Competition Admits Tesla is 6 Years Ahead - “We Cannot Do It”

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Today an article from the Nikkei Asian Review came out with a great quote. A stunned engineers from a major Japanese automaker examined Tesla’s onboard AI computer and declared “We cannot do it.”

In this video, I’m going to take a deeper look at what’s going on here and shed light on Tesla’s competitive advantage.

Here’s some main quotes from the article

“One stunned engineer from a major Japanese automaker examined the computer and declared, "We cannot do it.””

“The real reason for holding off? Automakers worry that computers like Tesla's will render obsolete the parts supply chains they have cultivated over decades, the engineer said.”

“Such systems will drastically cut the number of electronic control units, or ECUs, in cars. For suppliers that depend on these components, and their employees, this is a matter of life and death.
So big automakers apparently feel obliged to continue using complicated webs of dozens of ECUs, while we only found a few in the Model 3. Put another way, the supply chains that have helped today's auto giants grow are now beginning to hamper their ability to innovate.”

Current auto makers have some big problems when it comes to adapting to new technology

One of the main problems is that they’ve outsourced their software and electronics. And their focus is on making the engine, chassis, suspension, and assemble, while marketing and distributing the cars.

All of this is dependent on scale and also on a disruptive company not entering the auto market.

The auto makers have no real software expertise, as making great software is extremely difficult

Also, it’s going to be difficult to create an integrated car as well.

In many ways the traditional auto makers are structured against innovation and their rigid cost optimization structures make them resistant to change.

Here are some questions I answer in the Q&A section:

1. “Can you give us an update on SpaceX’s launch of new Starlink satellites today?”

2. simplyjulian
Hi Dave what are your thoughts on SPCE though? Does it qualify as a generational stock in your opinion? Or at 28 is it already speculative?

Mirage Leung 
Nice video, thanks for sharing your perspective! Dave, what're your thoughts on SPCE - Virgin Galactic?

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Disclaimer: All content on this channel is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a licensed financial or tax advisor. No guarantee is given regarding the accuracy of information on this channel. Author is long TSLA at time of original video publish date.

Tags: Tesla, Elon Musk, Model 3, Model Y, Cybertruck, Investing, China, TSLA Shorts

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