The Competition Is Coming...And It Is Tesla

Anyone who followed the automotive sector knows this phrase:

The competition is coming.

This was states by non-knowing analysts and talking heads on networks such as Bloomberg and CNBC. For years, this was the mantra. Of course, Tesla bears picked up on it and rammed this idea home wherever they could.

With the release of the Q2 numbers, Tesla is providing it is only gaining in market share. This is not share of the electric vehicle market but the overall automotive. The Model Y was the best selling car in the first quarter in the world. We can expect a repeat in Q2 considering the sales numbers were higher.

This means that the lies people were told by the "experts" are being revealed.

That said, the competition is coming...and it is Tesla.

Predator Versus Prey

It seems that, when it comes to Tesla, there is a large misunderstanding about the predator versus the prey.

We all know the predator is the one doing the hunting. It is the one on the trail of the prey. We know the prey runs but, ultimately, it gets caught.

This is exactly what is happening in the automotive sector.

Make no mistake, Tesla is NOT the prey; it is the predator. This is the one eating everything else.

To understand this, we have to understand what Tesla makes. Many will say automobiles, specifically electric vehicles. Hence, the nonsense with the idea that the competition is coming for Tesla.

Wrong!!!

The comparison to Ford is like comparing Home Depot to Kroger simply because they both have stores. It is an absurd idea yet that is what people do. To be a competitor, it would be beneficial to actually be in the same segment with each other.

And once this is clear, all else falls into place.

Luxury Vehicles

Tesla produces luxury vehicles. This is what they build and sell. Look at the price tag they carry. Is there anything in the $20K-$25K range? No. In fact, there isn't anything really under $35K until you factor in tax incentives.

This means that Tesla competes against BMW, Audi, and Mercedes. They are not competitors of Ford or GM. Not yet anyway.

It is why the market is completely missing the boat. They want to look at EVs believing that it matters. That would be like saying well Apple has 90% of the smartphone market but they will lose it as other brands move from dumbphones. Funny how Apple's share of the smartphone market dropped but their percentage of the overall mobile market grew.

Tesla is going down the same path.

What are the two largest segments in automotive?

That would be mid priced autos and pickup trucks. What does Tesla not make? Mid priced autos and pickups. What will Tesla be making in two years?

Exactly. Mid priced autos and pickups.

So the company has 0% market share today. Each vehicle it sells on those segments will be new. That means take share from someone else.

Hence, the competition will be coming over the next couple years and it is Tesla.

They are going to swallow up market share from legacy automotive in these segments just like it did in the luxury end.

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