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Comment by raddad | Hacker News Reader

China owns GM.

http://qz.com/594984/the-secret-history-of-gms-chinese-bailo...;

Even more scary for Detroit, once the American public figures out Tesla is actually more American made than the big 3 they will feel no guilt in buying Teslas instead. This is especially the case if we start losing a bunch of coastal areas and the big 3 look apathetic about their role in global climate change.

Tesla's prices need to fall by at least 75% before Detroit has anything to worry about.

The infrastructure/economies of scale to make that profitable don't exist yet, but Tesla is working at setting them up. Elon Musk: "Model 3, our smaller and lower cost sedan will start production in about 2 years. Fully operational Gigafactory needed."

http://www.techinsider.io/we-now-know-when-teslas-cheaper-mo...

Two things are at play:

1. Tesla doesn't really give a crap about owning the entire market. If their competition causes the big 3 to build low cost zero-emissions vehicles, then Tesla has fulfilled their part of Elon's goals towards saving the world. Basically, putting a stake in the heart of the internal combustion engine and putting automotive economies of scale behind battery and energy storage development.

2. Cheap cars have awful margins, only worth playing in at scale. SUVs on the other hand are hideously profitable. The sport SUV has been the savior of BMW and Mercedes over the past decade, with high margins versus their cars. Porsche got in on this and built an SUV, now Lamborghini is too, margins are just too good to ignore.

Tesla's pursued an Intel-like tick-tock strategy, where they shoot at the high end to make money and get performance knowledge (Roadster, Model X) and with the cash reserves take their next model downmarket (Model S, Model 3).

Lower cost is still not interesting to Detroit unless it's well south of $50k. About the only thing they have in that price range is the Corvette, and I don't see Corvette buyers jumping to an alternative.

>Tesla doesn't really give a crap about owning the entire market. If their competition causes the big 3 to build low cost zero-emissions vehicles, then Tesla has fulfilled their part of Elon's goals towards saving the world.

Elon might not care, but as a publicly traded company Tesla is not going to say 'Mission Accomplished' and close up shop.

That's incorrect. Institutional money almost entirely controls GM. Along with the union.

China owns GM about as much as they own Apple. Guess what, America imports Chinese-made Apple phones. It's no different.

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