Tesla Is In A Race To Avoid Getting Crowded Out In A Segment It Currently Dominates
"At left: A Duesenberg 935 SJ LaGrande Dual-Cowl Phaeton. Duesenberg was the Tesla of its time, being the first auto maker to produce the first American passenger vehicle with hydraulic brakes and a straight-8 engine. The price of a "Duesy" was significantly higher than mass produced cars at its time. Despite making a beautiful, critically acclaimed car, Duesenberg lasted only 24 years and made less than 2,000 cars. The cost was just too high for the mass market and the company failed to scale up like Ford did. At right: The Tesla Model S. Wikimedia Commons/Tesla" Source: http://www.ibtimes.com/tesla-tsla-race-a...
What Duesenberg's story proves is that in a capital-intensive industry such as automobiles, a great car doesn't secured a win. And the competition doesn't sit idle and watch a great product succeed; it learns, adapts and innovates to build a better car, or at least an adequate car accessible to a wider pool of consumers.
Which is what General Motors (NYSE:GM) and other mass producers are trying to do right now.
This is a great potential area for growth for GM.
Why should Tesla care about GM or Nissan? They're going after the Lexus and BMW market.
Because it is rare to change brand preference for people into Lexus and BMW.
And both GM and Nissan want to keep moving up-market.