Analyst: With Full Self-Driving On The Way For Tesla, Traditional Automakers Are “Toast”

NOV 25 2016 BY ERIC LOVEDAY 29

Tesla's new self driving hardware/360 degree vision to allow for Level 5 autonomy

Tesla’s new self driving hardware/360 degree vision to allow for Level 5 autonomy

With the announcement that all Tesla vehicles will be equipped with self-driving hardware, one analyst thinks it’s game over for the traditional automakers out there.

The cost of enhanced Autopilot today, and fully autonomous driving in the future

The cost of enhanced Autopilot today, and fully autonomous driving in the future (click to enlarge)

Global Equities Research’s Trip Chowdhry says that Tesla’s self-driving announcement spells the end for the likes of Mobileye and traditional automakers.  In Chowdhry’s words, Tesla’s announcement means that traditional automakers are “toast.”

As Chowdhry explains (via Barron’s):

Fast will beat the Slow – Tesla continues to out-innovate every technology company.

Tesla Network for Car Sharing and for Ride-Hailing is another breakthrough innovation coming in December 2017

Winners:
o Tesla
o Nvidia (NVDA)
Losers:
o Mobileye is toast, obsolete technology, Zero chance for Mobileye to remain even relevant
o Traditional Auto manufacturers are also toast, too slow and completely clueless

We’re not so sure that traditional automakers are “toast” following Tesla’s self-driving announcement, as all the major OEMs seem to have an autonomous program of some nature (they likely are just not ‘tooting their horn’ quite as much), but one thing is for sure…in this industry, you need to be able to react quickly and Tesla has time and again shown it’s abillity to do this quite well.

Source: Barron’s

Categories: Tesla

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29 Comments on "Analyst: With Full Self-Driving On The Way For Tesla, Traditional Automakers Are “Toast”"

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Incumbent OEMs have autonomous programs just like they have electric car programs…

Electric autonomy is at the heart of everything Tesla does. They have hundreds of thousands of production electric cars collecting data, learning, and updating wirelessly every day.

Everyone else has “programs”.

Traditional Auto manufacturers sell 100 mio cars a year, Tesla is toast :-).
The average people car nothing about a Model 3, it costs double of a normal ICE car.

Sounds like “Pete” here is a Re-Pete of one of our existing serial anti-Tesla troll shorters, I wonder which one-probably sven!

Maybe if you cared to deal with what is being said rather than who’s saying it you would look less stupid.

Teslas fundamental advantage is that they don’t have competing legacy products that are inferior but probably still profitable. if you spent r&d on a product, you want to milk all the profit you can out of it before replacing it with newer technology…

Nailed it.

The idea that the entire class of legacy auto makers are “toast” is nothing but wishful thinking.

There is no way that Tesla can grow fast enough to capture all, and probably not even most, of the market segments which now belong to legacy auto makers, which by now include not only GM, Ford, Chrysler, Volkswagen and BMW, but also Toyota, Nissan, Honda, Kia, and many others.

Will some of the above go out of business as the result of the EV revolution? Of course. That always happens during a disruptive tech revolution, which the EV revolution certainly is, even if it’s progressing rather slower than most.

But some of the legacy auto makers will manage to survive the transition. I certainly wouldn’t take any bets on which ones, though. It’s too early for there to be clear signs. Even Toyota may still have time to reverse course and jump into making compelling, long-range plug-in EVs.

“There is no way that Tesla can grow fast enough to capture all, and probably not even most, of the market segments which now belong to legacy auto makers, which by now include not only GM, Ford, Chrysler, Volkswagen and BMW, but also Toyota, Nissan, Honda, Kia, and many others.”

I 100% agree with you that Tesla will not be able to grow fast enough to put the traditional automakers out of business or push them to the wayside. You can’t replace the manufacturing output of 10M+ vehicles made each year.

However what Tesla (and Chip) is banking on is the disruptive shift of vehicle ownership – from outright ownership to shared or fractional. Uber with no drivers. Merged with your calendar.

I think at first it

Let’s try to pick that up where I left off

I think at first it won’t be much- people will do this instead of buying a second or third car. And it will take a while for this to take hold. The question is whether Tesla’s lead in autonomous driving will pay off in the time it takes people to change their minds about how they view vehicle ownership.

To author and publication team: I fully understand your deep-seated editorial advocacy on behalf of Tesla. I also accept the assertion that your staff are not trading TSLA or associated options (although if you were that doesn’t bother me). But quoting Triptander Chowdhry and “Global Equities Research” is a step into territory as non-expert and baised as some guy telling you Tesla autos are fiery death traps. It makes you look like gullible acolytes. Chowdhry is no more useful as a source of business or technical insight than any reasonably educated individual in the comments columns. I won’t call him a fraud since I don’t know whether his pubic utterances are connected with any sort of inappropriate trades or misuse of investor funds. But I DO know that from mid-2015 up through the last time I looked (late September this year), he and his “firm” have declined to comment on their unregistered status when asked, and FINRA had at least one open complaint to investigate both the firm and Trip Chowdhry given their lack of licenses. Again, last I looked, FINRA said this when queried about Mr. Chowdhry: “Not Licensed: This individual is not currently licensed to act as a… Read more »

Gosh, I never realized that using a fiber optic cable to carry signals controlling the power electronics would measurably improve the energy efficiency of an EV powertrain.

(WARNING: The above may contain traces of sarcasm)

Well said. Anyone who knows anything about this “analyst”‘s history know he should absolutely never be cited for anything – unless we get a law against idiocy, and then he’d be cited constantly.

LOL, what a BS. If Tesla puts self-driving vehicles on the road, Tesla will be toast cause we’ll see many tragic deaths

I’ll take Tesla autopilot over some drunk idiot any day. Facts are, miles on autopilot are safer than without it. Level five autonomy TBD. Who wouldn’t want a car that can circle a parking lot looking for an open space, though, especially in a dense, urban area?

There are countless examples of disruptors not surviving despite dominating positions (eg. Where is Netscape? Anyone still use Yahoo to search?). At this point it’s too early to really know that Tesla will survive the disruption process, but i welcome their “drive”. What is undeniable is that a non-autonomous car sits unused most of the day. A fully autonomous car can replace several traditional cars resulting in lower overall industry sales. This likely means several traditional automakers won’t survive, but Tesla also won’t own 100% of the market. Some traditional automakers will survive the transition/disruption .

It’s certainly true that Tesla’s technological lead in the EV revolution doesn’t guarantee the long-term success of its business. (How is BlackBerry doing these days?)

On the other hand, Tesla’s outlook is far rosier today than it was in its early years, when more or less all the financial analysts were saying its long-term prospects for survival were quite low.

The beauty of installing the self-driving hardware in all cars, is that it will still collect all the road data for Tesla, even if owners don’t activate the system.

Tesla will be getting massive amounts of data on roads, that will just continue to improve autopilot.

I think it’s dumb to assume autopilot is what everybody wants, and the regulation to force the issue doesn’t exist, and won’t for a long time.

I love the system, and it’ll help Tesla in a continued $2 gas world, but like everybody else the reports of the manual driven car’s “toast” have been greatly exaggerated.

Phew.

Regulation will be necessary to make it legal to “drive” autonomous cars on public roads, but no regulation will be necessary to compel people to use them. Several factors will make autonomous cars far more attractive to Joe Average. Those will include significantly lower insurance rates, less stress from driving, the ability to get work done during a commute, and eliminating the need for a “designated driver”.

Autopilot is not what everybody wants. It’s what 99.999% of daily commuters want. Or do u know anybody who is having fun driving in heavy traffic and jams every day, two times a day?
I guess a 16 years old who just got his driving license won’t be appealed by autopilot, but they are not the target customers neither.
Fact is: the more traffic, the less fun to drive yourself. I find the cars adds very funny, because the car is always alone on the road, which is in real life impossible.

There is one recent entry into the electric car market that doesn’t even have active cruise control, but it’s winning Awards. I would not say OEM’s (original equipment manufacturers) are toast, but the writing is on the wall.

Traditional auto makers are not toast…
The only real queation with big auto is how much market share they are willing to give up to Tesla and the Chinese before they decide to compete…

I think it’s more likely Tesla will have its Kodak moment in the sense Kodak didn’t intend. But who cares if Tesla fares one way or another? What matters is that we transition to sustainable energy. Tesla has played an important part in accelerating that, and continue to do so. But I don’t believe for a second that Tesla’s death, even if happened quickly, would change the picture much. In the car industry and elsewhere there’s now much greater awareness of the potential to improve, both with the tech we have today and the tech we’re currently developing. Incumbents or upstarts will pick it up if Tesla doesn’t. And Elon Musk will keep working on something large enough for his ego and our benefit (and entertainment). A new way of forming companies is emerging that does away with investors and the “office approach” and draws on resources globally, and innovation will accelerate dramatically as a consequence. Watch the latest Hyperloop presentation (from Germany, I believe) and you’ll get some idea. Read Rework and Remote and you’ll really begin to see the contours of what is about to happen. Combine the two – the distributed company and the community driven company… Read more »

Quoting investor manipulations sites like Seeking Alpha and this one is one of the seven deadly sins of reporting.

These sites are about pump and dump, distort and short. Greed is everything, truth is nothing in these circles. Green car blog readers are typically well aware of this and will not be inclined to take a story seriously that is based on content from investor manipulation websites.

Wall Street is 99% scam.

Tesla exists today as a function of over $3B in financing through Wall Street. Tesla’s net cash generation from Operations is negative to the tune of over $1B. Tesla’s Asset Backed Loan, from which they do all of their “day-to-day” financing, is built from underwriting by Wall Street banking firms, as have been all their share and bond issuances. Goldman Sachs has made about $275M in personal loans to Elon Musk, loans backed by Musk pledging shares made possible by Wall Street. Tesla will do another round of financing within the next six months, probably more than $2B, or the Model 3 and the rescue of SolarCity will never come to fruition.

Tesla = Wall Street = Tesla.

Are you sticking to your “scam” judgment?

For those who’re unaware, this is Trip Chowdhry who is an ignoramus who happens to be bullish on Tesla. He has a long track record of being outrageously wrong, but being so outrageous he always gets press (as in this case).

Please InsideEVs, please, please, please do not report on anything he says.