Mercedes will never kill Tesla – It's Blackberry vs. Apple all over again.
When I say Mercedes, do you think of an electric car? Thought so – that's exactly why they'll never win over Tesla.
⌚ Too lazy to read for 4 minutes? Here’s the TLDR Summary:
⚡ Yesterday (Sept. 3rd), Mercedes showcased a beautiful CLA electric car concept (video below.)
📊 They’re trying to compete with Tesla, which had a 62% market share in 2022.
🛞 But the real problem is much easier than what analysts are thinking of — it’s the Mercedes brand.
📱 History always repeats itself:
A while ago, Apple pioneered the smartphone market (per se.)
Blackberry ignored it, and then Apple prospered.
Later on, Blackberry desperately created good smartphones but eventually faded out of existence.
Recently, Tesla started the EV market (per se.)
Mercedes ignored it for a while, and then Tesla prospered.
Mercedes is desperately creating good electric cars. But you know what’ll happen next.
📉 This is quite natural in any business’s life cycle – There has to be a decline for others to grow.
Mercedes just announced a beautiful electric vehicle.
I’m not really a car person. I prefer walking or flying (but more like Superman because airplanes are not that good for the environment.) This reminds me — I recently interviewed the founder of Alef Aero, the flying car company.
Nonetheless, this vehicle is quite beautiful. Instead of talking about it for hours, I’ll show you a video. That’ll be easier.
But in terms of performance compared to Tesla, here’s what you should know:
It’s still a concept car but “ready for production” (Expected in late 2024.)
It’ll have rapid charging of 800-volt (400v for Tesla’s because Elon believes that they don’t need to rush a redesign.)
It can achieve 400 miles (similar to the Tesla Model S.)
Automated driving (slightly similar to Tesla’s.)
Honestly, this sounds incredibly boring to me; I’m more into the looks of the car (yes, I’m that kind of person — my father is not proud.)
Now let me tell you why this beautiful vehicle won’t matter in the business world.
Tesla’s Entrepreneurship
Tesla has a 62% US market share in 2022, according to Bank of America. The EV market itself is definitely on the rise. But that’s just relatively new. Go back in time, around 15 years, and you’ll notice that the EV market was almost nonexistent.
The thing about entrepreneurship is it somehow rewards the people who believe in a certain product more than others. They get what’s called the “first mover’s advantage.”
Now, this perk doesn’t guarantee a win. But it gives a huge edge in the race. Tesla took this perk to the next level and became worth billions from absolutely nothing.
They have successfully become the first thing you think of when you hear the words “EV.”
Mercedes, on the other hand, has been branding themselves as a luxurious car. This image will always be there.
“Oh, she’s driving a Mercedes.”
“Maybe if I make a ton of money, I’ll buy a Mercedes.”
“You’re so cheap! You have a Mercedes and don’t want to buy a cup of coffee for $5?”
But this whole thing happened before in the business world. Let’s take a trip back in time.
Blackberry — stubborn, desperate, then faded.
Steve Jobs created Apple, you know that. Companies like Nokia and Blackberry ignored it at the start.
They went from, “Touch screen and internet? Not going to happen,” to “Oh, our latest touch screen internet phone is much better than the iPhone.”
This cycle of ignoring, then becoming desperate, usually ends in decline and failure. But that’s not 100% of the time. Let me give you an example.
ChatGPT trended like crazy beyond the dreams of anyone. But nowadays, the hype is starting to fade. This gives an opportunity for Google to catch up and create a stronger product.
The business world today is not the same as the one of Nokia and Blackberry. However successful they were, they were nothing compared to Google nowadays. The influence that tech companies had went from “Oh, it’s just my phone” to “I need my phone right now.”
Since Google dominates a big chunk of this market, they’re able to stand up to ChatGPT.
But Mercedes doesn’t have that big chunk of the market, and it still is “just a car.”
Don’t get me wrong — Mercedes has probably a bigger market share than Tesla. But not a bigger EV market share. Tesla dominates that at the moment.
I’ll leave you with one note—this is quite normal in the business world. Each company has to fade one day or another to make room for a new startup out there.
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AL Anany