Legacy automakers risk the fate of Kodak
Baillie Gifford & Co.’s Iain McCombie said in an interview that too many people are focusing on controversial tweets posted by Elon Musk instead of the huge opportunities ahead for Tesla.
Tesla is now selling in the U.S. more cars than Daimler and if we really think that EVs are the future, there is almost unimaginable potential of growth for electric cars (but also other Tesla businesses like solar roofs, energy storage, autonomous driving and trucks).
This is why long-term investors like Baillie Gifford (the third largest shareholder of Tesla) backs Tesla, while those engaged in legacy automakers need to decide what those manufacturers should do. Invest in EVs or risk the fate of Kodak, who missed out on the digital camera future.
Kodak developed the digital camera, but missed the opportunity. Today (well, 5 to 10 years ago actually), everyone in the automotive industry knows about electric cars, but there are still many manufacturers that are doing almost nothing. Another Kodak moment ahead for those who fail to see the future?
“There are lots of risks, of course, and “we could still be wrong”, McCombie makes clear. But it is the traditional car makers who are under pressure, he claims, suggesting this could be their “Kodak moment”.
“They spent hundreds of years building up their knowhow in industrial combustion engines and they do a great job with that, but what happens if all of us are suddenly saying ‘oh, I want an electric car’? Suddenly, that knowhow is useless,” he concludes.
“What happened with Kodak is they actually discovered the digital camera, but they buried it because it was too frightening for them. They thought it would kill their film business. But the fact that they didn’t innovate killed Kodak.””
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