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Tesla's Competitors Should Be More Concerned Than Ever

Industry News / Comments

Mainstream automakers beware.

There was a time when auto industry and Wall Street analysts didn't think Tesla was going to make it. The EV automaker was burning through too much money. It wasn't selling cars at a profit and Tesla Model 3 production was a mess. If there's a lesson to be learned here it's this: never underestimate Elon Musk.

CNBC has an interesting report claiming Tesla has become an "existential risk" to legacy automakers, meaning mainstream brands. Oppenheimer analyst Colin Rusch went on record claiming Tesla, perhaps for the first time ever, is causing established automakers genuine concern. Model 3 production operating as it should with stellar sales in the US and overseas (it was the best-selling EV in the world in the first 11 months of 2019), while Tesla quickly set up shop in the world's largest automotive market, China. Not only does Tesla sell its cars there, but built a new Gigafacoty in Shanghai in only 10 months.

2020 Tesla Roadster Front View Driving Tesla
2021 Tesla Cybertruck Front Angle View Tesla
2021 Tesla Cybertruck Side View Tesla

This factory is already building cars and will soon increase production to over 1,000 vehicles weekly. "First ground to first car was less than a year. I think that put a lot of automakers on notice," Rusch said.

Last Monday, Tesla shares went past $500 for the first time ever. The stock was up by more than 8 percent from where it closed last Friday. It has risen more than 100 percent since last September. For a company - any company's - stock to increase that much in such a short amount of time is beyond impressive. Tesla's market capitalization is now above $90 billion. To give you a better idea just how incredible that figure is, it's over $3 billion more than GM and Ford combined. The Model 3 is now the EV all automakers, including Ford, GM, and Volkswagen, are trying to emulate. This not only includes driving range but also design.

"And what we were looking at is designs very similar to the Tesla Model 3 coming out two, three years from now," Rusch added.

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2017-2019 Tesla Model 3 Front View Driving Tesla
2017-2019 Tesla Model 3 Side View Driving Tesla
2017-2019 Tesla Model 3 Side View Tesla
2017-2019 Tesla Model S P100D Front View Driving Tesla
2017-2019 Tesla Model S P100D Front Angle View Tesla

"So our conclusion is that, given some time, Tesla having a little more risk tolerance as an organization and being able to learn from its mistakes, that they're going to continue to evolve ahead of their competition."

There's another vital factor: Tesla has more EVs - over 600,000 - on the road than any other automaker. This means it's positioned to have a huge data advantage over competitors, thus placing it ahead in autonomous vehicle development. Electric vehicles and autonomous driving technology are the two main areas of focus for automakers today and for the foreseeable future.

Tesla, a company founded in 2003 that launched its first vehicle in 2008, is now setting the pace for the entire auto industry.

2016-2019 Tesla Model X Front View Driving Tesla
2016-2019 Tesla Model X Front Angle View Tesla
2021 Tesla Model Y Front View Tesla
2021 Tesla Model Y Rear View Tesla

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2017-2019 Tesla Model S P100D Front Angle View
2017-2019 Tesla Model S P100D Front View Driving
2017-2019 Tesla Model 3 Side View
2020 Tesla Roadster Front View Driving
2017-2019 Tesla Model 3 Side View Driving
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