“Life doesn’t look viable for Tesla as a vehicle manufacturer, maybe autonomous software.”

And here’s the core of it.

If I were Musk, my goal would be to get to a point where a huge player–GM, Amazon–buys my business for a lot of money.

I don’t care if it’s to quash what I’ve done, or to use it as a springboard to take their own business to the next level. I would just take the money and run.

Regardless I would recognize that I’m not GM, and that actually to compete in their world is not realistic.

GM should buy Tesla, and make it the next Saturn. Which is exactly what would happen. The cars would start out being today’s Tesla, complete with the dealerships and service organizations. Then it would morph into the cars being nothing more than an electric Impala with some Model S body cues and a Tesla badge. Then they would shut it down completely–but by then they’d have a good handle on the technology and its requirements for being in the marketplace, and suddenly GM has an already-built roadmap to an advanced all-electric future, should they need it. Plus they’d have the SuperCharger network. That alone is worth something.

For reference, imagine that you came across the formula for the Coca-Cola syrup. Imagine you could duplicate the Coca-Cola drink, every time, from fountain to can to 2 liter bottle. Chemically and on the palate, it’s indistinguishable from what the Coca Cola company sells and distributes and licenses. Great. Now what?

Are you going to compete with Coca-Cola in the marketplace, just because you have a product that’s indistinguishable from to theirs?

Now consider that Tesla isn’t in that competitive place yet. Tesla is you with a good syrup, trying to figure out how to get people to buy your stuff instead of Coca Cola based on nothing more than “it tastes the same”. Yes, their cars get you from A to B, and are full of luxury items. But the fueling system is radically different, and for many purposes is markedly inferior to the product that GM sells. So that’s already a negative.

So GM could take Tesla and ADD it to their stable, and have an alternative for people who are already coming into their established dealer network for sales and service.

But more importantly, GM could take a gaggle of summer interns and integrate the Tesla stuff into their VERY well established product development, manufacturing, marketing, and sales operations. For GM, this is like buying a fax machine and figuring out what desk or file cabinet to stick it onto–nothing more complicated. But for Tesla, they have to reinvent that development/manufacturing/marketing/sales/service wheel from scratch–not an easy task, as Musk can see.

Those Model 3 reservations may be the straw that breaks Musk’s back. You can’t keep the momentum going that long in this world, especially when you’re playing in the tech world that has a 35 day cycle. He took their money, and now the shine has worn off the entire thing, and now he’s clearly struggling to deliver their vehicles.

Over 500,000 people have put up around $1000 each for the Model 3 reservation. If this were some guy in an office on Main Street, promising investment returns, he’d be in jail by now for not delivering or returning the money.

Can Musk return the money? Or was this a Go Fund Me to build the factory and lines and pay for the engineering, and now it’s all gone?

Do the math. 500K reservations, add three zeros, it’s $500,000,000. Five. Hundred. Million. Dollars US.

Yeah, the “investment” guy would be in jail. He might have used the money to build a Taj Mahal of an office, complete with a huge staff, but without his product–investment returns–getting into the hands of his customers, he’d be in jail.

Did Musk use that US$500 million to create a very buyable business? Was that his plan all along? Did he predict, in any way, the struggles he would have to deliver product?

Marketing is cheap, and using marketing he created a HUGE initial buzz around the 3. Did he use that marketing to create the buyable business, and leave the onus of delivering product to the buyer? Sounds very west-coast-tech BS to me.