TSLA in S&P 500 and legacy auto.

I'm right with you, but don't own TSLA, at least not directly. A few contrarian points:

• There cannot be just Teslas on the roads of the world. Their one size fits all approach leaves a lot of room for other manufacturers.
• Maybe many legacy automakers won't make it, especially if their electrification and R+D efforts continue to be as tepid as they are now. But there are other young companies in the wings. I find Rivian to be a very compelling brand, for example.
• I believe there will be a tipping point quite soon, where customer demand and regulatory pressure combine to create huge pressure on the market to deliver EVs. All manufacturers will scramble to meet that demand, including Tesla.

One thing is for certain: The automotive market will be in a huge transition over the next few years, and what we took for granted for decades will be all different then. For the better, overall.

ChristophW said:

There cannot be just Teslas on the roads of the world. Their one size fits all approach leaves a lot of room for other manufacturers.

Click to expand...

I agree, I never made the case the Tesla would be the only manufacturer around. But if you take cell phones as an example, prior to the iPhone, the biggest cell phone companies weren't Apple or Google. Apple changed the game and put the traditional companies ( like Nokia, Motorola and others ) on back footing from which they've never recovered. Google managed to get a foot in the door at the right time to gain market share. Newer EV's are similar disruptor in technology.

I do think there will many manufacturers down the line with Tesla taking the largest share for some time to come. The question is whether the traditional industry will survive or whether newer disruptors ( like NIO and others ) will take over. Toyota is approaching EV's wrong. Nissan and VW seem to have woken up and are getting into the game and I'd think they will make it based on current demand but their debt and ICE investments are a potential liability. BMW I'm not sure for example, since it's building EV's on its ICE platform and seems to be reluctant to let go of legacy although they just announced a new platform that won't be out until 2022 or 2025. In addition, the dealer model may just disappear as people realize there is a much easier way to get cars and service.

Cost is another issue - if VW didn't have fed credits they would likely have a much harder time against Tesla. Tesla's costs of manufacturing are going down faster than they are for the other players.

I'm not saying I'd bet against the traditional companies, but I think that they are in some danger.