Legacy automobile manufacturers producing and selling internal combustion and transitional electric vehicles.
2 takes · first discussed Jan 4, 2025
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Chamath predicts the collapse of traditional auto OEMs as Tesla's competitive advantages trigger a wave of consolidation, with European OEMs like Volkswagen and Stellantis effectively becoming 'melting icebergs.'
Gavin Baker agrees that legacy auto OEMs are in deep trouble, caught between Tesla and Chinese OEMs with no competitive products, and the only saving grace would be significant government intervention.
Both Chamath and guest Gavin Baker hold high-conviction bearish views on traditional auto OEMs, agreeing that legacy manufacturers face an existential threat from being squeezed between Tesla's competitive advantages and the rise of Chinese OEMs. Chamath specifically singles out European players like Volkswagen and Stellantis as "melting icebergs," pointing to the Honda-Nissan merger as an early sign of forced industry consolidation. Baker reinforces this view, adding that legacy OEMs are losing their Chinese market share due to uncompetitive products, and argues the only scenario that could soften this outcome is significant government protectionism. The two are fully aligned in their bearish outlook, differing only in that Baker explicitly frames government intervention as the sole meaningful risk to Chamath's collapse prediction.
Chamath predicts the collapse of traditional auto OEMs as Tesla's competitive advantages trigger a wave of consolidation, with European OEMs like Volkswagen and Stellantis effectively becoming 'melting icebergs.'
I think that the deal that happened at the end of 2024 with Honda and Nissan... is a bit of a signal to what the industry has to do... the European OEMs are in real trouble. You know, what does Volkswagen do? It's not clear. What does”47:05
Gavin Baker agrees that legacy auto OEMs are in deep trouble, caught between Tesla and Chinese OEMs with no competitive products, and the only saving grace would be significant government intervention.
They're going to lose their Chinese business because they don't make competitive products anymore. If there's not massive protectionism... they'll be caught between Tesla and the Chinese OEMs. And I think the only way that this doesn't—”48:59