Have you heard of the winner take most concept.

This is something we see in the world of technology. Companies that outpace their competition gain most of the market share. They do not get just a piece of it, they dominate.

Let us look at a few:

Android: dominant mobile OS
Windows: dominant desktop OS
Amazon: dominant online retailer
Facebook etal: dominant social media platform(s)
Google: dominant search

These are just a few that shows how companies that get in the lead tend to be tough to overcome.

What is the reason for this?

It is really quite simple: software advancement.

When one has the software out, it is easy to keep upgrading. If a company enters a few years later, they are starting with V.1 whereas the incumbent is on V.7. The baseline is much higher. Thus, any upgrades, on a percentage basis, have a much bigger net impact.

Over time, things will change but it can take, as we have seen, decades.

Source

Tesla

Most look at #Tesla as a car company. After all, that is where the overwhelming majority of their revenues come from. However, this is not the case. Tesla is a lot more than a car marker.

To start, if you want to get insight into this company, and what they are really about, check out some of the videos by Sandy Munro on YouTube. This guy is one of the foremost experts on the engineering of cars (actually many products) and his firm rips them apart to provide assessments.

He is a great source of understanding about how the EVs industry is shaping up. So what does he say the conclusion will be? There will be two winners:

Tesla and the Chinese.

All other companies are going to struggle. His latest assessment is that most, other than Ford, will likely go out of business.

He does not feel that is a single company catching up to Tesla. In his view, they are too far ahead.

Software And Manufacturing

The car industry is not about cars. That is the easy part. Today, it is about software. This is where Tesla crushes the competition. They have the world's best engineers, software and otherwise, bar none. Across the board, in surveys, when engineering students are queried about where they want to work, the top two companies are Tesla and SpaceX.

When you watch Munro's teardowns and what his team uncovers, it is evident where things stand. This is a guy who spend decades at Ford, so he understands the legacy car companies.

Building a car is one thing; creating the software that is necessary for today's vehicles is another matter. This is where the proverbial game over comes in.

For the legacy automakers to catch up to Tesla is like a start up catching Google right now. Unless the royally mess up, they will control search for the next decade, if not more.

As much as Munro loves the software and engineering of the cars, this is not the biggest advantage according to Elon Musk.

Elon Musk: Manufacturing Will Be Tesla's Long Term Competitive Strength

Source

He is very clear on this. The way Tesla approaches manufacturing means it intends to produce more EVs than any other maker on the planet. As of now, the goal is to hit 20 million by 2030.

Many say this is impossible. After all, Toyota is the largest car company in the world right now and they do about half of that. How is Tesla going to double that?

Winner take most.

Sell As Quickly As They Are Produced

Will Tesla get to this point? Obviously, only time will tell. There is little doubt they are the leader in EVs, and will remain that way for a long time. The only question is if the transition continues.

It is always hard to tell where adoption goes. Many are convinced that EVs are the future. Others, however, are not. This is where we will simply have to see where things stand in 5 years.

One thing that is likely, based upon its track record, is that Tesla will be producing 5M-6M vehicles by the middle of the decade. If they are still selling all that rolls off the assembly line, then it is game over. The competition will not be able to catch up.

Since cars are turning into "computers on wheels", then Tesla might be erecting a barrier that makes it impossible for others to cross.

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