I've said this before and now I'll generalize my statement to say that the most important issue in the electric vehicle segment is and will be that of high power and high voltage system safety, of which the battery is one component. If the public becomes spooked by problems and accidents in this area it could set the electric vehicle market back a decade or more.

The real test for electrics will come when one or two million electric vehicles of all types are sharing the road. That's when this issue of battery and power system safety will be hugely important. I can imagine semi's with a million Wh battery systems rolling down the highway. What I cannot imagine are chain reaction collisions involving a variety of electric and liquid fuel vehicles.

Tesla is at the forefront of this movement, which means all eyes are on them, the arrows are on their backs and they have the burden of proof.

One of the most expensive types of businesses to get into are those where you have to educate your customer base before a sales pitch can even begin. Having to educating the market before you can sell to them can seriously derail one's focus and cost bundles of money that could be put to better use elsewhere. I've been in markets like that. It's a horrible slog.

Up until now, for the most part, electrics have avoided this territory. I fear that period is ending. Up until now the conversations about electrics were about range and relative cost when compared to gasoline vehicles. It feels like we are now entering the domain of having to potentially prove to the market that the technology is safe as well as to remove (or stop the potential of the development of) fears of fire and electrocution.

Tesla, due to their position in the market, has the honor of having all microscopes aimed at everything they do. Every mishap is amplified. Now that the NTSB has officially opened an investigation every afternoon news show is jumping on the issues. It will soon be everywhere. And Tesla now has to defend, educate and prove to the market that what they are doing is safe.

Competitors are now going to pull back and let Tesla take the hits. In markets where a huge investment is required in order to educate the customer base it is often a good idea to not be a pioneer. They will let Tesla burn reputation, bleed cash and resources to deal with the challenge of getting people to be comfortable with the technology. In these markets letting someone else slot through this phase is often the most intelligent strategy.

Once things settle, competitors will come in and enjoy a market segment that has been paved flat by the pioneer/s. It is far less costly --at all levels-- to enter at that point. The mentality of a typical potential customer --after massive investments in educating them-- is now very different. Now customers look at the available products and think about which one to buy rather than whether or not to take a risk with this new technology. That's a massively different mind-set. That's a mind set primed for well executed product, marketing and sales strategies with wide distribution, solid sales channels and a solid post-sales support infrastructure --all of which the established players either know how to do or already have in place.

Manufacturers entering the market after the education phase can focus on pricing, marketing and, in general, execution rather than educating or evangelizing the audience. There's a huge difference in cost of sales in "nicely paved markets".

When that happens, when the market is "flat" and competitors enter in force, they could run right over Tesla, push them right off the edge of the market or they could be swallowed-up by a larger organization. Let's not forget Tesla sold somewhere in the order of twenty thousand cars --total. There are companies that probably sell that many cars per day. The difference in scale is huge.

It is possible that Tesla is at the start of an existential threat. It is hard to predict which way this will go. It's all on them now and they are all-in. They can't afford many more fires. And they certainly can't afford to have the market turn on them. They need to be way ahead of this and spend lots of money to show people this technology is safe. And, if it isn't, they need to move quickly to make it safe and then show the market. Quickly.

Volvo used to run commercials featuring cars being rolled and crashed in order to show how well they protected occupants. Tesla might have to crash a few cars into concrete walls or into each other to demonstrate how survivable their high voltage and high current systems might be. If they don't get ahead of this and more accidents are reported the cost to regain market trust will grow exponentially. And that could be very difficult to survive.