They could also maintain their brand image and sell their mid range luxury models achieving less volume at a higher profitability margin.
Show me where Toyota has casting machines anywhere near the scale of what Tesla is using in Model Y, or board design, or AI chips, or even things like buying experience.
Fundamentally “best” can be reduced to margins because everything else shakes out in a competitive market. Tesla has the best margins, and they will bring that margin advantage down to the $25k price point and Toyota won’t stop them.
The other big number you can look at is depreciation and operating costs. Tesla has the lowest depreciation and operating costs per mile at its price point, making it substantially cheaper to own a $45k Tesla than a $45k ICE.
A $25k Tesla with the same fundamentals could be had for perhaps $200/month with $0 down and would essentially obliterate any passenger car competition in any consumer environment where it’s possible to charge it.
I would not expect Tesla to have any compunction of selling a $25k vehicle under the Tesla brand. I don’t think their S/3/X/Y cachet would be hurt by a smaller sibling.
Toyota has 10s of millions of happy customers, and has car after car after car on top 10 lists, every year. From everything I've read, the Tesla service experience is horrible.
>Tesla has the lowest depreciation
Source for this? Or do you believe they are appreciating, too?
>Tesla has the best margins
You know this stuff is dead simple to look up, right? Toyota has profit and operating margins higher than Tesla. So, no, they aren't "the best".
A Tesla Model 3 after 3/5 years has a residual value of 77.47%/58.96%/45.35%(est), versus for example a BMW 3 Series after 3/5/7 years with a residual of 61.56%/41.71%/34.15%. [2, 3]
And the apt comparison for margins is gross margins not operating margins. Operating Margins will be higher for a stagnant company conversing cash versus a rapidly growing company. Gross margins show you how much they are earning per unit sale, regardless of how much of their profit they are re-investing in future growth.
Tesla automotive gross margins in Q3 were 27.7% versus Toyota gross margins of 18.1%. [4, 5]
[1] - https://www.thestreet.com/tesla/news/tesla-tops-consumer-rep...
[2, 3] - https://caredge.com/tesla/model-3/depreciation https://caredge.com/bmw/3-series/depreciation
[4, 5] - https://tesla-cdn.thron.com/static/4E7BR9_TSLA_Q3_2020_Updat... https://finbox.com/NYSE:TM/explorer/gp_margin
Companies that make high volume low price models...well they shower in money.
"Expand the electric vehicle product line to address all major segments"
https://www.tesla.com/blog/master-plan-part-deux
“It was always our goal to try to make an affordable electric car,” said Musk, referring back to his 2006 Tesla Motors Master Plan.
https://www.tesla.com/blog/secret-tesla-motors-master-plan-j...
Rumor is, they are already working on the $25K sedan that's one tier below the Model 3.
https://www.tesmanian.com/blogs/tesmanian-blog/tesla-model-2...