6 Comments

Incredible newsletter as always. Nicely done and thanks for sharing your wisdom. Missing your class already

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Thanks David for the kind words! I am missing class as well.

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Apologies for the premature send. The second paragraph should read:

If this really is hard for traditional firms to copy because of their supply chain model, a consequence of Tesla succeeding in this would be additional cost differentiation for a sustained period.

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Awesome article. Thanks. Only thing I would add is that I’d think Tesla’s emphasis on vertical integration makes a move like this much easier than it would be at a traditional automaker reliant on suppliers to design and build their own components. But I am also not deeply familiar enough with those firm relationships to know how much that matters. It reminds me of the Coase’s theory of a firm and transaction costs.

If this really is hard for traditional firms to copy because of their supply chain mod, a consequence of Tesla succeeding in this would be additional differentiation that others

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First Thanks!

I also completely agree. Their vertical integration is becoming a bigger and bigger differentiator for Tesla.

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hi Gad,

interesting perspective! If you would like to get an additional perspective, I have packed many more details into my book: https://teslaficationbook.com/

Among them first principle thinking in terms of product and manufacturing design.

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