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Tesla’s Trillion-Dollar Triumph Turns Years Of Negative Speculation On Its Head

Originally posted on EVANNEX.
By Charles Morris

Journalists are fond of speculating about events that may or may not happen, and Tesla has always been one of the prime topics for this sort of “what if?” writing. Over the years, we’ve read many an article about all sorts of hypothetical events, from reasonable surmises to wild fantasy.

Now that Tesla has become one of the world’s largest companies, many of these narratives have been turned on their heads — the company that was seen as the scrappy but vulnerable young startup is now seen as the benign elder statesman, or as the overbearing bully, depending on your viewpoint.

Prey Becomes Predator

In the early days, many a pundit (and even some company insiders) predicted that one of the auto majors would acquire Tesla. Now Tesla could easily acquire one or more of them. It won’t, though, because none of them has anything Tesla would want. Many of the things the legacy automakers have traditionally considered their crown jewels are now increasingly seen as stranded assets.

All those hundreds of auto brands — Buick, Pontiac, Opel, Vauxhall, et al? They’re a useless waste of resources that carmakers have kept alive for decades because silly auto buyers are “loyal” to a particular brand, and the companies that own them fear losing market share. Dealership networks? They’re a vestige of the 20th century — car buyers hate them, and Tesla has never wanted anything to do with them. Existing factories? They’re already obsolete. To incorporate the latest production advances and maximize efficiency, Tesla builds new factories from the ground up. It has zero interest in refurbishing any old auto plants.

Perps Become Vics

A few years ago, a wave of new EVs from legacy brands were touted as “Tesla killers.” However, there was no murder — more like a botched assault attempt. Nothing to see here, folks. To continue the cop-show metaphor, this looks like one of those cases in which the intended victim grabbed the perp’s gun and turned the tables. Tesla’s vehicles have been outselling gas-burners in their respective classes for years, and of late, it’s become downright embarrassing for the German luxury brands. As for the prime murder suspects, they’re innocent: the Jaguar I-Pace sold 16,457 units in 2020; the Audi e-tron sold 47,324; Tesla doesn’t break down sales by individual models, but it delivered 499,550 vehicles in 2020.

Freeloader Becomes Uncle Moneybags

Tesla-haters have long harped on the fact that the US government bailed out the young company with a $456-million loan (they seldom mention the fact that Tesla repaid the loan nine years early, with interest). Now the UN is asking Elon Moneybags to pony up a few billion to help address global hunger (he should).

Buy ‘Em Up And Shut ‘Em Down!

Ever since there were oil companies, greenies have accused them of plotting to buy up cleantech companies in order to shut them down. We know of one case in which this may have actually happened. In 2001, oil giant Texaco purchased GM Ovonics, the company that made the batteries used in the last generation of GM’s ill-fated EV1, and allegedly used its patents to impede the advance of nickel-metal hydride (NiMH) batteries. (Toyota and others later developed NiMH battery packs without using Ovonics’ technology.)

Today, some suspect that Shell and bp, which are busily buying up EV charging companies, have something other than encouraging EV adoption in mind. Their sinister plan, according to this hypothetical narrative, is to make sure the price of public charging stays high enough that it offers no savings over driving a gas (or hydrogen) vehicle.

If the oily oligarchs do have something like this in mind, they had better tread carefully, for Tesla might just get the idea of playing a similar dirty trick on them. When we think of the oil industry, we tend to think of giant corporations like ExxonMobil and Chevron, but in fact, a lot of the oil and gas that’s sitting in the ground (mineral rights) is owned by thousands of small and medium-size companies and individuals. For a measly few billion bucks, Tesla could buy up substantial amounts of petroleum reserves and turn off the pumps.

On the face of it, this actually sounds like a pretty good idea — buy it and leave it in the ground. However, that old law of unintended consequences is a bitch. In the oil biz, less supply leads to higher prices, which leads to more exploration and drilling. Contrary to popular belief, higher gas prices are unlikely to have much effect on EV sales, but they could encourage companies to invest in new drilling projects, in ever-more environmentally sensitive areas. And, as we’re already seeing, high gas prices make politicians very nervous. When voters start complaining about prices at the pump, even left-leaning pols start cozying up to the oil companies and ask them to open up the taps.

So, on second thought, let’s scratch the “buy it and leave it in the ground” idea. In fact, why don’t we scratch all the fantasizing about things that might happen, and focus on what we can actually make happen in the real world?

 
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