How Tesla could become the world’s largest carmaker within 10 years

Tesla is still tiny in the automotive world but seems likely to become the leading manufacturer within 10 years given the brand’s sex appeal, its technological lead and improving ability to scale production.

Let's set the stage

There are about 2 billion cars and trucks in circulation worldwide, and automotive industry manufacturers deliver around 100 million new vehicles per year, including 80 million cars sold each year, a figure that has remained more or less stable for a number of years. (Bloomberg for example talks about the imminent "peak car")

In 2018, the number 1 brand in sales was Toyota with more than 8 million vehicles. Number 25, manufacturer Baojun, delivered just under 900,000.

Tesla, on the other hand, sold 245,000 vehicles in 2018. The young brand is still very small in this market.

But the picture is misleading, because demand for Tesla cars is high and the brand is investing heavily to increase its production capacity.

For instance, in 2018 deliveries increased by more than 100% between the second and third quarters.

Tesla's efforts will continue to pay off as word of mouth by ever more numerous happy Tesla customers will continue to intensify.

Here is a selection of Tesla Model 3’s recent achievements in particular:

• Q3 & Q4 2018 : Best Selling Car in California
• 2018 : Best Selling Car in USA - Small + Midsize Luxury
• 2018 : Best Selling Electric Car in USA
• 2018 : Best Selling Car In USA From An American Car Company
• Q4 2018 : Best Selling Car In USA In Terms Of Revenue
• Q1 2019 : Best Selling Luxury Car In USA
• Q1 2019 : Best Selling Electric Car in USA
• March 2019 : Best Selling Car of Any Type in Norway (6X more than next one, VW e-Golf), in the Netherlands (2X the next one, Ford Focus) and in Switzerland
• Feb to March 2019 : +453% Sales Growth In Germany

 Elon Musk explains that Tesla had produced 23,000 cars in 2013, compared to 245,000 five years later, or 10 times more! It forecasts similar growth between 2018 and 2023. In February 2019, he said : “My guess for 2021 is 1.1 million cars for Tesla, and 3 million cars per year in 2023.”

These latest successes in Europe are all the more impressive as Elon Musk reports that getting cars to customers in China and Europe was a nightmare: :“This was the most difficult logistics I’ve ever seen and I’ve seen some tough ones.” We can imagine that it is not these delivery issues that will make Tesla fail in its race for the world title. Especially since Elon Musk intends to produce his cars in these markets eventually, which should lower their price (while even at a base price of USD 49,800, they remain competitive as seen in the rankings above).

Tesla is famous for its Gigafactories, the first of which in Nevada is the largest building in the world in terms of area (in volume, the title goes to a Boeing factory). A Gigafactory is designed to produce 500,000 cars per year. The construction of a second one started in China in early 2019 and is expected to be completed before the end of the year. A third is planned in Europe, in Germany possibly.

With 1,1 million vehicles out the production line in a year, Tesla would have been number 21 in the world in 2018. At 3 million, Tesla would have entered the top 10 in the world.

If Tesla were only at 2 million cars produced in 2023, and if we multiply this figure by 5 between 2023 and 2028, a not insignificant if, Tesla would produce 10 million vehicles and would then be the world first world car maker (if global demand and production from other manufacturers continue to stagnate, which is very likely in view of recent years).

This implies in particular that: 

1. Demand for Tesla cars continues to grow

2. Tesla succeeds in scaling production.

The second point is perhaps the easiest to adress. As explained above, the main challenge now is to build more and more Gigafactories. Tesla has already built one, and can only improve for the next ones. The bottleneck could be the battery production, but this will also affect all other manufacturers. Tesla is in the best position today to overcome this problem thanks to its very deep integration with Panasonic, which manufactures batteries directly from the Gigafactory. The experience and scale of other manufacturers are often mentioned as an overwhelming advantage but the issue here is that their industrial processes are designed for internal combustion engine cars, and it is not as easy as one might think to switch to all-electric. Audi, for instance, is struggling with its e-tron (which by the way charges 2 times slower than a Tesla model 3).

What about demand?

Elon Musk hammered on April 22, 2019 at Tesla Autonomy Day that "There is still in 2019 no car that can compete with Model S of 2012, it’s seven years later"

Allow me to quote at length worried German engineer Alex Voigt in Sept 2018:

It is time to face the uncomfortable truth that the German automakers do not have a single car, be it a gas/diesel car or an electric car, in production or in development today that can compete with the Model 3.

If they had such a car, we would have seen it already, either in production or as a concept version. (…)We have no reason to believe that what happened in the US already will not happen in Europe and Asia on the same scale in the near future.

Even more worrisome, the concept cars and models that have been revealed for the future do not have even specifications like range on a single charge or global charging infrastructure (in charging points or power) that enable them to compete with Tesla cars being delivered since 2012. Most of them are not on par and none are ahead.

We can fairly assume that Tesla will continuously innovate as they have done in the past. If the existing Model 3, X, and S are already today ahead with specifications and the future cars revealed from the German automotive industry is not on par with them today, who do you think will lead the industry in, say, 5 to 10 years from now?

Who will harvest most of the profits? The company that does own an entire value chain from battery production to customer delivery or the company that plans to put an electric motor and a bought battery into the almost unchanged structure of existing gas/diesel cars, selling the electric version through dealerships that do not earn any services or maintenance with them and receive a malus for every EV sale? An example for this is Daimler.

Even the future announced models from BMW, Daimler, Porsche, VW, and Audi for arrival in 2020 or 2025, if we can trust their official statements, are not designed to be better engineered than a Tesla today. If that’s the case, then the undeniable truth is that the German automakers do not have the technical know-how to build a car like Tesla does. That’s true for the past, the present, and with all information we have today, also for the future. Right now, the often cited German competitors compete with the past of Tesla. (…)

For the foreseeable future, Tesla is the only EV producer with a newly defined segment and gains every month more strength to define consumer expectations and behavior. This is true because Tesla has direct access to the customer, a very valuable asset that the retail industry has long defined as a critical, key success factor. The German car industry has a global dealership network that owns the customer relationship and does not have an incentive to sell an EV versus an ICE car. The dealerships will lose revenue if they do. If that is true, why should they?

 

Bernstein, one of the most renowned Wall Street financial analysts is adamant:

“It’s an unparalleled brand”; “let’s make this clear: there is no actual flood of competition coming. We tallied up every announced electric vehicle arriving in the U.S. between now and 2022, and the results were stark”; “Tesla has ‘no credible competition”.

Citron Research is another financial analysis firm that has long bet against Tesla before completely changing its mind last October with an unexpected note in which it justifies its new position: "The story has become too compelling to ignore"

Last January, the American non-profit magazine Consumer Reports named the Tesla Model 3 the most satisfying car in the market. This only reinforces the testimonials of most of those who have been able to try a Tesla and then talk about a transformative experience, the feeling of a leap into the future, and the one conversely of regression after driving any other car.

Tesla's success is all the more impressive because the brand stands out from all its competitors by being the only one not to do advertising!  “Tesla does not advertise or pay for endorsements. Instead” Musk said on Twitter. But Tesla is the brand that generates the most positive word of mouth.

Demand therefore does not seem likely to dry up as Tesla cars continue to improve and be more affordable!

But what is even more fascinating is what Tesla is up to with autonomous driving, that could well end up giving Tesla an unbeatable advantage in the wider automotive sector, and not just in the electric car niche.

Elon Musk was very clear on the topic last February:

“I think we will be ‘feature-complete’ on full self-driving this year, meaning the car will be able to find you in a parking lot, pick you up, take you all the way to your destination without an intervention this year, I am certain of that. That is not a question mark. People sometimes will extrapolate [“feature-complete”] to mean [full self-driving] now works with 100 percent certainty, requiring no observation, perfectly. This is not the case. To be able to fall asleep and wake up at their destinations using full self-drive : by the end of 2020”

And as the Verge reports after the Tesla Autonomy Day, “when asked if these cars would be “Level 5 without a geofence,” meaning they could travel anywhere, under any conditions, without a human behind the wheel, Musk said: “yes. If you have a geo-fenced area, you don't have real self-driving."

Elon Musk goes so far as to say that: "Within two years, Tesla would “probably” stop producing cars with steering wheels or pedals".

His comments are at odds with all that the rest of the industry is saying, to the point it becomes completely confusing for us watching:

• Waymo, a division of Alphabet/Google, is considered by some to be the leader in autonomous driving technology. Its CEO John Krafcik minimized recently the internal launch of an autonomous taxi fleet in Phoenix, saying in November 2018: “The technology is really, really hard. (…) It won’t be ubiquitous for decades, driverless vehicles will always have constraints. Self-driving cars will require driver assistance for many years to come, I don’t envision a day when the technology operates in all weather conditions and without some sort of user interaction." We can also quote Chris Urmson, Google’s Director of Self-Driving Cars from 2013 to late 2016, who said in April 2019 that driverless cars will be slowly integrated onto our roads “over the next 30 to 50 years.”
• Cruise, acquired by General Motors in 2016, also intends to launch its own fleet of autonomous taxis, but without saying where and when. Its CEO Kyle Vogt said in 2017: ”Autonomous driving is the most challenging engineering problem of the decade, if not the century”
• Ford's CEO said in March 2019 that we were far too optimistic about the arrival of autonomous cars. While Ford maintains the 2021 date for the launch of its own autonomous vehicle, it specifies that “applications will be narrow, what we call geo-fenced, because the problem is so complex.”
• Uber, for its part, resumed limited tests after the fatal accident caused in 2018 by one of its vehicles. When asked when we will see the real launch of the autonomous car by Uber, the chief scientist in charge of the program said that is was “the billion-dollar question.” “And the first thing I learned is no timelines, right?”
• As for Nissan, autonomous cars without human intervention are impossible. The chief technology director at Nissan’s Silicon Valley research centre was very clear earlier this year: "Show me an autonomous system without a human-in-the-loop and I’ll show you a useless system"

As a matter of fact, rarely, if ever, have there been such disagreements and differences of opinion in this industry on an issue that seems so essential to its future!

If Elon Musk is right, the magnitude of the disruption will be unheard of!

And Musk holds his promises most of the time, even if late more than once. Honestly, if he’s proven right with only a few years of delay on his ambitious claims, wouldn’t this still all be completely game changing, given what the others are saying above?

Here are some of the promises made very early by Elon Musk:

• build a high quality electric sports car: done (Tesla Roadster) 
• build a high quality more affordable electric car: done (Tesla Model S)
• build a high quality even more affordable electric car: done (Tesla Model 3)
• build more than 5000 Tesla Model 3 per week: done

Now let’s turn to the main takeaways from the Tesla Autonomy Day of April 22, 2019, which help make sense of Elon Musk's bold statements

On the hardware:

• Tesla has developed a new onboard computer dedicated to autonomous driving, based on 2 redundant chips called FSD for Full Self Driving. Redundancy allows security, Elon Musk explains: “The probability of this computer failing is substantially lower than someone losing consciousness."
• About the chip, Musk said: "How could it be that Tesla, who has never designed a chip before, would design the best self-driving chip in the world. But that is objectively what has occurred. And not best by a small margin, best by a huge margin." Musk has recruited a team of stars led by Pete Bannon, a star from Apple.
• The new chip is 20% cheaper than the old one based on Nvidia's technology, while overall the new onboard computer is 21 times more powerful than the previous one used until now (from a processing capacity of 110 to 2300 frames per second).
• This new system would also be more than 3 times more energy efficient than Nvidia's new competing solution "Drive AGX Pegasus" (0.49 Watt/trillion operations/second for Tesla, compared to 1.56 for Nvidia).
• All Tesla vehicles leaving the factory today are equipped with the new FSD computer, and all those purchased since October 2016 can have it installed.
• This system would allow total autonomous driving, as its name suggests, all that remains is to perfect the software (see next paragraph "About the software")
• Elon Musk concludes: “I think if somebody started today, and they were really good, they might have something like we've got today in about three years. But in two years, we'll have something three times better”.

To put this in perspective, let me quote investor and former software Steve Cheney:

 “Building competent semiconductor design capabilities is an absolutely massive endeavor. Despite its original moniker, the Silicon Valley produces almost no venture backed chip companies today. Instead, talented designers post up at the existing old-guard companies such as Qualcomm and Intel. What chip designers crave is seeing their designs solve new and novel problems. Creating and staffing a top caliber team is not for the faint of heart. The fact that Tesla embarked on this and funded it through its dark days of Model 3 hell is unprecedented. Because chips in cars are relatively low volume, no other car maker will be able to enter this game. It’s simply not in their DNA, and volume would also never allow it – sure other car makers have a lot more volume than Tesla, but it’s still two orders of magnitude below smartphones. Both the costs and the risks of designing chips are way too high. Tesla doing this from the Silicon Valley itself is both a by-product of its strategy of “being there” as well as its ability to recruit top designers and architects who buy into the dream and want to be challenged. (…) Making chips could serve as a moat around untold strategic advantages: development secrecy, hyper optimization of image processing algorithms, data security, predictive AI, etc. And all the while their modest yet real car volume serves as ‘R&D lead gen’ for the new chip and software which will power Tesla in 2 years. By owning its own silicon design team, Elon is able to leap into new autonomy problems which will be eaten by software running on its own silicon.”

 

On the software:

• Tesla uses deep learning to develop autonomous driving. And here Tesla's huge advantage is that it has a fleet of 500,000 vehicles in circulation, equipped with sensors and already using certain autopilot features. The miles driven are basically used to educate its deep learning algorithms.
•  Elon Musk says that Tesla vehicles account for 99% of the miles driven by vehicles in autopilot mode worldwide. The remaining 1% is shared by all other car makers combined. That’s a tremendous advantage. The nearly 500,000 Tesla cars in circulation register a total of nearly 25 million kilometers every day, just as many in one day as all Waymo has driven since its start. Given that the Tesla fleet is growing by 5,000 vehicles each week at the moment, we can expect that figure to keep increasing.
• Elon Musk explains himself:

"The thing that's a powerful, sustainable advantage for us is the fleet. Nobody has the fleet. Those weights (of the neural nets) are constantly being updated and improved based on billions of miles driven. Tesla has 100 times more cars with the full self-driving hardware than everyone else combined. At the end of this quarter we'll have 500,000 cars with the full 8-camera setup, the full ultrasonics. Some of them will still be on hardware v2, but we'll still have the data gathering capability. A year from now, we'll have over a million cars with the full self-driving computer, hardware, everything. It's just a massive data advantage. It's like Google has a massive advantage in search, because people use it. People effectively program Google with their queries and their results. (…) Essentially, everyone's training the network, all the time, that's what it amounts to. Whether Autopilot is on or off, it's being trained. Every mile it's driven, at hardware v2 or above, it's being trained."

•  And even when Tesla drivers don't use the autopilot mode, a Shadow Mode allows Tesla to improve by comparing what the driver does to what the software would have done, what happens on the road to what it expects will happen.
• As Tesla's AI director Andrej Karpathy, who is very well known in the industry, points out that, while all manufacturers including Tesla use simulation engines to drive their vehicles virtually, Tesla is the only brand to stand out with such a wide and varied set of real data, the key to achieving total autonomous driving. Elon Musk adds: "We have quite a good simulation too. But it does not capture the long tail of weird things that happen in the real world. (…) The real world's really weird and messy, you need the cars on the road. In simulation, you're fundamentally grading your own homework. If you know what you're simulating, sure, you can solve for it. But the real world is very weird and has millions of corner cases. If someone can produce a self-driving simulation that accurately simulates reality, that in itself would be a monumental achievement of human capability. They can't. There's no way." It is impossible to simulate every possible and imaginable scenario. Tesla has an immeasurable advantage over its competitors because of its fleet and all the niche cases encountered in the real world, whether it rains or snows. Whether you encounter camels, kangaroos, boats on wheels, cars in the air, trucks entangled one on top of the other, unreal construction work scenes, etc. The "long tail" is hard to fully cover completely, but for Tesla, every day that passes, they get closer to 99.999999% of the cases, leaving the competitors far, very far behind.
• Elon Musk explains that progress of Tesla software's artificial neural networks (the "neural nets") is "exponential".
• Each new software improvement can then be transferred to the fleet vehicles in use simply via an update to download "over the air". This is what makes Elon Musk say: “The fundamental message consumers should be taking today is that it’s financially insane to buy anything other than a Tesla. It’ll be like owning a horse in three years. I mean, fine if you want to own a horse, but you should go into it with that expectation. It’s basically crazy to buy any other car than Tesla”
• Today Tesla mainly feeds on images from vehicles that must then be annotated manually before being used to educate its deep learning algorithms, this is called supervised learning, but Tesla is working on a super computer called Dojo that will be able to digest unannotated content and make sense of it to continue improving performance, (what’s called non-supervised learning, or self-supervised learning, as Yann LeCun, one of the deep learning’s godfathers, would say)

 On the advantage Tesla has with its algorithms, its software, let me quote Paul Graham, co-founder of Y Combinator (an incubator that invested in nearly 1500 companies including Dropbox, Airbnb and Stripe, for a cumulative value of 80 billion USD):

“The old car companies think what separates them from Tesla is that Teslas are electric. But they're also separated by the fact that Teslas are software, and that, they will discover, is an unbridgeable gulf.”

 

Tesla's lead is perhaps even greater than it seems if it were to turn out to be true that its competitors are indeed in a dead end regarding major technological choices:

Tesla is the only major manufacturer not to use LiDAR, i.e. laser obstacle detection, while all the others make it a pillar of their technical approach. Tesla focuses on vision in the visible spectrum and its interpretation, which is of course what we do ourselves with our sole eyes. All Teslas built since October 2016 are equipped with 8 cameras, 12 ultrasonic sensors and 1 radar (obstacle detection using radio wave), but no LiDAR.

• Elon Musk blames LiDAR for being expensive and useless, a shortcut leading to a dead end, he says:

"LiDAR is a fool's errand, and anyone relying on LiDAR is doomed. Doomed! Expensive sensors that are unnecessary. It's like having a whole bunch of expensive appendixes. One appendix is bad, now you have a whole bunch of them? You'll see. (…) They're all going to dump lidar. That's my prediction. Mark my words. (…) In cars, it’s freaking stupid, it’s expensive and unnecessary. And as [Tesla AI director] Andrej [Karpathy] was saying, once you solve vision, it’s worthless. So you have expensive hardware that is worthless on the car."

• LiDAR does not work well in bad weather, cannot read signs or traffic lights. It is perhaps this fundamental strategic and technological difference that explains the divergence of views on the imminence of total autonomous driving.
• Who is right? The future will tell us very soon, and Elon Musk radiates with confidence. Hint? Anthony Levandowski, Waymo's co-founder (he has since left), said in May 2019:

"I definitely believed that [LiDAR] was actually the unlocking factor, and a ‘wiser person than me’ said LiDAR is a crutch…he’s right, I believe that as well, and I don’t believe that because I can’t do it, because I’m happy to do that, it’s just not where I think the actual value is coming from."

• Elon Musk must know the advantages of LiDAR. Indeed he directly supervised its implementation on the SpaceX Dragon capsule which now knows how to dock itself to the International Space Station without the help of a robot arm.

Tesla also does not rely so much on high-definition maps, unlike its competitors which spend a lot trying to maintain up to date ones. Elon Musk thinks that this is another dead end, because the environment can change at any time, these maps cannot be kept up to date effectively, so in his eyes it is real-time vision in the visible spectrum that is most important.

Allow me to quote again the investor and former engineer Steve Cheney on why Elon Musk talks about exponential progress in Tesla algorithms, which makes the link with the subject of LiDAR:

“Data collection is increasing at a linear rate for Tesla, but there is another thing that people don’t see. Improvements to the overall system are improving exponentially because mathematics around post-processing of image data are too.

The part that hasn’t been talked about – even by Tesla – is what they are doing around new mathematical transforms to make the data much more robust. 3D image processing – connecting frames of data and applying transforms in new ways – is an incredibly robust area of research, since image processing touches almost all fields today.”

(…)

“The innovations happening in complex transform mathematics to make the matrix manipulations of collected data much more robust are improving at insane speeds today. Specifically for self-driving, they are focused around software algorithms to perform image depth sensing, and they are evolving FAST. This approach on pseudo-LiDAR depth estimation from Cornell just last week is telling. They model depth by creating a pseudo LiDAR point plane of out of raw image data. Their conclusions astounded even them:

‘The improvements we obtain from this correction are unprecedentedly high and affect all methods alike. With this quantum leap it is plausible that image-based 3D object detection for autonomous vehicle will become a reality in the near future. The implications of such a prospect are enormous. Currently, the LiDAR hardware is arguably the most expensive additional component required for robust autonomous driving. Without it, the additional hardware cost for autonomous driving becomes relatively minor.’ ”

Steve Cheney concludes :

“The reason Elon says LiDAR is a myth for self-driving is that it’s a hardware level advancement that relies on someone productizing a solid-state device and commercializing it in volume. The truth is that the way the semiconductor supply chain works will keep LiDAR hardware unachievably high cost, and impossible to get to economies where a chip company can justify actually making a profit. LiDAR is low volume and niche in nature. Who else needs LiDAR outside of the car industry? Almost no one.”

“LiDAR is a flawed approach and a myth. It’s not necessary, and will become obsolete as 3D image processing mathematics push what’s possible with collected data to the human eye’s extreme. And the gap between point-plane information from LiDAR and what’s collected in the visible light domain will be fully closed in the next 3 years.”

 

 One last argument in favor of Tesla: mid May 2019, Tetsuya Iijima, general manager of advanced technology development for automated driving at Nissan, the current 5th largest carmaker, said:

“At the moment, LiDAR lacks the capabilities to exceed the capabilities of the latest technology in radar and cameras. (…) It would be fantastic if LiDAR technology was at the level that we could use it in our systems, but it’s not. There’s an imbalance between its cost and its capabilities.”

 

And to go further, say hello to a fleet of one million robotaxis!

Finally, if the above was not already crazy enough, Elon Musk promises us that the 500,000 Tesla already in circulation plus 500,000 that should have been sold within a year, will be converted into a fleet of one million autonomous taxis, known as "robotaxis", overnight, thanks to the ultimate update discussed earlier, giving them full self driving.

Elon Musk: "A year from now we'll have over a million cars with full self-driving, software, everything. The fleet wakes up with an over-the-air update.”

Elon Musk explains that all Tesla owners will be able to decide to add or remove their vehicle from the taxi fleet, called the Tesla Network, with a tap on their Tesla app, as they see fit. A good way for them to make their car profitable when they don't need it, and for Tesla to get rich by taking a 25-30% commission in the process. Musk explains that Tesla would then become "extremely profitable".

Tesla vehicles may only participate in the Tesla Network and under no circumstances may they be used by Uber, Lyft or others. Elon Musk actually just declared war to them!

While there are many reasons to take Elon Musk seriously on all that was discussed until then, one can remain skeptical about this latest announcement and its timeline. Especially when asked who would be liable in the event of a crash involving a Tesla robotaxi, Musk said “probably Tesla.”, as if he wasn’t completely sure and had not done his homework about it.

Conclusion

At Tesla Autonomy Day, Elon Musk announced a target of 10 million Tesla in circulation within 5-6 years. 

The automotive sector is undergoing 3 major disruptions:

• the transition to electricity
• self driving
• uncertainty on the business model: will people still own their cars tomorrow? Or will we mainly use taxis?

Tesla is clearly in the lead on the first one, seems to be even more technically advanced on the second one (and we will know soon enough what the matter is), and has a clear vision for the last one.

The Tesla Model 3 is just beginning to sell in Europe and is already the number one selling model in several countries. The demand is there, reviews are raving. All Tesla has to do it seems is to build more Gigafactories, which is planned.

Elon Musk is known for unfortunate words on Twitter from time to time, and Tesla may need to raise money again, but the hardest part seems to be behind. At current pace of acceleration, Tesla can expect to become the world's number one within 10 years at the latest, perhaps even sooner.

In 2011, Marc Andreessen, cofounder of Mosaic, the first web browser and then of the Andreessen Horowitz investment fund, wrote an article in the Wall Street Journal, which caused quite a stir, entitled Why Software Is Eating the World. It described how software would inevitably and fundamentally transform all industries, one after the other.

Until now, in the eyes of the general public, software has mainly "disrupted" entertainment and communication: access to computers with Microsoft, to information with Google, contact with relatives with Facebook, Skype, Whatsapp, etc.

Retail is going through it, with the Amazon wave. But after all these years, even if Jeff Bezos' firm dominates e-commerce, it still represents only 10% of retail at large.

The automotive sector could be the first BtoC industry, one of the flagship icons of the "offline" economy, to be completely disrupted by software.

Beyond seeing Tesla become number one before 10 years, the stakes are actually much higher. It is even plausible that Tesla will become the Google of Search, the Amazon of e-commerce, the overarching leader of a market that has become a de facto monopoly (not necessarily for the worst for consumers, as Amazon proves with its obsession with ever lower prices, wider choice and faster delivery).

This seems inconceivable to us because we have been used to a century of fierce competition between car makers. But since self-driving seems to be the horizon of the industry, if Tesla indeed has the best software and the largest and most varied database by far today already, and if it continues to improve faster than others, and can scale production quickly with its Gigafactories (the Shanghai one will be ready before the end of the year), then we cannot rule out this outcome, and that would be mind-blowing.