Teslas (NASDAQ: TSLA) Its market cap surged to over $ 400 billion in 2020 as investors chose everything from Tesla’s growth to its future as an auto tech company. With automotive competitors struggling to catch up in electric vehicle manufacturing, it’s easy to see why investors are excited about the future of Tesla. But let’s face it, even the slightest disruption in growth or technology history could sink Tesla’s stake.
Three of our foolish contributors believe that Tesla will unleash some disruptive forces in 2021, and they should worry Elon Musk and the company. The challenges range from Cruise̵
Really autonomous driving
Travis Hoium (Cruise): Elon Musk has claimed Tesla is the industry leader in autonomous driving for years and has unleashed a fleet of self-driving Teslas. On any objective measure, Tesla continues to lag behind the competition when it comes to autonomous driving technology, and there is no reason to believe that wealthy Tesla buyers will be willing to self-drive their vehicle over $ 50,000 on a Friday night to make a few bucks on ridesharing.
The companies diving headlong into the autonomous ride are pursuing a vision that extends well beyond vehicle ownership. They develop the technology that promotes autonomous ridesharing and even set up the rideshare service themselves. The one Tesla should really be scared of is Cruise, a subsidiary of General Motors (NYSE: GM)because it’s better to drive autonomously and build a business that eliminates the need to own cars.
According to Navigant Research, there are over a dozen companies that have both better strategy and execution in self-driving technology than Tesla. In fact, Navigant Cruise calls a “leader” and Tesla just a “challenger” in space. Elon Musk himself has admitted that “self-driving” is not exactly what his name implies. Here is his comment during the Q1 2020 earnings call: “Regarding Autopilot, we released a new software update for traffic lights and stop signs in March that only allowed early access users and all US customers with a full self-drive package access last week Cars now automatically stop at every stop sign or traffic light until the driver receives a confirmation to continue. “
Teslas is recognizing stop signs and traffic lights. Meanwhile, Cruise covered 831,040 autonomous miles in California in 2019, while Tesla covered 12.2 autonomous miles. You read that right, 12.2 miles. When it comes to fully autonomous driving, Tesla is way behind Cruise, and that should be a concern for investors.
Ultimately, what is the bigger concern is what autonomous driving might bring to transportation. Cruise showed off the Origin concept vehicle earlier this year, which has no driver and was built to comfortably transport people around cities. The vehicle is not intended to compete with Tesla for space in people’s garages, but rather to replace vehicle ownership altogether.
Not only does Cruise beat Tesla on autonomous driving, but they are also trying to improve the entire business model behind making vehicles, which is Tesla’s core business. If Cruise launches its self-drive service as planned in 2021, Tesla should be very concerned.
Aim for a profitable niche
Howard Smith (Rivian): One of the more promising players in the electric vehicle (EV) space appears to be one that is not yet publicly traded. But some big names have already noticed. Ford engine (NYSE: F) He may have hedged his bets on his popular – and profitable – F-150 when he invested $ 500 million in electric vehicle startup Rivian in 2019.
Rivian plans to begin shipping its R1T electric pickup and R1S SUV from summer 2021. The company bills both as “adventure” vehicles and EV fans who have the means to deviate from Tesla.
The R1T pickup starts at $ 69,000 and the R1S starts at $ 72,500. There is a lot to like for EV fans. Both accelerate from 0 to 60 mph in 3 seconds and offer up to 750 hp. You’ll also be able to wade through three feet of water, the company says, and have a battery range of up to 400 miles. The vehicles are manufactured at Rivian’s 2.5 million square foot facility in Normal, Illinois.
In addition to the two adventure trucks, Rivian also wants to deliver Amazon (NASDAQ: AMZN) with last mile delivery van. Amazon conducted a $ 700 million investment round in February 2019. In December, Amazon joined Ford and others in a $ 1.3 billion investment round. Rivian announced its final round of investments in July 2020 that secured an additional $ 2.5 billion. It is clear that the company is well financed and is going into production with several interested parties.
Rivian is not a new start-up. It was founded in 2009 by RJ Scaringe. Rivian has designed a “skateboard” chassis that contains four electric motors, air suspension, battery management and other systems below the height of the wheels. It is designed for off-road use.
While these features may not take Tesla’s Model 3 customers out of business, Rivian seems to be on the radar of high-end EV customers. If this EV design in the popular truck and SUV categories is just as profitable as the internal combustion engine versions, then in less than a year Tesla will have a new competitor to look over its shoulder.
Another big winner in the warehouse and electric vehicle business
Jason Hall (SolarEdge): Since going public about five years ago, SolarEdge stocks have risen by a staggering 806%. That’s nearly Tesla-like gains for the period and a notable achievement for the company in dominating the module-level power electronics business for decentralized residential and commercial solar power in the United States
So far, it hasn’t been a threat to Tesla at all. The electronics it makes are important to solar panel manufacturers and installers like Tesla, as this is how solar energy gets into the grid.
But as we head into 2021 and beyond, SolarEdge definitely presents, if not a threat, the reality that Tesla will not have the energy storage and electric vehicle markets to its own. SolarEdge has made great strides in diversifying the EV and battery markets, and 2021 will be a big year for both.
SolarEdge is a major supplier of solar electronics to the residential real estate market and has an immense network of installers and distributors and a good reputation. The StorEdge home battery system is a lockdown to steal market share from the rapidly growing battery business, in which Tesla was previously a leader.
Tesla’s leadership in electric vehicles stems in part from its vertical integration. Traditional automakers have been trying to catch up for a number of years, working with suppliers to establish supply chains for EV components. This is a great opportunity for SolarEdge, which is already in pre-production with several leading automakers to supply powertrain components.
2021 is expected to be a very important year for electric vehicles and energy storage. Tesla will face more competition than ever before, and SolarEdge is a big winner that will jeopardize Tesla’s dominance in its two most important businesses.
Threats to Tesla are looming
Tesla has been the disruptor for its entire corporate history, but it’s now the world’s most valuable automaker and that makes it a destination. Whether you are considering autonomous driving, electric vehicles, or energy storage, there may be threats in 2021 that Tesla is not ready for.