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Tesla hits Model 3 production speed bumps, slides to loss

Anonymous Coward
Anonymous Coward

I agree with some of what you have said but not other parts. A new car entrant is going to really struggle with market penetration and brand awareness. It is pretty significant that Tesla is the most well know EV manufacturer that the more established manufacturers are trying to catch up with. Just the fact that there are 500,000 awaiting order who have been prepared to put down a deposit (albeit a soft deposit) is quite impressive and unique.

When you mention other established car manufacturers have spent decades of experience getting supply chains and production line right. Tesla can but expertise in this are in, but also they can look at it with a new set of eyes, question what has gone before and forge a new way of doing things. Who'd have given them any hope with SpaceX - existing suppliers, high cost of entry, don't understand the complexities etc. Look at how Apple manage to coerce the Cellular networks to fight over the rights to sell the iphone, profit shared their contract revenue which the existing suppliers never could.

Just to achieve what they have in terms of car technology in such a relatively short period is pretty amazing.

The other comment about their range of cars - possibly not such a major issue. There is a psychological principle confirmed with experiments* that showed greater choice can be demotivating and lead to less overall sales. A smaller range can actually increase sales as long as it covers a wide enough range of use cases. Sure they lack a pickup, which could stifle growth in some regions but general commuter cars with a regular western nuclear family would be catered for. Once again look at Apple with their limited choice of handsets which often worked in their favour as the choice was easier.

I doubt Tesla will give up unless they get some real long term obstacles - major issues with their product or ongoing long term production run issues, or major shareholder rejection.

*Iyengar, S. S., & Lepper, M. R. (2000). When choice is demotivating: Can one desire too much of a good thing? Journal of Personality and Social Psychology, 79(6), 995-1006.

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