Following up on my theory of how legacy auto brands will still exist, but just possibly
not under the existing companies, well how I see this happening will be with significantly fewer
options of car models available. Each legacy auto manufacturer will need to pick just a few of their
best selling brands, or most renowned in history, that they can use to market to the consumer.
The brand may contain some prestige, familiarity, nostalgia, or brand loyalty.
To be clear all legacy auto models will have to have Tesla FSD and Tesla charging network access,
this is imperative. They are simply too big a competitive advantages,
for any competitors to circumvent.
And I think this has already begun. I have to hand it to Ford, they picked the Mustang and F-150.
I think Volkswagen are being remiss on not introducing an electric Beetle,
or an electric Porsche 911.
The recently announced Posrche Mission R looks like it will be ridiculously expensive.
And specifications are still far behind a model S Plaid, oh and this is for 2025. In other words,
if you spend a ridiculous amount of money probably well above $1/2m
on an electric Porsche sports car, then you will get worse performance
than what a model S Plaid large luxury family sedan, has today. Yea, legacy will never ever
beat Tesla on value and performance, oh nor range or technology for that matter.
Legacy autos will be able to get their costs down within time,
and there may not be enough Tesla's for everyone anyway. So you can buy an inferior
legacy brand that still drives itself and has just as good a supercharger network,
but the range, performance and safety will be lacking. It will also cost more, or at least offer
less value at the same price. But I think there are enough consumers that still want the luxury
of a Mercedes, or the elegance of a Lamborghini, or the class of an Aston Martin. And some of the
brands could make it too. But they wont offer many models. And some brands simply wont make the cut.
For example GM can get away with the electric Hummer, but only at 10,000 units a year or so,
but it might still be profitable, they could do something similar with the Corvette too, and maybe
the Silverado might have a market as well, but its possible that the F-150 already took that slot,
and there may not be a large enough market for the two of them, let alone an electric Dodge
Ram too. GM also have Cadillac which is possibly the right brand that can transition to electric,
but we are still talking low units. But after that I am running short of GM brands that people
would be willing to pay a premium for over a Tesla. GM has very little hope in my opinion.
And Ford probably only has a few brands too, perhaps they could release a Ford Bronco maybe.
But the mainstream models will just be eaten up by Tesla, if they are not offering something unique.
They all need to come out with their most classic brands,
and go electric with them. I can't believe Lamborghini just released a new Countach,
that is literally their most definitive brand. And they wasted it on ICE. That would have been the
perfect brand to electrify. I think Ferrari should bring out an electric Testarossa. It would be
really cool. I mean it would still be slower than a Plaid, but its still going to be very quick.
Quicker than any ICE Ferrari. Ok, we are talking very niche here, but BMW and Mercedes could get
away with some models. I think their brand carries enough prestige to attempt a premium price.
At least for some of their models. I mean I am talking about 3 to 5 models that people might be
willing to pay extra for. Compared to the 30 or so they currently offer. Yes 1/10th of what they all
offer now seems apt. Perhaps like Mercedes EQS, they probably do understand luxury better than
Tesla, and maybe some people are willing to pay twice as much for it over a higher spec'd Tesla.
Audi tried, with the E-Tron GT, seriously Audi can't get away
with that sort of price tag. The car was just based on the Porsche Taycan,
hence how they managed to release it so quickly, people will pay a lot for a Porsche,
but no so much for Audi badge. Porsche is a brand that could work well with electric.
But their range is just dreadful. To spend around $200,000 and only get about 200 miles of range,
is just not practical for a lot of people. Of course the actual range you get will be
significantly lower in practice. But how many people own Porsches? Not many, its a small market.
I mean we are starting to witness just how long it takes to research, develop, design
and put into manufacturing an EV built electric from the ground up.
If they want them succeed, they can't rush them out, especially when they are going
to be demanding such a premium price from consumers. I mean Ford did design the F-150
around all sorts of utility, that they know their customers will want. They do still have
valuable market research and experience in their intellectual property, than can be of benefit.
I think the Japanese are finished though. They went all in on hybrid. And are leaving
it far too late to move over to EVs. Honda are relying on GM even, how ridiculous is that?
A Toyota is a great value car, but that's what Tesla will be, especially with Model 2. They're
awful to drive too. But maybe a company can buy some of their brands of them, and
start an electric Toyota Supra, or LandCruiser. Toyota should have really started electrifying
their Lexus brand, but I think they have left it too late now. It takes a long time
to get battery supply, especially when you haven't even begun plans for a battery plant.
Which even US legacy autos took the initiative of. I think by the time they ever get around to EVs,
then the market will be too saturated. In the meantime maybe they will continue to sell hybrids,
but demand will surely dwindle, and they will lose economies of scale.
Of course Rolls Royce was an ideal manufacturer to get in on EVs early.
What's more luxurious than a silent motor, with heaps of torque. They are hand built,
in low production quantity, and charge an absolute premium.
I just don't understand how these companies missed this, what were they thinking.
Jaguar has a chance, customers seem to like the E Pace SUV. Jaguar were actually one of the first to
market with electric cars. It was even somewhat concerning as an investor how fast they did it,
and I thought the others might follow suit. But it wasn't built electric from the ground up,
and was just added on to the I Pace. But Jaguar would do exceedingly well
if they brought out a new sports car, and the most obvious brand they could do that
under would the E Type. This was their most iconic car. And of course it actually has E in the name.
Basically when you put it altogether, there maybe in the region of 30 or so legacy models that
might make the cut. In niches that are different from Tesla, with brands that people are willing
to pay a premium. Their range will obviously be lacking compared to Tesla, but within time should
approach 300 miles, which is sufficient when the charging network has matured. Or even 250 miles.
There may be a market for some cheaper EVs too, as Tesla are really going to only target
the compact market, at the lower price point. But perhaps the likes of Hyundai could come in
at low price point to offer cheaper EV cross overs. Perhaps with just 250 miles of range.
And Tesla are not offering an affordable sports car,
convertible, or station wagon, so there are definitely some segments available.
But I can't think of many other brands that might work, perhaps Sony or Apple.
But it takes a long time to scale up battery production. And
I think at the end of the day, enough people will want more choice than just Tesla.
I think we are talking small numbers here, perhaps up to 10 million units a year for legacy autos
globally, or maybe I am being too generous, perhaps its close to 5 million, higher priced
vehicles, and Robotaxis will mean the aggregate demand drops as a result. The rest will be the
Chinese, Tesla and Tesla's Robotaxi network. Oh right the Chinese, wont people just buy Chinese
EVs over the legacy autos, as they are much better value. Well I would say the governments would use
protectionism and mercantilism and place tariffs on Chinese imported EVs, and/or offer incentives
to domestic EVs. I think this will be done to try and save the existing legacy industry as it is.
But some consumers simply have a budget of $50 to 60,000 for a car,
or even $200,000. Therefore they are not interested in a Chinese car for $30,000, just
because its cheap. And likewise, they may want an electric Ferrari over a Model S, or perhaps even
a Roadster. Cheapest doesn't mean everything. Also I don't think the Chinese can scale as
fast as Tesla, and Tesla will secure the most market share once it has saturated.
But look I do continually say, it would be a boring world if everyone only drove Teslas.
I was a big car guy, so I genuinely hope I see some of these iconic brands
electrified one day. Although I do also kind of hope the companies that run them
are not the same today. In other words, I think it's still only fair
that legacy autos still go bankrupt first. I think they deserve to. And I don't think it's
fair that tax payers should have to bail them out once again, for their own inept business acumen.
Whether Tesla also end up supplying the batteries, motors, drivetrain, etc as well, is a different
story. But they possibly won't. A Tesla battery is more valuable to Tesla. And don't forget all these
cars will be paying $200 a month on FSD too. Wow it sure does feel good to be a Tesla shareholder.
Thanks