A quote from Elon on the Q! conference call | TSLA Message Board Posts

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Msg  2339 of 2396  at  4/22/2023 3:10:25 PM  by


A quote from Elon on the Q! conference call

Elon: "“Actually, this one — assuming I could wax on about for a while because really, people didn’t understand that the best short-selling argument against Tesla for the longest time was the fact that Tesla does not have an existing fleet and that the auto industry, the reason incumbents succeed and newcomers fail, the biggest reason is that the incumbents have a large fleet, and they’re able to sell new cars at close to zero margin and then sell spare parts at a very high margin, sort of razors and blades type thing. And so the only way to actually succeed for a newcomer to succeed is to have a product that is so compelling that people are willing to pay a premium over the incumbent product.”

So with Tesla lowering prices, and they now have a fleet, why would they do that? Economy is slowing and they'd like to keep their factories humming for sure. Why else? Tesla believes that their software and autonomy are far advanced from competitors. Interestingly, is the cost for software and FSD are sunk costs. One time in terms of R&D. Then the cost for duplicating the software or FSD is next to nothing once developed. Elon has actually said he will be willing to sell or license FSD to competitors if successfully developed. That could have a profound affect on the margins of Tesla if developed and approved by regulators. BIG if, but with DOJO, Tesla is documenting millions of driven miles and regulators would have a tough time not approving something that is proven to be safer than a human driver. Big If, I understand that, but I think Tesla is trying to increase the fleet so they can have a monumental amount of data documented to present to regulators if/when they solve FSD.

Now, because they also have superior margins, they know that the "so called competition" is struggling in terms of profitability and scaling so if competitors can't compete they fold. Is it a coincidence that "Project Highland
is the name for an internal project for the Model3 of reducing costs and improving manufacturing efficiencies. Is it a coincidence of what Henry Ford did with Ford's cost structure with the "Highland Park" manufacturing line? He reduced the vehicle costs dramatically, improved quality, profitability and consequently some competitors failed and Ford dominated. Is the internal name, "Project Highland" a mere coincidence? Elon is a student of History. Stay tuned, it's about to get interesting!

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