Musk’s Insane Plans to Upset the Automotive Industry
Yesterday we talked about Lordstown Motors — the new kid on the block when it comes to electric vehicles.
Its stock, whose symbol is soon to be renamed from DPHC to RIDE, has experienced some massive FOMO buying in the last couple days.
And for good reason.
The potential product they’re touting seems efficient and innovative. And best of all, because of their location in a previously owned GM manufacturing plant, they have huge production potential.
The question remains, though… Will this new company succeed, or will it fall flat on its face like the many tech IPOs that came before it?
Fortunately for us, we don’t need to look very far to find the answer…
Musk Upends the Auto Industry
As we discussed yesterday, Lordstown Motors and GM still have a positive, fruitful relationship.
GM decided to fund an addition $75 million to the EV startup, as well as pay a slew of costs to operate the plant itself.
GM has seen major hiccups in competing in the EV industry against names like Tesla and Nikola.
So it only makes sense that they would see this new startup with Lordstown Motors as a way to keep a foot in EV development.
For Lordstown Motors, it’s a win-win situation. They now have the capabilities of properly getting their business off the ground without the fear of huge upfront costs like building a factory.
But what if their product is a dud?
All this money on R&D, marketing and production would all go down the drain…
One would think the competition would outsell them and that would be the end of the story.
But that’s not likely to be the case, as pointed out in a recent tweet by Elon Musk…
This is an insane proposition.
Think about what a statement like this would mean in any industry — including the automative industry.
If Ford or GM back in their day came out and said “We’re not here to crush our competiton and would be happy to supply our parts to other companies for the good of the industry,” it’d be insane.
American competition is cutthroat. It’s eat or be eaten.
Musk and Tesla are different. They cracked the code to electric vehicle design a long time ago, while many others in the industry are floundering to get a good product out.
Licensing out his tech to make it so better tech can be developed is a sneaky way for them to generate more cash flow.
Musk’s approach to this and many of his other ventures is odd. But given his background, it makes sense.
He found major success at PayPal and has adopted the “open source” mentality that’s been wildly successful for major software companies.
A collaborative model means you constantly push innovation in the industry. Amazon Web Services (AWS), for example, is Amazon’s open-source cloud platform. And in 2019 alone it generated $35 billion for Amazon.
Amazon’s not alone either. Google, for instance, takes a collaborative approach with many of its projects — including its Android operating system, which is the most popular smartphone OS in the world.
This collaborative model will soon be applied to the EV industry as a whole.
And Lordstown Motors will only benefit from this open-source database of technology.
Right now, you have a chance to profit off of Musk’s next challenge — space.
To a bright future,