California ban gas cars is a boon but also a challenge for Tesla - Business Insider

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California's ban of gas-powered cars by 2035 looks great for Tesla, but could distract the young automaker from its best chance to grow

For Tesla, an ideal position isn't actually ideal for capturing future market growth outside the US

For starters, the overall new-vehicle market in the US isn't going to grow. In fact, it isn't clear that Tesla's considerable sales have displaced sales of gas-powered vehicles, or whether the company has simply created a sort of parallel market in EV sales — in effect creating new market share that it can dominate.

Tesla is already operating the sole remaining vehicle assembly plant in California. Adding another facility in the heavily regulated state would be expensive and time-consuming, a contrast with Tesla's new plant in China, which went from a hole in the ground to rolling out vehicles in 15 months. That's the risk. Fortunately, Tesla is no longer going it alone. Both Ford and GM are moving aggressively to introduce EVs, and both carmakers see California as a growth opportunity for them, given their historic sales weakness in the Golden State. The top two US automakers control 30% of the total US market, but in California, their Japanese competitors own almost half the yearly sales.

 

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That ship sailed already

Tesla is bigger than you think.

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