I'm am conflicted over the whole tesla thing. The model S is a truly great car but I can't stand Elon's hype about self driving cars etc, etc. The model 3 got off to a rocky start but it sounds like the quality issues are improving. On the one hand I want them to succeed as they have been real innovators but by the same token when musk goes around hyping things up to create interest and bump up the stock price I would be happy to see them crash and burn.
How difficult is it for BYD to clone his autopilot chip and will that stop the Chinese from exporting knockoffs because I'm certain they can close the data and software gap instantly by swapping out a harddrive or 10.
I think he's got 10 years before the chinese chip fabs catch up.
Musk's question how did Tesla build the best AI chip for driving in the world without being a chip designer was the far more interesting yet overlooked question.
Musk has a talent for framing problems appropriately so that optimum solutions emerge with a minimum deployment of capital. And he's not secretive about it, he applies his training in physics and phenomenal knowledge to make good bets and eventually identifies and acknowledges his mistakes.
Tesla doesn't have an advertising budget. Musk couldn't care less about it's shareprice but I think he will be a bit perturbed if identical technology emerges faster than he foresaw as was Apple when the Android ecosystem emerged.
As it stands with his chip and data it is game set and match for autonomous driving which is a software game and the leader takes all the data and a fully autonomous vehicle is worth significantly more than non-autonomous vehicle and if you are data scientist you probably want to work for the company with the best data-set and highest remuneration.
The data is the gold and Tesla owns it and no-one can steal it and use it for at least 10 years by which point battery vehicles will be cheaper than petrol vehicles which is the major problem with the model 3. It is currently uneconomic against a toyota corolla but gains ground with every piece of battery and energy storage research that musk does not pay for.
1) It isn't the best AI chip in the world. And Tesla doesn't have the most advanced self driving program around.
2) I can't remember a CEO who has complained more about the stock price in particular those shorting the stock. And worst of all then go on to illegally manipulate the market to target them.
3) You have that completely backwards. Musk is the worst at solving problems with the least capital. Look at the way his manufacturing processes work or the decision to build out the Supercharger network/Gigafactory. There are definitely cheaper ways to do those. Better probably not. Cheaper yes.
4) I have worked with more Data Scientists than most and I assure you that they are just like everyone else. They care most about: company reputation, work environment, money, challenging problems etc. It's not just whether there is a great dataset or not.
I doubt the chip matters nearly as much as the trained network running on it. It’s quite likely they could take the network and run it on other hardware.
And the trained network doesn’t matter as much as the training pipeline, which will include hardware and software external to the cars.
A neural net that you can’t update is less useful, and I highly doubt that the cars themselves are doing any learning.
Not really, because the problem is embarrassingly parallelizable, so “best” can always be obtained by stacking additional chips with greater total power draw.
Remember we’re talking about systems made of multiple chips. It’s like asking “what’s the best Bitcoin mining rig?” The question is one of hashrate per joule. If someone asked if you should buy a 1000watt box that did 10TH/s versus a 200watt box that did 5TH/s, which is better?
They maxed out their available power envelope (~70 watts) and the resulting performance is about 20x what they were getting from their prior nVidia platform. In other words, they will always make the chip big enough to pull ~70 watts, at the highest efficiency possible.
My limited understanding of the hardware design is that once you have figured out the specific architecture you can scale up and down the power consumption almost linearly with the die size. Obviously plus or minus various hard limits (e.g. oversizing compute for the available memory bandwidth)
Tesla has already been working on their next chip for over a year. This chip they just started shipping finished design 1.5 years ago. This will not be the last AP hardware they ever ship.
I fully expect that as we delve further into “FSD” there will be functionality on the fringes that will need even more horsepower.
It’s easy to think in the present that there’s a logical “end” where development will be “complete” but that’s almost never actually the case. So there will be a Gen4/5/6, specifically what features they will unlock is very hard for me to predict. I think this is actually the type of thing Elon sees right through like it’s obvious.
Like how he sees a path to colonizing Mars which includes launching a global satellite internet company.
1. Tesla for the forseeable future has the best self driving AI chip in the world for gathering the data requisite to solve the self driving problem at scale.
2. Musk has investors and the price of his cash financing goes up when people short his stock and there is negative sentiment. It was a major strategic weakness when the viability of tesla depended on short-term cashflow financing and he did what he had to save the company that he poured his life savings into. Not so much now that he's built a system where every additional vehicle sold adds additional value and long-term investors can see that. Musk thinks long-term the markets think short-term but if you run out of cash, there is no more planning and he hates the markets lack of vision and people profiting from negative sentiment effectively killing optimum solutions. The market has a lot of long-term faith in Amazon and Google and Microsoft because of their dominant networks and economies of scale and profit from complex software with zero marginal cost.
3. Solving problems in sub optimal ways isn't solving them it's compromising on them. He solves them optimally with the least capital but admits his mistakes, one of which was not judging the benefit of humans and teamwork on production lines versus robotic manufacturing technology correctly. If you are generating negative externalities you aren't reducing entropy in the system and Tesla learnt this painfully and won't forget it.
4. I'm completely out of my depth on the data scientists employer preference but if I had the choice of solving problems from a constantly growing ocean or from an artificial fishpond and I had a desire to contribute majorly to solving the autonomous driving problem and I had to factor in the probability of earning enough money to buy my time freedom as quickly as possible then the data is suggesting that Tesla at this point in time is a reasonable bet.
The question is whether he can compete with Toyota on mass scale while battery tech comes down in price but he's quite lucky Toyota misbet on fuel cells and don't readily admit their mistakes, it appears he's built a 10 year lead on the autonomous driving and can compete in the high end of the electric market profitably. The first question anyone would ask a driver of an electric BMW is why they didn't choose a Tesla? That's a fairly strong position, I wouldn't be shorting that stock.
The entrenched car lobby have only have two lines of defense left. The first which was to short him so he runs out of access to cash from negative sentiment is virtually broken on Tesla's current revenue and IP acceleration. The last line will be a delaying argument over Safety but he has a much larger dataset.
Geico falls when Tesla proves safe autonomy. There is a lot at stake here and Musk has focused primarily on the physics which is the right thing to focus on for humanity.
This is just ridiculous. Is there a better chip to process the exact image depth & resolution with the exact layers and co-efficent accuracy that Tesla uses? No.
Does that make it the most advanced AI chip in the world? No! In fact, frankly, you're trying to have a technical discussion about a bullshit term. Tesla isn't producing an AI chip, they're producing a scalar product chip. It does a 96x96 Mult-add and that's basically it.
How does it do on any of the standard AI benchmarks? Oh it can't run any of them because it's not got support for any of them because it lacks many of the basic features of what any normal person would consider a chip capable of doing AI work.
It is the best chip to run the convolutions and pooling of 1 neural net that Tesla thinks it will want to run. It's the best 'AI' chip in the same way that the chip Nokia produces for it's mobile backhaul is the best 'neworking' chip.
The point is that the chip they're trying to compare their custom ASIC to is capable of running several AI frameworks none of which the ASIC can. Hell it can't even run single precision floating point operations.
Tesla has the best chip in the world for the one neural network they want to run. I bet you good money their custom ASIC sucks at running Waymo's AI workload.
I apologise for using the term AI and sounding ridiculous. Sorry to you and everyone else who had to read that you are right.
"Tesla has the best chip in the world for the one neural network they want to run" is what I wanted to convey but don't actually have the technical background to do it.
"Frankly you're trying to have a technical discussion about a bullshit term"
You are right. I apologise for diluting the discussion and will go back to reading hacker news not creating it.
This is an oft-repeated trope, but one look at Tesla's reports will show it's not the case. Last year, approaching $100M (I want to say certainly greater than $80M) spent on "Advertising and marketing".
I've never invested in an individual stock but their full self driving tech strategy is making me highly consider going long on TSLA.
I think whoever develops level 4 FSD tech that works for most Americans daily car commute is going to be a trillion dollar company. It can even require me to be in the driver's seat, not work in rain/snow, and be geofenced if it gives me at least a 5+ seconds heads up for taking over as long as it is enough time to switch context from working/whatever to drive. Think about how much time Americans spend driving for which we could free ourselves from if our cars had FSD tech that worked most of the time. If/when I have a decent commute that benefits from a car over public transportation, I would pay thousands of dollars extra for a car if it was able to free myself from driving 75% of the time.
Tesla now has got hundreds of thousands of cars that people use in level 3 mode which is then used to train their L4/L5 FSD tech while also retaining all of that real world data to train their models. I don't work for self driving tech, but given the massive amount of real world data they can collect, I think they are now most likely to hit the point where they can solve basic commutes in geofenced areas with L4 over everyone else and I think people will pay out the nose for that (with the added benefit of people buying electric cars too).
This comment is deeply annoying as I happen to know the self driving field.
Tesla is the most hyped and least proved contender. They moved the conversation around the AI chip but that doesn't matter compared to the algorithms that runs on it! Waymo and Cruise are years in front but mask managed to hype you and make you drink koolaid in such a way that you know think they are the leaders.
I really hope someone else eats their lunch soon. There are some genuine improvements to the status quo in their cars, but the unbelievably poor quality control and silicon valley user hostility (near impossibility of DIY repairs & parts acquisition) should not be part of the future of cars.
This is to say nothing about their quixotic attitude towards self-driving in the face of competitors using better methods.
Who exactly would eat their lunch? They're doing a ton of things the traditional auto industry Sat on for years not thinking about. I don't really see anyone doing all the things tesla does while still using parts ubiquitous enough for individuals to do their own repairs.
I think that's a huge overstatement. "Funding secured", preselling full self driving that doesn't exist, taking reservations for a 35k car that doesn't exist, etc. etc. is a big step above what other manufacturers do.
I agree with the GP comment, I really want Tesla to succeed but they (or, rather, Musk) take hype and overselling to a new level.
The difference is that Elon Musk's hype has the stench of the monorail salesman in that episode of The Simpsons. A slick pitchman painting grandiose visions of the future ripped straight out of '50s science fiction comics. Seeing as how his Reddit following talk about him like Tony Stark, I feel like Musk knows exactly who he's courting.
The chasm between Musk's superhero image and his Twitter meltdowns and missed deadlines, is likely what makes people be skeptical/annoyed with his communication style.
I was a member of his cult of personality till the debacle in Thailand and his utter inability to handle criticism for his absurd proposed course of action. Couple that with his weird lashing out at employees and insane persecution of whistleblowers and I’m done.
Once you see it in that light he’s just another petty tyrant. I don’t imagine he’ll go very far with the current level of emotional maturity. It’s too bad because many of his initiatives are really beneficial.
I think there are real material differences between being overly optimistic about range estimates (something Tesla has also done iirc) and overly optimistic about the car driving itself. One leads to extra charging or missed meetings, the other to bodily injury and death.
I certainly don't mind Elon talking up how Tesla is fighting giants and doing Good Things. I like "little" companies taking on big ones. I don't like selling things people that may kill them or others.
I mean, it's called "auto pilot". It is not an auto pilot. It is not nearly ready for unattended driving. And yet, people use it as such and are surprised when they crash into a divider or something.
There's a built in assumption that because the tech has progressed from point A to point B that it'll easily move to point C in the same amount of time. That's not at all guaranteed, and for all of the millions (billions?) being poured into self driving tech we don't have to show for it. It may be many, many years before we do.
Have you seen the progress in new features and reliability in just the last 6 months of OTA updates? Their cars are becoming more and more autonomous, and they are rolling out this autonomy in ways that is very impressive.
The fact that they can say a new lane change algorithm went live and they know they are now doing 100,000 lane changes a day without a single incident.
The fact that they can see when I take over during a lane change and that sequence is stored and anonymously included in future training sets.
I have been experiencing the massive pace of progress over the last 6 months of OTA updates, and I almost believe Musk when he says he can get to FSD in a few years.
IMO you may have cars get “stuck” in very strange situations which will be extremely annoying, but I think they will be significantly safer than humans, hugely convenient the vast majority of the time, and save a lot of lives in the process.
I also wish Tesla the best of luck, but Musk isn't saying he can get to FSD "in a few years" - he said by the end of this year. This is the hype being railed against. I'm confident that they can solve the FSD problem, but I'm not convinced they can do it faster than of Elon time.
It really depends on your interpretation of the following clip [1]. He says "feature complete" by later this year, but then says "feature complete... to the degree that the person in the car does not need to pay attention" and classifies that as maybe second quarter of next year. Later still is sufficiently complete to convince regulators, with an estimate of later next year.
And I think it's uncharitable to interpret these as delivery commitments. From the tone of the delivery, they are clearly targets (probably aggressive targets) and not commitments. Those who bludgeon Musk for being overly optimistic with timelines seem to overemphasize the importance of specific timeliness and lose sight of the bigger picture.
Their demonstrations of FSD like the short clip in the clip linked shows far too much easy roads like highways and "controlled" scenario to believe in their confidence of the tech.
If they put up autonomous driving videos going through a handful of major cities taking the most awkward routes through places where driving culture is typically more agressive and the narrowest of country lanes through the towns that were built for horse and cart and space is at a premium. Places like Rome, Barcelona, New Delhi. Towns that have built one way systems into their traffic management due to limited space and measures are taken to purposely bottleneck traffic like narrow road right of way signage. Show a car doing that and I'd understand their confidence.
E.g there is a town where roadside parking is allowed because it purposely bottlenecks and slows down main road traffic. You have to judge and wait by the parked cars for a space you can pass through even when their maybe cars coming towards you there is time to pass the parked cars and into space where two cars can pass eachother. How is an autonomous car going to handle that kind of senario where it has to make a judgement call that factors in a far greater amount of risk element?
I take it they aren't autonomous driving videos? My concern isn't really with what the car sees but how it reacts to unfamiliar scenarios. There are many edge case scenarios that us humans can't react to because there just isn't a logically correct maneuver. How do you tell a machine what to do when there is no correct answer? When none of the choices don't end up in catastrophe.
Elon Musk had a very negative view of lidar, but he didn't really explain himself very completely.
Lidar sensors are around $10k and up, and the waymo cars I've seen have many of them.
Additionally, they only sort of say how far away things are, which sort of overlaps with the ultrasonics and radar.
So, maybe the roi on lidar would not be great.
That said, the engineer in me thinks lidar would be a nice add-on (sensor fusion). But it depends on someone actually
shipping one of those dirt cheap solid state sensors we see in press releases (but not in real life yet).
I disagree that you need a machine to understand ethics for FSD to come to fruition. Most humans would not be making ethical decisions in split second emergency situations.
If humans are driving around somewhat successfully without being able to handle all edgecases, as long as the a machine can do as good a job or better it is a viable alternative to human drivers.
The important distinction though is that a human can be held liable and punished for their erroneous (re)action but a machine cannot.
Do you hold the owner, manufacturer, or insurer responsible to right the wrongs where an autonomous vehicle is at fault?
I would expect the insurers and manufacturers to use contractual terms that absolves them of all liabilities where the car's occupant isn't paying attention to the road.
Thank you for the video link jumping to that timestamp! To paraphrase Elon, he is saying he sees three broad goalposts;
1) internally feature complete - end of this year,
2) internally they believe reliable enough that the software can let the user not actively check in / driver does not need to look out the window - mid next year
3) able to convince regulators in some jurisdictions that drivers do not have to look out the window - end of next year.
Here's where people go wrong. Now I didn't watch the entire video, but my understanding is Elon is not saying that the car will never need a user to take over. He is not saying the car will drive anywhere, at any time, under any conditions.
He is saying that the software will be reliable enough to fully drive the car in all of the basic driving environments (highway, rural, urban, etc.). It detects stop signs, traffic lights, it navigates intersections, it makes unprotected left turns, it can merge, etc.
That's what I think Elon is trying to convey when he says "feature complete". There will be neural networks, algorithms, logical decision trees, whatever, to handle all of these common driving scenarios. He wants all those scenarios coded and demoable in some condition by the end of this year.
This is not something they roll out in a day. This is gradual feature deployment over the next year leading up until "feature complete" which is a point where some drivers are getting door-to-door in some cases under supervision with wheel check-ins but without any disengagement for the whole ride.
After that point it is 6-12 months of training, training, training the networks based on Fleet learning, billions of miles tracking every single disengagement, and aggregating all that user feedback into the algorithms.
They will know when the system needs to disengage. They will know every way that it fails. They will be tracking this data and providing it to regulators for evaulation. And Elon thinks around the end of next year, they could be in a position to make a case for removing the wheel checkins and telling users that this car can drive itself, and keep you safe, and that if it hits a threshold where it can't do that, it will fail gracefully.
So perhaps there will still be the intersections where the car gets stuck. If there is a road closure and the cop wants you to drive on the wrong side of the road, maybe the computer will refuse to do it and just sit there and you'll have to take over. But if you're cruising down the highway and an 18-wheeler pulls out in front of you, yeah, the car has to be able to see that and stop.
I fully understand the frustration with people thinking Tesla's driver assist is more than what it is. But what I don't understand is the issue people have with the product name.
Almost all commercial airlines have an autopilot, but not one of them flies without an actual pilot and co-pilot in the cockpit. The only thing an airplane autopilot does is keep the bearing and altitude constant -- Tesla's "autopilot" actually does a bit more than that. Is the outrage over calling it "autopilot" based on the public's misunderstanding of how an airplane's autopilot works?
A roll of duct-tape fixing the steering wheel and the accelerator pedal would be the rough equivalent of an auto pilot for cars if you want to take that analogy as far as it will go. So clearly 'auto pilot' was marketing speak rather than a literal description of what the device is supposed to do leaving a lot of room for interpretation. This has already led to a number of fatalities and may lead to a bunch more of them, and all that because naming it 'driver assist' would lose a couple of sales, but would accurately describe what's in the tin.
Airplane pilots are being trained for specific aircraft models, which certainly includes how the "autopilot" functions, when to use it and what it does and doesn't do. There is not risk that the overloaded term will be misunderstood in that context.
To get a Tesla all that is required is enough money to buy it.
My issue with the name is that it's a bad comparison at best, and misleading at worst.
Yes, a plane autopilot only maintains bearing and altitude, but that's also all a plane needs to do. An equivalent system in a car would be utterly useless, so if you're taking Tesla's terms literally then they're telling you they've made something that's of no use to you.
If, instead, you think of an autopilot as being something that allows the pilot to take their attention off the controls to do something else then, well, Tesla's autopilot explicitly doesn't do that. So it's not the right name when taken either literally or figuratively, so little wonder people get confused.
Quite the opposite, there are common scenarios when the plane needs to deviate from pre-programmed course or otherwise can't rely just on an autopilot. All of them are handled either by higher-level automation (eg. ILS for landing), or by pilots themselves. Unsurprisingly the hand-over is signaled similarly to what Tesla does - audible and tactile cues for the pilots. A pilot can also initiate take over at any time by the way of flight control inputs. Lastly, regardless whichever automation is active, the pilot in charge is held both morally and legally responsible for the airplane and passengers or cargo, and expected to turn off the the automation when proper.
All in all Tesla's "Autopilot" already does more than an autopilot does. And while I'm somewhat pessimistic on how quickly it can become better than humans both statistically and also in rare scenarios, there is constant progress by all major vendors.
Common scenarios for an autopilot to be disconnected, or to initiate handover:
- collisions avoidance; the air corridors are busy places, and maneuvering to maintain safe distance from other planes is expected
- take-off and landing, though those can be performed by higher level automation
- pattern holding around the air-port, where course change is frequent
- re-routing to avoid severe weather or handle emergencies
- handling major turbulences (autopilots have limited maximum rate of change for safety reasons)
- loss of instrumentation, due to icing, foreign object ingestion, malfunctions; a common setup is "2 out of 3 sensors need to be in agreement"
As you can see, the equivalents of some of those scenarios are already handled pretty well by self-driving cars, like self-parking, or collision avoidance.
>The only thing an airplane autopilot does is keep the bearing and altitude constant
If autopilot means that then we had autopilot in years, I remember students creating toy projects that were following the road.
The issue is that some(no idea of a number) people, including Tesla owners, think the car drives itself and do not pay 100% attention. I am not sure why they do not understand that there is a chance they will get killed or kill somebody and the driver has full responsibility.
You are exactly right and every sane human being has always known this. I have no idea what hole all these troll commenters are climbing out of that they dont understand basic english.
I think it's pretty hilarious that as late as last year, Tesla's Autopilot page (https://www.tesla.com/autopilot) used to have the tagline "Full Self-Driving Hardware on All Cars" (especially at the time the median crash/death happened), but now they've changed it to "Future of Driving" and "[...] full self-driving capabilities in the future—through software updates designed to improve functionality over time." I really want Tesla to succeed and break the ICE monopoly, but when they oversell mission-critical features like that, I'm perfectly content seeing shit blow up in their face.
Musk is a brash and reckless CEO, no one should be surprised hordes of people are hedging for his downfall.
Just quietly you do know that "auto pilot" comes from aeroplanes, eg Airbus and Boeing passenger jets and is not ready for unattended flight without pilots present in the cockpit, right?
I'm pretty sceptical about having nobody in the front seat of the car while it drives me myself. Time will tell. I can be sanguine about it as I have nothing directly riding on it (as it were) either way.
Safe self driving cars without some kind of outside coordination with either the road or other vehicles is an impossibility. It's impossible to do this safely on a mass scale without the road infrastructure made for it.
Exactly, see how things got when in the Boeing one sensor sent a wrong input and the software was designed with a flaw, now imagine the super complex input of video cameras, that feed into a magic ANN when something goes wrong or when the input is something weird that the ANN was not trained for.
I am fine for Tesla to train the code with the fleet but the problem is with the marketing and drivers that put live in danger by thinking the problem is already solved.
I think the general tone about Tesla on HN is a bit strange. On the one hand, Musk is certainly guilty of creating "hype" around Tesla. He has a showman's aesthetic, and deploys it to great effect generating interest in his products. His timelines are always ambitious (or insane), and I never take them at face value. He boasts about capabilities that are presently out of reach and sound impossible.
On the other hand, what other company has yet brought such compelling EVs to market? Would Porsche have invested in the Taycan as soon/at all if not for Tesla? I think the years ahead will be filled with fantastic EVs, but Tesla should be given credit for showing what was possible. It's not like they've stop innovating, either. They just upped the range on the Model S to 370 miles.
A lot of the hand wringing on HN these days has to do with Tesla's self driving efforts and Musk's controversial statements about timeline and technology. I think it remains to be seen if he is correct that (1) Lidar is not required and (2) if his timeline is even remotely reasonable. On the other hand, which other car company is shipping a product as capable as the current 'navigate-on-autopilot' feature? Google is doing pretty limited testing in Arizona, Uber is doing so in Pittsburgh. GM has their cruise division. But none of these offerings are in customer hands. I really doubt there will be L4 self driving in a Tesla by the end of this year, but sometime next year? I don't think that is out of the question.
I don't like the narrative that they are responsible for what other companies are doing. My grandpa had an electric car back in the 90s. A toyota, I think, so it's not small no-name companies. People have been working on this since before tesla, and are still working on it outside tesla. But the time is right for the technology to take off now, so it is. Attributing that to tesla seems like a misguided belief in "great man theory" where it's usually just that the environment was finally right for an idea. If tesla hadn't, someone else would.
I get frustrated by instances of great man theory in general, though. It's not unique to tesla.
It’s unfortunate that the crowd sourced mobs can be unleashed the way they are being unleashed. Internet appears to be commoditizing takedowns and toxicity.
While Tesla deserves criticism, instead they are currently being bombarded with hate and FUD. It’s hard to tell who these people are and what are their motives.
FWIW - I recently bought a Model 3. And one thing you realize living with it is that it’s like living in the future. Some people don’t like the interior. That’s fine. I personally love the lack of all the buttons. FSD is another controversial topic. But it’s worth noting that people are getting real value out of Auto Pilot and NOA TODAY. It’s a very iterative delivery approach, which I find is quite practical vs the Big Bang delivery of 100% working FSD.
Lastly, you can tell that Tesla is no fraud simply by looking at Model 3 hardware and software. Yes there are some rough edges, but those are minor. You can tell it’s being executed by extremely capable people and at extreme speed.
I dont have any shares, but if I had the money I would purchase a boat load of them.
1) He has a fleet of cars which is giving him a lot of data and edge cases. Of which is growing with every new car purchased and on the road.
2) He has a team developing the software, refining it with each new release and it's just getting better and better with more data.
3) He has a team developing the hardware, on the investor day he said that another chip will come out in 2 years and be 3x more capable. Going from memory on that one, so feel free to correct. But this point still stands. They aren't standing still. I do believe that vision trumps lidar and they'll get to level 5 automation with much more precision than waymo and get there a hell of a lot faster than uber.
4) It seems with every car that rolls off the assembly line, they are consistently making modifications and improving the battery tech and drive train. Again, they have the data to keep on improving their cars.
5) With the maxwell purchase I'm sure they'll start to develop their own batteries and get even better performance due to optimising the whole car.
So, Tesla owns the:
1) Data
2) Self Driving Software
3) Self Driving Hardware
4) Drive Train
5) Battery Tech
6) Power Grid Network
Also don't forget that the grid and charging stations keep improving over time. Imagine if we get to 5 minute charging, faster than the current paradigm? Game changer.
Can anyone suggest another vendor getting close to this? Once Telsa put out the robo-taxis it really is game set and match. They own the whole stack, end to end.
He even mentioned that the price could go down. Can you imagine a $25k robo-taxi and does 1k miles? The other car makers should be very afraid of this prospect.
This is assuming that level 5 automation is possible any time soon, while a growing number of people believe it isn't. If it turns out that we need another 2-3 decades to get there, Tesla will run out of money long before then.
The tech is nice and all but there is only so much market penetration to be done in the luxury car segment. I would put the Model 3 in the luxury segment as well since you can get a base BMW 3 series for almost the same money ($40k).
People that can afford luxury cars and aren't "in tune" with tech are likely looking at other brands too like Lexus, Mercedes, BMW, etc. If you think about it further, some of those brands have a following because they are fun cars to drive. Drive being the keyword there, BMW comes to mind. If those people don't care about autonomous driving and really like the brand they have, what would get them to switch?
In my opinion, they need to punch much lower than $35k for a lowest option. Ditch the auto-driving, sensors, etc. and come out with a base $25K four door sedan, nicely appointed but not luxury, that has the range of a model 3 (220 miles).
I took a quick glance at Consumer Reports car reviews for giggles. I would just dismiss them straight from that since I don't want higher chances of maintenance costs long term.
The issues they have are with the market, not the tech.
And if there are talking points about forgetting the cost of gas and oil changes, etc. when comparing costs ... how many consumers keep detailed track of those expenses to know what the monthly cost is over 5 years of payments to understand if a Tesla is actually cheaper?
1) Data is collected by others too (Waymo, Uber, etc...)
2) See above, software is simply being purchased by OEMs, the increasing importance of software will be shifting power so
3) Hardware, again Tesla is not the only one
4) Actually easier than ICEs as it is less complex, also in the automotive sector mass production and cost are king, Bosch for example is good at automotive and electric motors, the just need to mate theses two
5) Actually, that is Panasonic
6) Only the chargers, power grids are totally different story, and chargers are being built by others as well. Tesla has a head start so
One final point, I know of a company in Munich that is testing inductive loading with BMW i3s. If I remember well they achieve 80% loading in 15-20 minutes or so.
Robotaxis are a commodity, well the cars at least. For companies running these services based on large fleets the costs and availability are king. That means procurement cost but even more important operating costs and maintenance. The supplier of these fleets needs to offer fleet services, short maintenance periods and quick reaction times. Not sure if Tesla is up to it already.
Also, where are you taking your numbers from? $25k and 1k miles? Really?
There's always a ton of sentiment analysis to be done on "crowds" i.e. on twitter towards companies. If they worked well we'd see 10x numbers from the funds that figured out the methods, but we don't. The crowd means little beyond technical analysis.
Tesla is the most shorted company in the world, of course people are going to try to use whatever they can as evidence to prove it sucks; They have a vested interest in doing so, and Tesla rightly fights back against these kinds of claims, because it's in their shareholders interests.
This article provides some examples of people talking about speculative evidence that Tesla isn't doing well, but you can find that for almost any company. That's what a lot of investment articles are, actually. So it seems like mostly fluff to me.
It seems like they are a few moves away from checkmate on the car market. Electric SUV, with better self driving than the competition could do really well.
1. Share price has nothing to do with bankruptcy. Bankruptcy happens when a company can't meet its obligations and debts. If a company is profitable, then by definition, it met its obligations and debts so it cannot go into bankruptcy. You go to bankruptcy protection to ward off creditors. If you are profitable, you paid off your creditors and made money on top of that so there is nothing to protect you from.
2. Shorting involves borrowing shares. There are a finite number of shares that you can borrow. So you could have an infinite supply of money but your broker only allows X amount of shares available to short.
Shorting doesn't cause bankruptcy. It's a method of profiting when companies veer towards bankruptcy of their own accord.
Think of it as surfing. The surfer doesn't cause the wave, he just rides the wave.
Depending on how their debt is structured if it's linked to stock price then it's possible to force a liquidity event on outstanding debt through depleting the share price.
I think the recent $960MM debt payment was actually linked to not hitting specific share price hurdles.
Given the massive amount of debt they have outstanding versus capital on hand you could technically do that. However shares have to be available for shorting in order to achieve that.
There are some recent instances of companies being forced into a liquidity event by hedge funds exploiting bonds in unforeseen ways. So, way more complicated than shorting stocks, but kind of related to the parent question:
Matt Levine has written a couple of excellent ruminations on the mechanics, social value or lack thereof, and ethics of this.
> In Windstream, a hedge fund (Aurelius Capital Management LP) discovered that a company (Windstream Holdings Inc.) had already violated the terms of its bonds, so it bought those bonds and sued for a declaration that they were in default. Nobody agreed on the default, or manufactured it, or cut any backroom deals. Last week Aurelius won in court, and yesterday Windstream filed for bankruptcy.
The last time I looked, I thought setting up a margin account made shares available for borrowing, but I've never received interest from borrowed shares. The interest goes to the broker?
You could maybe short it into a takeover. If enough stocks are available (or volume is low enough that the price effect of the short is sufficient), the company could become cheap enough to be bought by a competitor. But I'm not sure if that would work in practice, as shorts would likely close positions as soon as rumors about the takeover come out.
I suppose that's possible for an already distressed company under financial strain desperate to sell itself to avoid bankruptcy. But I'm not sure how that would work on a profitable company. No board of directors would approve selling itself for an short-driven discount. A takeover of a profitable company involves a premium, not a discount. A profitable company can wait out a short position. Hell insiders of a profitable company would be buying shares in droves in anticipation of crushing shorts.
The shorts are why the stock got to where it is in the first place. It was around $40 when there was a huge short squeeze, and that popped the price of the stock to like $180.
A short squeeze is a temporary phenomenon. Short sellers expect the company to do worse than it does, they turn out to be wrong and then many try to buy the stock and close their positions at once before the stock goes even higher (and so that they can stop paying interest), which requires them to buy the stock for a premium from people who aren't particularly inclined to sell it just then.
That only lasts as long as the lack of liquidity, which can be a little while but the events you're referring to were six years ago.
I was originally very pro Tesla, until about 18 months ago when a friend who works in finance gave me the heads up on TSLAQ,
Here's a few datapoints on what's convincing me that this is not a healthy company:
• Musk is constantly promising things that don't happen (full self driving, robotaxis, Model Y, Tesla Semi truck, Tesla Roadster, car with a rocket motor, 10k/wk production). This week it's an electric leafblower. Seems like everytime there's bad news, there's a distraction ready to go.
• The entire cult of Musk working 100 hours a week yet he shitposts more than I do.
• Funding secured, followed by funding not secured is a bit of a joke, but also, if the CEO of General Electric, or Chevron tried that, they'd be fired.
• The reports of people waiting months and months to get simple repairs done. If Vinod Khosla (1) can't have his car repaired quickly, where does that leave the average joe on the street?
• Enormous price decreases. The price of a Model S decreased $12k a few weeks ago, and the Model X decreased by $18k. This is horrific for your margins, especially if you're short on cash.
• Batteries exploding (2), and people dying in car accidents that they should have walked away in - the example here is someone who couldn't get out because the door handles didn't work (3).
• Enormous Health & Safety violations at the Freemont factory (4). Before we even get into the nonsense that was the factory operation (compare to say the efficiencies and tight tolerances of the Nissan operations in the UK).
• Simple errors meaning the Tesla factory is enormously inefficient by North American standards (the consensus being that Tesla made the same mistakes other American firms made in the 1980s)
• Panasonic freezing investment in Nevada and China (6)
But finally, the biggest thing that makes me skeptical is that none of what I've said matters. Because this isn't about facts, it's about faith. And I think Tesla is a fraud and that Elon Musk could give Elizabeth Homes a run for her money, which is a real shame because the Model S is a nice enough car, and electric cars are clearly something we'll have in the future. You can fudge the numbers a bit if you're a VC backed startup. You can't do that if you run a publicly traded company.
Totally agree, especially on production and servicing. All German manufacturers, I personally would never buy a car from by the way, are relying a lot on the corporate leasing business. In that market customers don't wait months to get a car repaired. Even more so if the customer is not just leasing them for employees but operating a business with these cars, e.g. Taxis.
Tesla produces vehicles in batches based on order statistics.
Vehicles are then matched with customers based on their selected options. Vehicles may be awaiting matching, or vehicles may be awaiting transport. International transport across the ocean happens when they can fill an entire ship to capacity.
If you think of the perspective of these people wanting to short Tesla they probably have no experience of how much inventory you need to sell stuff. Stuff being anything.
Think of a typical bicycle shop and how many hundreds of bicycles they have given the actual store footfall. They will also have a warehouse or stockroom with a similar or larger quantity of stock. Plus a lot of sales will be special order from the supplier. None of that inventory will be a year old and the product is far simpler than a car. Yet there is a mountain of it. Sure bicycles come in 3-4 sizes and that adds to the inventory requirements but colours, trim levels and options certainly add to the inventory requirements Tesla has.
You could look at your typical bicycle store and decide to 'short' them somehow. If you had no idea of the practicalities of how sales works you could assume the warehouse was full of the broken ones or the ones returned from customers. You could also look around the showroom and find that quite a few were dusty and not setup correctly. There would be no confirmed buyer for any of them.
You could go back a week later and still see pretty much the same. Yet if you didn't work there you would not realise a huge amount had made it to customers. This is the problem of the information these Tesla short people are working with, they don't understand how the business really works and they jump to conclusions.
I recently had this realization experience with large TVs at Bestbuy. I went to purchase a 65" tv after Christmas hoping to score a great deal. I tried haggling with a few 'important looking' staffers, and they basically said 'ok let me know which one you want, and we will grab it for you.' No give on price. I asked if they had a certain tv in stock, and the young man walked to the back of house area, and I peaked inside. Huge shelves totally full of TVs. I had the 'Tesla Short' thought process of, oh wow, they have a ton of TVs to unload. Moreover, I thought I should be able to strike a deep discount.
When the rep returned, I asked if they were backed up with TVs, to which he replied, "no, this is pretty typical, we will move most of those in a week." I gave up my haggle (after an hour of grilling the sales guys on difference and tv trends and crap). they didnt budge. While I was waiting in line to pay and get someone to load my tv into my car, I watched TV after TV roll out the front door.
A huge stockpile of vehicle inventory could mean a major sales collapse. It could also mean $45mm ready to flow into the Tesla bank account in the next week. The stockpile information by itself doesn't tell you much beyond that there are loads of cars sitting at the dock.
EDIT: I mean, just look at the staggering number of vehicles at Hyundai's Georgia Plant (MOBIS). They even have cars parked in the grass! Tesla's Fremont plant doesn't really have finished product storage at this scale.
I think you could test this hypothesis by comparing Tesla’s inventory dollar amount per average units sold to other car manufacturers. You would need to adjust for the higher price of Tesla models. Maybe dividing total inventory dollars by average model price then dividing that by average units sold would get us there.
I can throw my additional anecdote into the mix: I live in the boston area and have noticed a ton more Tesla cars on the street. I remember previously thinking it was cool Tesla car every now and then, but now I see multiple a day.
I wonder how many people the established auto industry pays to write negative Tesla opinions. I can't help but think my kids will look on this like I do Tuckers' efforts.
