[madads]

As he says in short the masterplan is to:

"Build sports car.

Use that money to build an affordable car.

Use that money to build an even more affordable car.

While doing above, also provide zero emission electric power generation options.

Don't tell anyone."

[agumonkey]

Trying not to be too much of a fan boy I smiled at the fact that, on its way to develop EV market recognition and infrastructure they made cars that topped anything else in safety and speed.

'if you want to have EV, all you have to do is buy the best cars we just made' kind of.

[prawn]

Agree - it's incredible.

How Time have not managed to throw him Person of the Year yet, I cannot understand. The cars, the solar network and SpaceX. They're huge undertakings.

[forgetsusername]

>that topped anything else in safety and speed.

In what sense? Look at European NCAP safety ratings; the Model S is great, but certainly didn't "top anything else". There are quite a few cars with better overall safety ratings.

And speed? Good acceleration, sure. But not faster than anything else. Top speed either. Where does this myth originate?

[jakobegger]

They clearly underestimated the cost of the Model S (it's a luxury car, not a "sporty affordable family car"). But overall their strategy seems to be working out beautifully.

[MrFoof]

No, I think they changed the strategy somewhat.

Who has the best margins in the automotive industry? Porsche. In fact, it's almost always been Porsche since their recovery from the mid-90s. Porsche's margins are so good, investors are complaining that the high-volume Macan is dragging down margins to a "terrible" 16% from their typical 19-20% -- which (the 19-20%) is double what Audi's (#2 for industry margins) margins are. To put this in perspective, Porsche brings in as much profit (in Euros) as the Volkswagen brand, despite selling 2% as many cars.

Porsche commands their premium by finding a niche and trying to be the most desirable in it. They have competitors, but they offer a package people are simply willing to pay a lot more for. There were never a lot of competitors to Porsche's sports cars in their price range -- Corvette aside, Porsche still commands a huge chunk of the traditional $50-150K sports car market, and has a very devoted fanbase. They also carved out a significant chunk of the high-end SUV market.

What competes with the Model S and Model X? Nothing from a powertrain perspective. Add in clever packaging and other features that are largely exclusive and they've created a niche for themselves.

The Model 3 is Tesla's Cayenne/Macan. The volume play to ensure their top-end electric vehicles can continue to command their prices, and to provide cash for general operations. Being the mass market player is admirable, but if someone (or several companies) outplay or match you, you could be in for a rough ride. To me, Tesla made the smart play by focusing on higher-margin vehicles.