Kms. Driving 300K Km? Expect to save $30K.
It's easy to say there is demand now that Elon has shown it. But a few weeks ago such an idea was very unpopular on TV.
TV? Do people still use that? Funny thing what happens when you don't - all that time you spent watching commercials is now potentially productive.
It also allows you much better control over the message the authority figures give you. The stories you must believe, and they will repeat over and over again until you start to believe it. The story that Tesla has a demand problem, just look at Q1 deliveries!
So demand is not a problem. If it was, it would be the worst problem. But if we can't say that anymore without looking like complete nincompoops, what do we say? What is next best? Spends too much money? They are building a new factory which costs money. Now is a great time to say they are in trouble because they are losing money. Hopefully for the shorts they do. But if they don't, and they can get people to believe their demand bullshit, what else is there? China uncertainty? Donald Trump policies? All way less good reasons than demand.
Demand is really the most important thing. With it, you can sell your expensive product. Without it... you are left manufacturing an expensive product nobody wants.
What if Tesla takes market share? What happens if they do it for a year before others catch up? What happens if it takes longer?
Can other car companies afford to sustain a shrinking market until they can produce a competitive electric car? What happens if when they get to where Tesla is now, Tesla is even further ahead? And pulling away.
What happens to the dealerships, the insurance companies, the manufacturers, mechanics, when ICE gets phased out? All cost money to run? What happens when the website hosts, webmasters, advertisers that run all the advertising for dealerships?
What happens to the gas stations? Tesla is poised to punish any business which currently absorbs those costs strictly by not paying for any of it.
One website. Service Centres instead of dealerships. Social Media presence so strong, no paid ad budget exists. By having a single website per country, Tesla can change the offers they have. And then again 5 minutes later. They have the best flexibility in terms of cost. And the price of their cars? How about $9K more for flipping the switch from Autopilot to FSD.
$9K more on the car after purchase. Do you think Tesla is really sorry they went that way? Do you think putting their efforts into franchising would be better? How about drivers who now begin to save $9K on fuel and are looking for a way to get a little more out of life?
They may not have put their money in gas stations, but they sort of did. Tesla continues to grow and expand their Supercharging Network.
Tesla is taking market share. How much share will they take? So far is seems to be as much as they can make.
If these other car companies don't adjust drastically, they will be crushed. So long as Tesla stays ahead, their cars are better in every way. Their costs are lower in every way. They don't depend on big trucks carrying tonnes of gasoline to keep things running. They don't depend on Sales Persons to keep things selling. Autonomy could be a knock-out blow for these other manufacturers.
If you were them, what would you do to survive? Well, you can't just nix everything and start over. So you can't compete. But maybe if you start buying up their employees... But Jesus Christ there are 40,000+ of them! How do you find the good ones? Maybe the ones with high titles!
Other car companies need some way to not die. They hope to get a core piece of Tesla by hiring away their top directors.
Does it slow Tesla down? Yes. A little. 1/40,000. Maybe even 2 or 3. An expensive way to hurt Tesla though in terms of time investment, relationship building, paying way more.
So what does Tesla do? If I were Tesla, I would start giving the interns title's like "Director of Manufacturing" or "Vice President of Sales". It will become known that "Vice President" means intern internally. And it would make it very difficult to decipher who is useful or not on LinkedIn.
In the meantime, who wouldn't leave their position for 4X the salary?
I would love to watch Tesla implement my intern suggestion. I can see the headline now "Telsa loses 10,000 Directors and 5,000 Vice Presidents". There you go FUD, you're welcome!
I am long TSLA and TSLA options. I am not a financial advisor. Investing in anything comes with inherent risk. This is not financial advice.
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