The Tesla broke usual electric car strategy by making something hot not utterly lame and stodgy[1]. Which is what all electric cars were until then. The economics of that actually worked.
The Prius at least fit into Toyota's market segment.
[1] This is not totally true. There were some once off electric cars in the 1990's that were sporty. Friend dated a women that owned one. It only had a range of about 40-50 miles but it was FAST.
> The Tesla broke usual electric car strategy by making something hot not utterly lame and stodgy[1]. Which is what all electric cars were until then. The economics of that actually worked.
Tesla did a great job at making EV cool, there's no question about it.
BUT, economics of that are still TBD. They still fail to achieve any sustainable profit as a business, few years after their mass market vehicle debuted, and have to keep on raising money, on very unfavorable terms.
Tesla cracked the problem of making people buy electric cars in significant numbers. Everything else is a supply-chain and manufacturing optimization problem. Extremely challenging, obviously, and maybe Tesla won't be the winner. But those problems are fundamentally irrelevant until the you've cracked the problem of mass sales.
Making people want a product isn't enough to get economics to work.
They struggle to produce it cheaply enough, at least as of right now. Manufacturing, at scale and within costs is really really hard. Tesla's initial math for cracking the economy was based on full automation of the production, that failed spectacularly. As a result they have a lot of human labor costs they didn't plan for, so problem of optimizing it got even harder.
Did Tesla made desirable product? Yes, of course. Can they crack the economy of it? We'll see.
Tesla didn’t make people want the product. That’s meaningless. What they did that matters is that they made people pay for the product, at a price point that competes favorably with BMW’s low-end luxury cars.
You’re correct that Tesla’s future and costs are uncertain, but that’s irrelevant. What is relevant is that the production cost of a Model 3-type EV will never be as high as it was in 2018. It will never be as high as it is in 2019. Even without miraculous supply chain improvements, the cost of lithium batteries and electric drivetrains is on a relentless downward path. If Tesla can make one now at $10 in profit (obviously they make more than that), then whichever company is doing so in 5-8 years will be earning thousands in profit. And if the manufacturer is not BMW, it will be the end of that company as a viable competitor.
Tesla was able to sell electric cars for more than the marginal cost per unit in a large enough volume to be viable. Full stop. After that Tesla's profitability or not is just accounting shenanigans. How bad/good a deal was this for the investors. And is this company viable and make money. Are two separate things.
Investors can lose their shirt on a viable company. Just as they can make bank on a company that's a flash in the pan. Investors can often make money on companies that are actually failing and going to fail. There is probably an correlation between how hardball the company plays it's investors and the companies ultimate viability.
As I said above, it really doesn't matter whether Tesla survives long term. Just as it doesn't matter to the cellphone industry whether Nokia survives, or to the PC industry whether IBM, Apple and Commodore survived. Tesla built the product that proved the consumer demand existed today. BMW (and other manufucturers') strategy was predicated on the idea that large-scale consumer demand was years away. Tesla made that strategy obsolete.
The Prius at least fit into Toyota's market segment.
[1] This is not totally true. There were some once off electric cars in the 1990's that were sporty. Friend dated a women that owned one. It only had a range of about 40-50 miles but it was FAST.
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