Traditional automakers are still driving in Tesla's dust, which is unstoppable. This week the company reported earnings, revenues, and deliveries for the first quarter, which surprised even the most bullish analysts.

The EV pioneer is riding a solid demand for environmentally-friendly vehicles by rolling out new factories at unprecedented speed.

"Public interest in a sustainable future continues to rise, and we remain focused on growing as fast as is reasonably possible," said the company's management to shareholders. "Expansion of our production capacity is core to our decision making. In the past two months, we began deliveries of Model Y from Gigafactory Texas and Gigafactory Berlin-Brandenburg (negligible impact on Q1 gross profit)."

Rapid expansion has helped Tesla scale up its operations, strengthening its competitive advantage, evidenced by a record 19% operating margin. That's more than twice the operating margins of Ford and General Motors.

Wall Street has noticed. In the last five years, Tesla's shares have outperformed the gains of the S&P 500 by more than 20 times, while GM and Ford registered meager gains that underperformed the overall market.

But why have legacy automakers failed to catch up with Tesla in the EV race? For several reasons.

Top on the list is a delayed start. For years, traditional automakers took a wait-and-see attitude, letting Tesla take the risk of testing the market, and then come to “colonize” it. That’s a conservative strategy large corporations apply when it comes to untested technologies.

Then there's the "innovator's dilemma," the problem well-established companies have in adopting new products and technologies which undermine their core businesses. In this case, EVs undermine the future of traditional fuel-powered vehicles.

"At a very high level, the legacy manufacturers have been scrambling for some time now and are playing catch up to Tesla, which never sold anything but electric," says Richard Reina, Product Training Director at “Tesla has cleverly elevated itself to be the darling of EVs and has had untraditional success. For example, look at what Tesla's best-selling model is: the Model 3, which is a 4-door sedan, a model that some other manufacturers have entirely removed from their inventory."

And there's the old fashion way traditional automakers are doing business, trying to turn an old fuel-powered vehicle into an EV rather than starting from scratch. "Their initial attempts at EVs were done by taking a traditional gas-engine vehicle, removing the drivetrain, and replacing it with batteries," explains Reina.

But the situation could change, as EVs are crossing the “tipping point,” reaching the mass market, where price and product differentiation becomes a critical factor in enticing people to shift from conventional vehicles to EVs.

"Tesla has shown success while everyone continues to play catch up, but things could change," adds Reina. "If Tesla becomes too expensive or their quality suffers, or they can't keep up with demand for their cars while legacy manufacturers make EVs more affordable, this entire landscape may shift."

That may already be the case, as evidenced in the recent NY auto show. Traditional automakers have been back to the drawing board, producing scores of new EV models. Meanwhile, the demand shifts from conventional EVs to pickups, where conventional automakers, like Ford, have an edge.

"Now that they've gone back to the drawing board, the legacy automakers are starting to figure it out," adds Reina. "The most popular line of vehicles in the U.S. are pickup trucks, and Tesla is behind the 8-ball with them after delaying their controversial Cybertruck many times. Rivian, GMC's Hummer EV, and the Ford F-150 lightning are all EV pickups that may grow the segment before Tesla even launches their pickup."