Part 8/11:
A noteworthy insight from Morgan Stanley suggests that traditional automakers might consider sticking to internal combustion engine (ICE) vehicles for longer, given their existing investment and capitalization in that space. They argue that EV manufacturing is so capital-efficient that dedicated EV makers like Tesla could outperform legacy competitors by focusing solely on EVs while others struggle with inefficient transitions.
This perspective underscores the looming threat of a bubble in auto financing, which could lead to a systemic collapse akin to or worse than recent banking crises. The impending wave of loan repossessions, falling vehicle values, and unrecouped debts threaten to destabilize the industry—yet Tesla appears insulated due to its operational model and market approach.