I think Tesla has shown that all EV's need to be built from the ground up if they want to make them competitive. An EV is inherently different from a gas/diesel car and using the same "form factor" means you are compromising the strengths an EV can bring to the table. The sad reality is that a major manufacturer doesn't want to show an EV's superiority for fear that it will impact their ICE/hybrid sales. Tesla probably has until 2022-2023 until we see someone make a truly competitive vehicle. That vehicle will probably be built in relatively small numbers just to test the waters....
It's going to happen but the major manufacturers will drag their heels as long as possible.
Up until the last couple of weeks, this is exactly how I've viewed and would have described the competitive response to Tesla. However I've been reading The Innovator's Dilemma recently, and I'm beginning to formulate an alternative explanation that I find more satisfying.
I'm still working on it, but the idea is that in the explanation above, we end up with something akin to malevolence or incompetence as the explanation for the competitive response. And I find that dissatisfying, if for no other reason, I've never encountered a human being that was actively and consciously, from their own point of view, being incompetent / blind / stupid (or malevolent for that matter, but I tend to think we're more likely to see a little of that in the wild). So if we don't go with incompetence as the explanation, what could explain Audi being so far behind? And seemingly not understanding it?
You'll need to read the book, and I'll need to develop the idea further, but the germ is that with a disruptive innovation, you have new customers and a new market from the established market. And for companies in the established market, their internal decision making processes from the individual contributors, through front line and middle management, and on up to the executive staff are all geared to make decisions in support of their existing market. Typically there is a margin issue with disruptive innovations, where the disruption has lower gross margins than the current product, and thus the decision making is geared to sustaining current margins. Not an issue here.
One idea I'm still toying with is that Audi's customer isn't you and me - the end consumer / purchaser of their car. In fact, outside of Tesla, the customers of the car manufacturers are the dealerships. That is at least true in the USA, and it causes me difficulty in explaining how the distribution channel could have captured the manufacturers in Europe or anywhere else that lacks dealership laws (maybe one of my international friends can help out).
But at least in the US, dealerships buy cars from manufacturers. And the dealerships therefore 'control' the resources of the manufacturers.
I'll develop this idea more completely another day, but the conclusion for me right now for investing purposes, is that Tesla stops being disruptive and becomes innovative (using Christiansen's terms) the day they have third party dealerships that they sell to. And on that day, I will need to reevaluate Tesla as a car company, instead of as a disruption to the car industry.
Back to Audi - the insight also provides a way of thinking about Audi's decision making that doesn't cast them as incompetent - it casts them as a company that is closer to their customers, a company that is very good at understanding and providing what their customer's demand. And I find that more satisfying, while also shaking my head in despair at their inability to realize the existential threat to their company that is alive and afoot in the world. That is the ultimate message for me from Innovator's Dilemma - good decisions, good business management, all in support of one's customers are the very same set of values and decisions that put you out of business in face of disruption.