1/ Compare: "What stands out most in Nikkei teardown of the Model 3 is Tesla's integrated central control unit, or ‘full self-driving computer.” Tesla developed the chips on its own, along with special software designed to complement the hardware."
asia.nikkei.com/Business/Autom…
2/ "Nikola is relying on Californian manufacturer Romeo Power Technology for batteries for one of its prototype electric trucks. The use of an established industry supplier is the second example of the start-up outsourcing a key technology." news.google.com/articles/CAIiE…
3/ "competitive forces will drive returns down to the cost of capital over time. If a company earns above market required returns, it will attract competitors that will accept lower returns, eventually driving industry returns lower." Michael Mauboussin people.stern.nyu.edu/adamodar/pdfil…
4/ "Suppliers are well positioned if they are more concentrated than the industry they sell to, if substitute products do not burden them, or if their products have significant switching costs." Michael Mauboussin research-doc.credit-suisse.com/docView?langua…
5/ Buying a component from a supplier who will sell to any other OEM isn't a barrier to entry. Assemblers of commodity components are toasters. Without some scarcity returns for a business inevitably drop to the opportunity cost of capital. morganstanley.com/im/publication…
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