Vertical integration has the potential to be more optimized for manufacturing, but you run into a few issues:
vendor lock in. Imagine if only Tesla owned the available mines, no other company could get materials for batteries and they’d have a lock on the market
having so many lines of business to manage, you can’t specialize in certain things unless you are a megacorp like Mitsubishi
high barrier to entry. Rather than starting with wanting to make a good car and sourcing the best parts you have to make everything from scratch
Most of those reasons come down to the fact that it stifles competition. Look at what happened with movie companies owning the distribution and playback and how it’s happening again with Streaming services.
Look at what’s happening in Canada to a much more necessary service. Our grocery chains are heavily vertically integrated, and they gouge us all to hell.
Loblaws owns everything in the supply chain from production to logistics and then some. Not only are they hugely integrated through the food supply chain, but they are also able to leverage their assets to provide financial services, have bought out one of our biggest pharmacy chains, and are currently trying to expand out into the telecommunications business.
What happens when one company owns everything? Well, they get to do whatever they want, basically. When anybody comes around to regulate or otherwise try to reign in the bullshit, they’re simply told to fuck off, because they have nowhere else to turn.
Vertical integration sounds great from a business perspective, but it is truly awful for the consumer long-term.
I’m sure a more vertically integrated supply chain comes with its own problems. I don’t think there’s a perfect solution. Even if the current US model better promotes competition, that doesn’t seem to be making EVs more affordable.
Though entirely removed from the situation, one large thing tends to be more efficient than many small ones.
So back to our situation here, China’s better figured out how to integrate this, allowing them to do more with less. Over a large enough timeline, this is all but a death sentence to america unless we can all stop acting like children for 5 minutes and work together.
This is why a superrich class is not only dangerous to an individual (ie food security), but to the country as a whole.
Vertical integration has the potential to be more optimized for manufacturing, but you run into a few issues:
Most of those reasons come down to the fact that it stifles competition. Look at what happened with movie companies owning the distribution and playback and how it’s happening again with Streaming services.
Look at what’s happening in Canada to a much more necessary service. Our grocery chains are heavily vertically integrated, and they gouge us all to hell.
Loblaws owns everything in the supply chain from production to logistics and then some. Not only are they hugely integrated through the food supply chain, but they are also able to leverage their assets to provide financial services, have bought out one of our biggest pharmacy chains, and are currently trying to expand out into the telecommunications business.
What happens when one company owns everything? Well, they get to do whatever they want, basically. When anybody comes around to regulate or otherwise try to reign in the bullshit, they’re simply told to fuck off, because they have nowhere else to turn.
Vertical integration sounds great from a business perspective, but it is truly awful for the consumer long-term.
I’m sure a more vertically integrated supply chain comes with its own problems. I don’t think there’s a perfect solution. Even if the current US model better promotes competition, that doesn’t seem to be making EVs more affordable.
Though entirely removed from the situation, one large thing tends to be more efficient than many small ones.
So back to our situation here, China’s better figured out how to integrate this, allowing them to do more with less. Over a large enough timeline, this is all but a death sentence to america unless we can all stop acting like children for 5 minutes and work together.
This is why a superrich class is not only dangerous to an individual (ie food security), but to the country as a whole.
So we essentially can’t be more efficient cause greed.
Yay.