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Leonid Bershidsky

BMW as the Next Nokia? Nonsense

The German car industry is too agile to get steamrolled by Tesla.
Dinosaur? Hardly.

Dinosaur? Hardly.

Photographer: Andrew Harrer/Bloomberg

In the second quarter of 2017, Tesla burned $1.16 billion in cash and BMW's positive cash flow from operations hit $1.75 billion. But that enormous difference is meaningless, the last gasp of a dinosaur -- at least according to the two car companies' comparable market caps, the media and political backlash against the German car industry, the universal disparagement of combustion engines, and the rave reviews of the Tesla Model 3. German carmakers are now being compared to Nokia in the first years of the iPhone. 

It's not that simple. Neither the German auto manufacturers nor combustion engines -- even the diesel variety -- are doomed, and BMW's profitability has a lot to do with this.