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Discussion starter · #21 ·
In business, relationships sometimes matter more than expertise. And Foxconn (or, more accurately, Hon Hai Precision Industry Co., Ltd.) certainly has those. For example, if Apple wanted to outsource a car, guess who'd be at or near the top of the list as long as they had demonstrated they could do it? And that might be a big reason for this: not about building their own brand, but demonstrating to others that they have the capability.

Plus there's at least some good expertise relevance too. What we are seeing so far from companies like Tesla and Lucid is that they are able to get far more efficiency compared to the established car companies. A lot of that is in tighter integration of the electronics and that is something Foxconn has a lot of experience with. So can't say I blame them for thinking they can do better than the startups that pop up out of nowhere and still get it done.
Good points! I hadn't thought of it that way!

Very true that it does appear that Tesla, Lucid appear to get better eMPG's, but, at the same time Tesla has also proven that they can't yet produce as efficiently as ICE makes which greatly impacts their quality and profits - were I Foxconn I'd be highly nervous about the quality and profits - both are business killers if they never arrive. Lucid is a TBD from that perspective, though at their high price I'd think profits will come.
 
Good points! I hadn't thought of it that way!

Very true that it does appear that Tesla, Lucid appear to get better eMPG's, but, at the same time Tesla has also proven that they can't yet produce as efficiently as ICE makes which greatly impacts their quality and profits - were I Foxconn I'd be highly nervous about the quality and profits - both are business killers if they never arrive. Lucid is a TBD from that perspective, though at their high price I'd think profits will come.
When it comes to making things, the older companies know how to do it
 
Discussion starter · #23 ·
When it comes to making things, the older companies know how to do it
They certainly do, though, they are also entrenched and sometimes a new competitor comes along with different ways that are better. The past is certainly littered with failed upstarts, but also failed legacy companies. Time will tell if "silicon valley" can do it better with cars.
 
They certainly do, though, they are also entrenched and sometimes a new competitor comes along with different ways that are better. The past is certainly littered with failed upstarts, but also failed legacy companies. Time will tell if "silicon valley" can do it better with cars.
Tesla has Musk, he is no ordinary entrepreneur
 
Tesla is doing just fine.

So is BYD,Nio,Xpeng etc.

That is always the advice the old guard gives to new companies/entrants.In 2008-2012 Detroit executives told Musk that Tesla should become a Tier 1 supplier of battery packs for BEVs and PHEVs. They said much the same to Hyundai back in the day. Sometimes you become Yugo and sometimes you become Hyundai.

Tesla's market cap as of tonight is bigger than all the legacy automakers put together.
Agreed.

There is no doubt some of these attempts at EV's will fail; it's the nature of business, not per se evidence that new entrants should remain on the sidelines. That's pure hyperbole. From the perspective of Tesla alone, there naturally is some benefit of new brands entering the market; it causes established brands to up their game, and I think a fresh perspective has its benefits, particularly with respect to transition points in industries. As you mention, we saw this with Hyundai (who would have ever thought in the 1980's Hyundai would be where it is today?). I think similar things could be said of Lexus in 1990. Although Lexus of late seems to be stumbling a bit with respect to brand identity, it remains relevant to this day, if only from a sales standpoint. I think it years ago sent a clear message to BMW and Mercedes to regroup their efforts, which they did.

emh offers a compelling argument specifically for Foxconn's move, one I hadn't considered, and one he articulates better than I could!

Viewing EV's from a polarized view of all risk/downside or all benefit/upside demonstrates a fundamental lack of apportioning risk and benefit realistically. We not surprisingly see people doing this type of skewed analysis in a variety of arenas, including public health. Of course, there is risk with EV's, including environmental ones. And while the Luddite in me sees my next vehicle purchase likely powered by an ICE, I also acknowledge that by the end of this decade, EV's likely will offer a very compelling proposition on a variety of fronts, including range, power/performance, integrated technologies, reliability and overall value. I suspect I will buy one as my primary vehicle... just not yet. I suspect I will not be alone, and I fully acknowledge I am not an expert who can accurately map out how that transition will unfold.
 
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