Has Elon Musk's Tesla already won?

TruckElectric

Well-known member
First Name
Bryan
Joined
Jun 16, 2020
Messages
590
Reaction score
795
Location
Texas
Vehicles
Dodge Ram diesel
Occupation
Retired
Country flag
Has Elon Musk's Tesla already won?

Tesla-versus-Toyota drama partly explains why Japan Inc. is stuck in first gear

opped-1597999480R20200821%20Elon%20Mask%20Shanghai.jpg

Elon Musk dances onstage during a delivery event for China-made Model 3 cars in Shanghai on Jan. 7: his operation is not hampered by the galaxy of moving parts. © Reuters

William Pesek is an award-winning Tokyo-based journalist and author of "Japanization: What the World Can Learn from Japan's Lost Decades."


As Elon Musk's Tesla blows the doors off Toyota, it is painfully clear how slow Japan Inc. has been to get the memo.

It is easy to get sidetracked by the spectacle surrounding a man of Howard Hughes-like eccentricity. Musk's Twitter feed alone is almost as nutty as @realDonaldTrump -- and apt to send Tesla shares for the occasional wild ride.


Even though it sells a fraction of the 10 million vehicles each that Toyota and Volkswagen do annually, Tesla's market capitalization is in overdrive. The most financially valuable auto company dwarfs the combined market cap of General Motors, Ford and Fiat Chrysler. Its roughly $370 billion valuation is equivalent to Hong Kong's annual gross domestic product. Fitting perhaps, with Tesla taking China's market by storm.

Not that Japan has noticed. Musk once hoped it would be his second-biggest market. Japan sales are such a small share of the 367,500 cars Tesla delivered in 2019 that it does not disclose them. Explanations why include: limited brand recognition; a small dealer network; questions about its capacity to service cars; a direct-to-customer model at odds with Japan's obsession with hospitality-centric shopping.

At the same time, Musk appears to confront a John DeLorean problem. Will posterity also remember Musk as a brash showman who couldn't deliver on his hyped vehicles? Clearly, Tesla's share-price-versus-sales ratio has many on Wall Street and in Silicon Valley with popcorn out waiting for the bubble to burst.

But forget the stock rallies and weird founder worship that fuel the Muskian cult of personality. The Tesla-versus-Toyota drama says a few things about why Japan Inc. is stuck in first gear as upstart economies throughout Asia shift upward.

One is a continued obsession with hardware over software. What Toyota long missed about Musk is that he is not selling cars. He is selling an iPhone with wheels. The vehicle itself is merely a medium to market the software undergirding the iTunes-like community that he is building.

The data Tesla collects from users, their environs, interests, tendencies, travel habits and the range of behaviors will arguably be more valuable than the engines and high-performance batteries powering them. This enables Tesla to hone the customer experience, while discerning where the market will veer next.

Tesla reminds Japan that disruption is a necessary evil for economic evolution. In a February 17 deep dive into Toyota's Tesla problem, the Nikkei Asian Review looked at Japan-centric worries about upending supply chains. Tesla makes its own chips and constantly tweaks its Model 3, Model S and Model X vehicles on the fly.

Musk's technology is the heart of Tesla's self-driving capabilities. It also makes Tesla less about engineers than programmers. Old-school car enthusiasts can quibble with this prioritizing. What is not in dispute is that it has Toyota looking over its shoulder.

Considering their vast talent pools and massive resources, Toyota, VW and their peers should have no problem catching up with Tesla before 2025. Japanese automakers, though, seem focused more on legacy than innovation. Toyota is proud of the global supply-chain system it helped pioneer. Each Toyota product contains components that create millions of jobs. Big automakers feel obliged to preserve a system for which Tesla has no use.

We can debate the merits of this sense of corporate responsibility. The fact remains, though, that Musk's operation is not hampered by this galaxy of moving parts. By keeping many of these functions in-house, Tesla can innovate 24/7 and implement a new technology tomorrow, not in 2025.

Tesla also reminds Japan where the real big money is: renewable energy. The story that got the most attention last week was the 27.8% annualized plunge in Japan's economy between April and June, wiping out any gains under Prime Minister Shinzo Abe since 2012. The most important, though, was news that Panasonic is plowing $100 million into electric-vehicle batteries for Tesla.

Admittedly, the Panasonic-Tesla relationship has had its rocky moments -- on Twitter, at least. But in 2014, when Musk was building his original $5 billion Gigafactory in the Nevada desert, the Japan Inc. icon was one of his first calls. Panasonic's decades of research and development on battery technology are now more valuable than ever.

-eng-GB%2FR20200821%20Tesla%20Gigafactory%20Nevada.jpg
Tesla's Gigafactory in Nevada, pictured in August 2018: Panasonic's decades of research and development on battery technology are now more valuable than ever. © Reuters

Panasonic is wisely strengthening its focus on the automotive battery industry that netted about $4.5 billion of sales in 2019. There is no reason why Panasonic cannot add a zero to that figure in short order. Or why Japan Inc. cannot add two or three zeros, raising living standards and economic growth.

Right in Japan's backyard, economic giants like China, India and Indonesia risk choking on rapid growth. The real opportunity is inventing carbon-neutral ways to power cars, airplanes, ships, homes, commercial buildings, you name it. Musk's Panasonic adoration reminds Japan that its technology once changed the world. And that it can do it again.

There is an argument that Musk has already won. That Japan, Germany and Detroit will never catch Tesla. And, frankly, there is a merit to this view. But this threat is also a catalyst for Toyota and peers to raise their games. Perhaps Japan Inc.'s, more broadly too.

Source: NIKKEI ASIAN REVIEW
 

MEDICALJMP

Well-known member
First Name
Jeff
Joined
Apr 28, 2020
Messages
397
Reaction score
631
Location
Omaha, NE
Vehicles
Toyota Avalon, Rav4, Tri-motor Cybertruck
Occupation
Nurse
Country flag
Musk is a Howard Hughes-like executive who doesn’t seem to have the germaphobic OCD or equivalent, yet. He gets in trouble most when his I-don’t-give-a-damn-what-anyone-thinks attitude butts heads with governmental regulations.

The article does make good points about Tesla’s nimble nature and how slow big auto is at mirroring their style. A failure to big auto’s detriment. His analogy is spot on. Tesla’s are iPhones on wheels. The short sellers don’t get it as the fundamentals of the stock are out of whack. Tesla would have lost money had there been no offset credits from other manufacturers. There are more parts to the rise of Tesla than just raw numbers of cars sold and credits. Cars, Cybertruck, battery technology, licensing of software and data, energy storage, and more.

Amazon lost millions and billions for way too many years growing their sales empire. I never invested in them as the fundamentals were not there, and then in a flash it became a cash behemoth. You can only run a business so long hemorrhaging cash. Amazon had a leader that inspired investors to plunk down money that, by the numbers, they were foolish to risk. Time, historic changes, and the right leader for the company altered our buying habits forever. Take away any single one of those and Amazon would be a forgotten memory of the dot com era.

Tesla is the same. Fundamentally the stock price is not justified. Yet we are at a historic moment where automobiles and technologies are becoming inseparable as in no other moment in history. The innovation of the company, vertical integration, an inspiring and brilliant leader, a desire by more and more people to alter the world environment be choosing what they drive, and many other parts of the puzzle make Tesla a smart risk investment now.

Japan, Detroit and the other traditional car makers beware. This is Preston Tucker reborn, with billions of dollars in his pocket and a watershed moment in history. You ain’t gonna strong arm him into oblivion.
 

Sirfun

Well-known member
First Name
Joe
Joined
Dec 28, 2019
Messages
540
Reaction score
800
Location
Oxnard, California
Vehicles
Toyota Avalon, Toyota Seinna, Ford E-250
Occupation
Retired Sheet Metal Worker
Country flag
Musk is a Howard Hughes-like executive who doesn’t seem to have the germaphobic OCD or equivalent, yet. He gets in trouble most when his I-don’t-give-a-damn-what-anyone-thinks attitude butts heads with governmental regulations.

The article does make good points about Tesla’s nimble nature and how slow big auto is at mirroring their style. A failure to big auto’s detriment. His analogy is spot on. Tesla’s are iPhones on wheels. The short sellers don’t get it as the fundamentals of the stock are out of whack. Tesla would have lost money had there been no offset credits from other manufacturers. There are more parts to the rise of Tesla than just raw numbers of cars sold and credits. Cars, Cybertruck, battery technology, licensing of software and data, energy storage, and more.

Amazon lost millions and billions for way too many years growing their sales empire. I never invested in them as the fundamentals were not there, and then in a flash it became a cash behemoth. You can only run a business so long hemorrhaging cash. Amazon had a leader that inspired investors to plunk down money that, by the numbers, they were foolish to risk. Time, historic changes, and the right leader for the company altered our buying habits forever. Take away any single one of those and Amazon would be a forgotten memory of the dot com era.

Tesla is the same. Fundamentally the stock price is not justified. Yet we are at a historic moment where automobiles and technologies are becoming inseparable as in no other moment in history. The innovation of the company, vertical integration, an inspiring and brilliant leader, a desire by more and more people to alter the world environment be choosing what they drive, and many other parts of the puzzle make Tesla a smart risk investment now.

Japan, Detroit and the other traditional car makers beware. This is Preston Tucker reborn, with billions of dollars in his pocket and a watershed moment in history. You ain’t gonna strong arm him into oblivion.
You are correct. The old school is in trouble, Elon Musk the visionary with a mind that never stops throwing out new ideas and ways of approaching problems now has Tens of BILLIONS at his disposal. That's how those bankers and industrialist put the brakes on Nicholas Tesla. They dried up his access to money. All that bankers and investors are always after is, how will this idea make me money and what will it do to my investments I already have. A visionary thinker like Elon Musk with his money, can just make commitments to ideas based on whether or not he thinks it's a good idea. For sure there will be mistakes but that's what it takes you can't let fear hold you back. BTW, they are NOT gonna go down without a fight. Just remember fear is a favorite tool to influence. This will get interesting.
 

Red61224

Well-known member
Joined
Jul 10, 2020
Messages
54
Reaction score
61
Location
Florida
Vehicles
No Thanks
Occupation
Amature Lizard Wrestler
Country flag
I understand that China has 150 EV manufacturers to compete against, and Tesla still holds 20% of the market share.
 

Advertisement












 


Advertisement


Top