I generally agree with your thesis, but I'll give you a twist on it: even if both of the criticisms raised by others are correct, it still gives Tesla a bigger moat. Think about the implications of passing the tipping point for demand for electric cars.



I think Tony Seba may be right about all new cars being electric by 2025. Not because there's enough supply to meet demand -- oh no! But because anyone who is sitting on an ICE car will put off buying a new car, hanging on to their old car for a few extra years, rather than buying a new ICE car which they don't really want and which will become instantly worthless.



If you notice, this scenario ends up being even more positive for Tesla. The profits for the ICE incumbents crash before the electric car market is saturated, making it harder for them to convert over, and Tesla continues to be production-constrained and able to charge premium prices during this period.



The ICE car companies may manage to sell new ICE cars by discounting them deeply but that just eats into their profits and gives them less cash to transition with.



There is also a definite possibility of a shrinking car market, due to various things, including people moving downtown and taking the subway. But how does this play out? Fewer people buy cars, but the same number buy electric cars: it plays out as a drop in demand for ICE cars. Because ICE cars are the inferior substitute which you get only if you can't afford an electric car. Again, positive for Tesla, negative for any ICE car company which hasn't managed to ramp up their electric car production already.

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