Tesla: The Improvisation Debt
Jean-Louis Gassée

Provided continued customer loyalty to Tesla brand neither predictability nor debt is an aching issue. Musk main task, in my mind, is continue scale Tesla production levels simultaneously with growing its in-house technologies to a point securing Tesla destiny.

Lets take BMW i3/i8 as best “old industry” proxy response. BMW i3 volume seems to be at ½ of Tesla annual volume and that’s for broader appeal product at ½ the price. Technology & tooling wise, BMW didn’t seat on its legacy laurels; take its carbon-fiber-reinforced-polymer (electric cars bodies rather kept light) over the last 10 year, it is an impressive demonstration of BMW long term commitment. Tesla, on the other hand, is leveraging every drop of advantage Silicon Valley may provide. Tesla latest move departing MobilEye and poaching Jim Keller and other top CPU/SoC design to build its own AutoPilot compute semiconductor signals Tesla is after a vertically integrated platform strategy: compute, powertrain, batteries, etc. If executed properly, that will allow Tesla high volume manufacturing margins both as a luxury car manufacturer and as 1st tier ODM to Detroit laggards.

The jury is still out BUT with increasing urbanization private transportation may renaissance as a service. A consortium between the customer & cashflow rich Uber+Lyft with the technology rich Tesla, escaping 20th century car moguls control, is a tempting goal especially if one operates in Musk’s way — reshaping industries.

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