This is a big deal because economies of scale; that is, the more you make of something, the less it costs you per unit because you can amortize your fixed costs over more products
Comment:
Bingo. When you have economies of scale, your costs per unit go down. Thus, the achievement of economies of scale is overcoming a barrier to entry.
An electric vehicle could be feasible technically, but not competitive economically because barriers to entry forbid the achievement of economies of scale. How? Because economies of scale requires a big factory which costs a lot of money.
There is little incentive for existing manufacturers to do this because it is a revolutionary design which makes their existing models obsolete. If their existing models become obsolete, they lose a lot of money.
A new player who wants to implement a revolutionary design has to round up the capital to make a big factory and that isn't easy for "unproven" technology.
This is not a contradiction, because the thing that isn't proven is customer acceptance. It can be proven technically, but if customers can't get it, it can't be proven economically. It's a chicken and egg dilemma. Musk is on his way to overcoming that.
Update:
Maybe not so fast. According to this MarketWatch post, the company's stock is not a buy. Actually, according to them, the company is bankrupt.
If Tesla is to succeed, they will probably have to do it on the basis of the stock or on Musk's own fortune. I have confidence in Musk, but I don't believe that the taxpayers should be financing his business.
However, it is in the national interest to stop importing so much oil. Tough dilemma. I won't bitch too much if subsidies happen, but if it is so good, people should be supporting it.
That means if you believe in Tesla and Elon Musk, you should buy the stock and/or his car with your own money. Otherwise, if there is no subsidy, nor if there's no stock purchases or car purchases, there is a great risk that Tesla will fail.
This now puts what was said about the infeasibility of electric cars into perspective.
Update:
Paging Al Gore. Are you awake, Al Gore? What about the rest of these big-time liberals. Where are they on this? Put up, or shut up.
By the way, Musk says he will make money this year.
Update:
Oh, hell. What am I thinking about? Have Uncle Sam give Musk all he needs to make Tesla work.
It's for national security. No more imported oil.
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