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Tesla's Dilemma 2023

Often a business plan that focuses on capturing a niche market is the smartest, most successful path long-term. Trying to capture "the world" is a mistake many CEOs get stuck on or talked into, the concept of making a product to fit everyone's budget needs, instead of focusing on further developing their high-end niche market opportunities.

So, I do not think it's smart for Tesla to shift now to produce lower cost vehicles like Model 2 priced around the $25,000 range with tight profit margins. This puts Tesla smack dab competing against auto manufactures like GMC that already have the capability to produce 20 million vehicles per year and many Chinese auto manufacturers said J Dean @SCS.

Today, Tesla technology, brand is well respected by most people worldwide, as a mid to higher priced EV which offers quality. And a shift to compete at the lower price ranges i.e. $25,000 or so brings much lower profit margins with the Model 2 style EVs, and distracts Telsa's focus on building "the highest quality" EVs for mid-higher end customers.

Expending capital to build and develop long-term, a mid-low priced EV at the $25,000 or so price point, puts Telsa squarely competing against GMC, Honda, Ford, Toyota, Hyundai, Volkswagen, Kia, estimate 250 Chinese EV manufacturers and others. This distracting shift by Tesla will increasingly suck-up, sap, Tesla's capital resources putting on a "hamster wheel" like treadmill of never ending capital infusion needs against competing with the capital opportunities of many other automobile manufacturers. But there's only so much capital and risk investors will want to make, it's not an unlimited space.

A smarter growth plan for Tesla might be to form alliance (s) with high-end automobile manufacturers like MercedesBenz, BMW or Rolls-Royce by doing so Telsa could also utilize their dealership networks to boost sales and add EV repair center convenience to Telsa customers. And maintaining the mid-high end quality brand could grow long-term with much higher profit margins.

Significant growth could be developed by Telsa investing in on-demand software services (SaaS) in autonomous vehicles; wherein passengers use eCommerce shopping, perform work applications, and connect with VoIP, all while enroute to destinations. And Tesla could use its limited capital to grow its solar energy and commercial semi-truck revenue opportunities.

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