Published on November 8th, 2019 | by Johnna Crider0
Tesla Bull Talks Tesla’s Big Competitive Moat
November 8th, 2019 by Johnna Crider
A Tesla bull named David recently addressed Tesla’s competitive moat in a Medium article. He actually wrote the article for friends who seem to think Tesla is just an electric car company that will most likely fail, but then decided to share with the world. David makes several good points in his article and sums up the mentality that people, especially the shorts, have about Tesla:
“It seems like the dominant notion is that Tesla is just another car company in a tough market which is dominated by titans, and so Tesla may not survive.” —David.
Tesla, however, has surrounded itself with a competitive moat that many can’t seem to swim across. Three things that David talks about in his article actually form Tesla’s competitive moat, and other companies — not just automakers — can learn from this. Several key points David covers in his article are:
- The type of company Tesla really is
- The location of Tesla
- Tesla’s Advantage
I see headlines all the time bashing @elonmusk and Tesla, how the new EV from some established auto manufacturer is going to eat Tesla's lunch. But they never mention the giant fucking competitive moat Tesla has: the charging network. Not just superchargers but destination too.
— Scott Allison (@Scott_Allison) July 20, 2019
Tesla, The Company
Tesla doesn’t just build cars, but also build the computers that run in cars. It builds software for the vehicles. Competing combustion cars can be seen as analog devices, while an electric Tesla is a digital (meaning connectable) device.
“What we end up with is an iPhone in an age of Nokia devices.” —David.
The US is the world leader in the computer software industry, and Silicon Valley is the epicenter of that leadership. Which is why the location needed to be in Silicon Valley.
“[A]t some point, choosing a car with the right software will stop being an option. If you can’t call the car from your app, play video games while parked, get firmware updates overnight, see your dog while parked, get notifications on your mobile if someone gets close — you simply won’t consider it at all.” —David.
Tesla’s main advantage over new companies such as Rivian is that it has a head start. David mentions that the electrification of automobiles has flattened out the competition in the same way the internet did. Who uses phone books when you can just look it up on Google Maps? Tesla’s current status and advantages is just one wave in Tesla’s competitive moat.
Tesla’s focus on the software gives it that sharp edge that has legacy automakers reaching for bandaids. But it’s only going to get worse for them.
What we are seeing with Tesla are the results of over a decade’s worth of innovation, hard work, and creativity. This force, if you will, will continue to grow. The beautiful thing is that all of this brilliant engineering started out as a mere thought, an idea. Imagine what you could create if you really put your all into it.
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