Telsa is getting hot these days! People are falling in love with it, and stocks are high-flying too.
However, there are quite a few nay-sayers. Some say competitions from i3 will be a serious threat, others say fuel cell cars will kill Tesla and other electric cars too.
These people are really missing the basics.
Comparing “fuel cell” with “battery” is missing the point, because the game is not about new energy, not about saving the environment, and not about protecting the planet. None of them is the center of the game.
Yes, people all say we need to protect our environment, but how many of them would spend $10,000 more to actually do that? That is exactly why no electric cars were successful before Tesla.
While Nissan Leaf got some sales, it has pretty much relied on government incentives. That is not sustainable.
The real game here is all about “cost” and “value”, that is what business is always about. Here the value could be the car performance, look and feel, and brand name, basically any kind of user experience.
The reason Tesla is successful is not because it is an electric car, it is because it has so many innovations and it paid so much attention to user experience. The price is high, but the value is higher.
So comparing Tesla with Fuel Cell cars is missing the point, since Tesla’s success has nothing to do with being an electric car. In fact, if Telsa is a hybrid car or gasoline car, it would be even more successful.
So what are the barriers of Telsa’s eventual take-over now? I believe there are 3 barriers:
1. In short term and mid-term, it is the battery production capacity.
Since order and demand is not a problem, the current Model S production is only limited by the amount of battery Tesla can get.
2. In mid-term and long term, it is the price of the car.
In fact, this is the most important barrier of all. And what haunts all the new energy car all the time. Tesla could get away, only because Musk is super smart on providing a car with such a high value. Eventually, it has to bring the cost down though, in order to bring EV to regular people’s life.
3. In long term, it is the charging network.
For now, Tesla can build a bare-bone network to connect US or maybe other countries, but once the third generation is out, it won’t be enough to support all the cars on the road. Either Tesla has to spend a lot more to build charger station, or third party has to do it.
Interestingly, Elon Musk are addressing all the 3 barriers head on! (Apparently he is fully aware of them.)
He built gigafactory to solve the first problem. He planned third generation to solve the second problem. And he just shared his patent for supercharger for addressing the third problem.
It is a smart move to share supercharger technology, since we need third party to build chargers, and not rely on Tesla alone. The charger from other parties could charge a small fee ($5 for example) since nobody need to use it too often, they only need it when going long trips, and $5 is more than enough to cover the cost of building the stations. Waiting 20 minutes or whatever time to get to enough energy to destination is not that bad, but waiting in long line to get charged is a big trouble ahead of EV owners.
Still, #3 is not the largest barrier, since many family has multiple cars and they can keep Tesla at home when going on long trips.
With all the information I currently have now, I just don’t see how the big car companies can catch up Telsa before its third generation car is out. And once it is out, we will see a major take-over through-out the world, as so many people are eagerly waiting for it now. At that time, it is quite possible we are back to the constraint #1 (the battery production problem) again.