Tesla’s battery day affirms Wright’s Law and spells trouble for the competition

This can already be seen when looking at existing competition. VW’s ID4 compact SUV will cost $40k pre-subsidy when introduced next year, vs Tesla’s model Y at the same price.

VW itself isn’t a luxury brand, unlike Tesla, and wouldn’t normally be compared. The audis, BMWs etc would likely produce a more expensive car. The most comparable luxury brand cars are Porsche’s taycan which starts at $100k vs Tesla’s model S at ~$75k, polestar (Volvos electric brand), Jaguar I-pace, Audi etron etc which are all substantially more expensive while typically delivering less range and a worse software experience (which i’d say is the new panel gap).

All in all this looks to me very much like the smart phone transition when apple and Samsung/google took over the market. Maybe 1-2 of the old guard will survive, with everyone else ending in the slaughterhouse.

This is a point that has more value than IP itself.

Being ahead allows you to protect your research about some new tech that no one is looking at, ok.

But just having to figure details in a factory is the real thing, it's what makes difference. Quality is a product of repetition with near perfection. Figuring it out is time consuming, see Intel x TMSC.

There are quite a number of laggards in the market making decent money, and some probably have better margins than the competitors at the bleeding edge.

Tesla needs as much driving data as possible.

Every of order of magnitude makes it that much harder for competitors to reach.

Once they get a critical amount, the AI of driverless will fall into place.

They will be subsidizing low cost vehicles just to get the driver data.

I don't care that other car companies cannot compete. There will be car companies that can, eventually. There may even be new car companies that doesn't exist yet competing!

These plans eventually lead to the stock price shooting up ten-fold in anticipation.

They could get battery cost down to zero and it wouldn't be as profitable as what they were talking about just last year.

The announcement at this new event of a $25,000 car available for sale to consumers because people don't all have enough for the model 3 doesn't make any sense given what was promised last year. It could add to the Robotaxi fleet, but would make no sense to sell to consumers without enough money when it could be operating as an automated taxi driver earning Tesla money instead.

One thing Musk says in this new presentation is that all manufacturers will eventually have autonomy, so this battery stuff is what really makes Tesla a valuable company. But the timeframe doesn't make sense. Either Tesla has some decent exclusivity period on autonomy, or autonomy isn't worth much to people buying FSD now, because there will be lots of Robotaxi competition. And in the case of a decent exclusivity period on autonomy, none of these margin improvements matter and the near term release of a $25,000 car to consumers is a huge mistake.

Go back and watch autonomy investor day and see if any of it holds up to scrutiny.