Speaker 1: All zone media. Wake up, everybody, I've got a new podcast.
Speaker 1: This is Better Offline and I'm your host ed ze Tron.
Speaker 1: Last week, the National Highway Traffic Safety Administration released a
Speaker 1: damning report about Tesla's autopilot and its full self driving systems,
Speaker 1: which the nhtdsay referred to as not adequately ensuring that
Speaker 1: drivers maintain their attention on the driving task. One second, though,
Speaker 1: to delineate between the systems, autopilot is more like a
Speaker 1: sixty version of cruise control keipping your car and lanes,
Speaker 1: changing lanes when you hit a thing, hitting the indicator,
Speaker 1: and following the car in front of you on the
Speaker 1: highway very basic. Full self driving is when your car
Speaker 1: drives itself. It makes turns, you tell it where to
Speaker 1: go on the GPS, and it goes through intersections, follows lights,
Speaker 1: and a bunch of other things it appears to not
Speaker 1: really be capable of doing, with the NHTSA saying that
Speaker 1: both autopilot and full self driving created a trend of
Speaker 1: avoidable crashes involving hazards that would have been visible to
Speaker 1: an attentive driver. The report, which covers the period between
Speaker 1: January twenty eighteen and August twenty twenty three, described a
Speaker 1: critical safety gap to quote CNBC's Laura Colodney in the
Speaker 1: autopilot's system, which contributed to at least four hundred and
Speaker 1: sixty seven collisions resulting in at least thirteen fatalities and
Speaker 1: forty nine injuries. Musk has recently tried to convince investors
Speaker 1: that Tesla is now all in on AI and his
Speaker 1: flimsy dreams of having a robotaxi company. This somehow also
Speaker 1: resulted in Musk firing the majority of the team behind
Speaker 1: the one Tesla product Everybody Likes It's supercharger network, leaving
Speaker 1: the status of the North American charging standard created with
Speaker 1: Tesla's help in jeopardy. To explain what the hell is
Speaker 1: going on with Tesla, I brought in Ed Niedermeyer, who
Speaker 1: has been writing and commenting on the auto industry and
Speaker 1: mobility text since two an a. He's the author of Ludicrous,
Speaker 1: The Unvarnished Story of Tesla Motors, and the co host
Speaker 1: of the Autono cost He lives in Portland, Oregon. I'm
Speaker 1: really happy to talk to him, okay, Ed, So please
Speaker 1: tell me what has been happening in the world of
Speaker 1: elon Musk. In the last two weeks, I want to.
Speaker 2: Say, there's a lot, a lot of a lot has
Speaker 2: been happening, and I think, you know, a lot of
Speaker 2: it has really deep roots. Like a lot of the
Speaker 2: things that are happening are are so dramatic right now,
Speaker 2: but they've been sort of been building towards us for
Speaker 2: a really long time. I would say, like at a
Speaker 2: high level, what appears to be happening is essentially, you know,
Speaker 2: Tesla as a as a stock, as a perception, as
Speaker 2: a set of stories and dreams that that Elon Musk
Speaker 2: has been weaving for for many years now has essentially
Speaker 2: overtaken Tesla as as a as a company, as a
Speaker 2: real thing. And I think, you know, from the very
Speaker 2: beginning of sort of stumbling onto this company, the defining
Speaker 2: characteristic of Tesla is this gap between perception and reality.
Speaker 2: And you know, I've written a lot about the problems
Speaker 2: that Tesla has as a company, and yet you know,
Speaker 2: for five years, much longer really five years since my
Speaker 2: book came out, you know, Elon Musk has been able
Speaker 2: to sort of use perception to kind of make a
Speaker 2: lot of those issues not matter through raising money or
Speaker 2: you know, sort of creating diversions and all kinds of
Speaker 2: other things. And I think what's happening now is that,
Speaker 2: you know, the the problems with the car business are
Speaker 2: so fundamental the and and there's nothing in place to
Speaker 2: sort of solve them. And in the car business, you know,
Speaker 2: things take time. Problems take time to solve, especially problems
Speaker 2: like we don't have good new product that can compete
Speaker 2: in the market. And so you know, we've sort of
Speaker 2: reached this point now where it seems like Elon is
Speaker 2: not even really trying to save the reality of this
Speaker 2: business and is sort of all in on perception. And
Speaker 2: that's sort of taking a bunch of different forms.
Speaker 1: So in practice, though, what does it mean that it's
Speaker 1: escaped reality?
Speaker 2: So you know, Tesla's a very nearly a two million
Speaker 2: unit a year car business, and having built that up
Speaker 2: from nothing is like incredible, Like it's a historic achievement
Speaker 2: in the world of cars. The problem is is that
Speaker 2: that seems to have peaked, right, So they did about
Speaker 2: one point eight five million last year, and essentially sales
Speaker 2: are going down and they are slashing prices and slashing
Speaker 2: margins as fast as they can to keep that decline
Speaker 2: from getting any worse. But really what happened is that
Speaker 2: is that during COVID they were able to print through
Speaker 2: a number of sort of unique set of circumstances, they
Speaker 2: were able to sort of print really impressive profits that
Speaker 2: made this business seem very very real, and it was
Speaker 2: very very real. The problem is has created this complacency.
Speaker 2: In order to record those profits, they've basically been starving
Speaker 2: research and development and new product investment in new product.
Speaker 2: And so now now that sales are declining, you know,
Speaker 2: they can cut the prices to kind of slow that decline,
Speaker 2: but the only thing that's going to actually turn it
Speaker 2: around is new is actual new product, and those investments
Speaker 2: haven't been made. And and he had the opportunity on
Speaker 2: the call to say, you know, we understand the problem.
Speaker 2: We're taking it seriously. And he sort of vaguely mentioned
Speaker 2: like new product is coming, but he did not sort
Speaker 2: of describe it in in the kind of credible way
Speaker 2: that that is, you know, sort of makes it clear
Speaker 2: that that there is actually a plant to solve that problem.
Speaker 1: And that was the latest invest the cult just to
Speaker 1: be specifics yeah.
Speaker 2: And and so instead of that, right, he's he's gone
Speaker 2: all in on this idea that Tesla's an AI company,
Speaker 2: that it's a you know that's self driving this. They're
Speaker 2: going to show a robotaxi, you know, and and and
Speaker 2: that's that's pumping the stock, right, that's doing the thing
Speaker 2: that that traditionally happens. The problem is is that those
Speaker 2: things don't make any money, Like, they don't even make revenue,
Speaker 2: let alone profit, right.
Speaker 1: And uh, the AI site lose the money.
Speaker 2: Yeah, yeah, and and again you know what's what's really
Speaker 2: puzzling and troubling about what's going on right now is is,
Speaker 2: you know, Tesla has on paper something like thirty billion
Speaker 2: dollars in cash a little bit less, right, which is
Speaker 2: enough to really solve like a lot of these problems.
Speaker 2: And if and if he gone on on that call
Speaker 2: and said, you know, we're gonna we're gonna take ten
Speaker 2: billion dollars and we're gonna use it to to really
Speaker 2: like invest in a whole new generation of products and
Speaker 2: give them some detail about what that was, you know,
Speaker 2: I think things would be we would be having a
Speaker 2: very different conversation right now. And instead they're spending what
Speaker 2: are they spending money on? They've been spending on since
Speaker 2: the pandemic, you know, the cyber truck, you know, and
Speaker 2: and now sort of lots of GPUs. They they're in
Speaker 2: like this race to buy more of an Nvidia's production
Speaker 2: than you know, these other big and by the way,
Speaker 2: very very profitable tech companies.
Speaker 1: Can I just ask a quick question though? You say
Speaker 1: these GPUs so like the ones used to train models
Speaker 1: and run models like Cope and Ai. All these the
Speaker 1: same GPUs that Mosk bought for Xai his AI company
Speaker 1: attached to Twitter, or these a completely different set.
Speaker 2: Presumably they're completely different. You know, Tesla is a publicly
Speaker 2: traded a publicly traded company and X's is private. So
Speaker 2: you know that said he does also very much, you know,
Speaker 2: blur these these boundaries within his sort of empire, and frankly,
Speaker 2: you know, in ways that are not always strictly legal.
Speaker 2: So there may be it may be that Tesla is
Speaker 2: using some of Xai's hardware and vice versa. It's hard
Speaker 2: to know for sure.
Speaker 1: So walk me through this NHTSA report what happened there?
Speaker 1: Because it looks bad?
Speaker 2: Yeah, so some history is kind of important here, right, So,
Speaker 2: so first of all, you know, the Tesla has admitted
Speaker 2: that crashes have involved autopilot including fatal one since twenty sixteen.
Speaker 2: The very first time, right, and people don't always know
Speaker 2: it was a guy in China whose family had the
Speaker 2: brilliant idea of, you know what if we like maintain
Speaker 2: chain of custody on the vehicle data. And that was
Speaker 2: the first time that Tesla admitted, oh yeah, out of
Speaker 2: pilot was actually involved. And so this may have been
Speaker 2: going on for even longer than anyone realizes. NTSB, which is,
Speaker 2: you know, this investigative body. They don't have any regulatory power,
Speaker 2: but they're really good investigators. They mostly look at air crashes.
Speaker 2: They were really early and looking at three fatal crashes
Speaker 2: that happened between twenty sixteen and twenty eighteen. And they
Speaker 2: concluded essentially that Tesla's system looks sort of self driving enough,
Speaker 2: but it operates in areas you're allowed to use it
Speaker 2: in places where it doesn't it's not designed for, and
Speaker 2: people become complacent and they stop paying attention. It's not
Speaker 2: good enough to trust your life to. It's just good
Speaker 2: enough to kind of make you complacent and not paying
Speaker 2: attention when when it runs into something it can't handle.
Speaker 1: And these are the findings of the old report.
Speaker 2: This is the NTSB. Yes, there's a different body, and
Speaker 2: they recommend it to NITSA, who has maybe less good
Speaker 2: at investigating stuff like this, especially with human factors, but
Speaker 2: has all the regulatory power. And they said, look, this
Speaker 2: is a problem, you know, And knits A had an
Speaker 2: enforcement guidance at the time that said, you know, if
Speaker 2: the a system like autopilot, you know, is prone to
Speaker 2: foreseeable misuse, you know, that can be a defect and
Speaker 2: we can recall it. And yet somehow that was never
Speaker 2: used from twenty sixteen, and it wasn't until twenty twenty
Speaker 2: one that NITSA finally said. You know, they did two
Speaker 2: things essentially the summer of twenty twenty one, they opened
Speaker 2: an engineering analysis of autopilots, sort of the first step
Speaker 2: towards identifying a defect and ordering a recall. They also,
Speaker 2: at the same time, and the connection here was not
Speaker 2: always obvious, they started collecting data from across the industry
Speaker 2: and so now when you have crashes that involve any
Speaker 2: of the other sort of level two driver assistant systems
Speaker 2: out there, you have to report that to the government.
Speaker 2: So they've been simultaneously since the summer of twenty one
Speaker 2: investigating Tesla specifically, but then also collecting data from the
Speaker 2: rest of the industry to kind of get a sense
Speaker 2: of of, you know, is this a unique problem to Tesla,
Speaker 2: And pretty clearly the answer to that was yes, because
Speaker 2: what we've learned is that in December of twenty twenty three,
Speaker 2: you know, they they basically took you know, the these
Speaker 2: findings that showed, you know, a good deal of of
Speaker 2: crashes happening, including fatal ones, and basically forced Tesla to
Speaker 2: do a recall. They did that in December over two
Speaker 2: million vehicles, and they did it with an over the
Speaker 2: air software update. And for me, you know, having watched
Speaker 2: nits a sort of drag its heels frankly or at
Speaker 2: least move very very slowly to address what I think
Speaker 2: is a it's been a pretty understandable problem and and
Speaker 2: a recall worthy problem for for a long time now.
Speaker 2: I kind of thought, you know, okay, they're going to
Speaker 2: take let Tesla do a software update, pretend like something
Speaker 2: has happened, and sort of move on. The thing is
Speaker 2: is that we were still seeing crashes happen. In fact,
Speaker 2: there was a fatal crash literally the day before. Uh,
Speaker 2: you know this this most recent earnings call. And so
Speaker 2: now what what Nitsa's is doing is they're actually looking
Speaker 2: into the remedy to that recall. They're saying, you know, well,
Speaker 2: we're we because these things keep happening, we may we
Speaker 2: think that maybe just updating the software wasn't enough to
Speaker 2: actually fix this problem. That to me is it's a
Speaker 2: very rare for NITSA to do one of these it's
Speaker 2: called like a recall query. Uh, it's very rare for
Speaker 2: them to do that. That strongly suggests that that that
Speaker 2: they're really actually going to hold Tessel.
Speaker 1: To account on recall query something that happened before this
Speaker 1: new report, or is that what this current report is.
Speaker 2: So this so what's really interesting is is that this
Speaker 2: report is essentially the results of nitsa's investigation over since
Speaker 2: since twenty twenty one essentially, And and they go through
Speaker 2: and they describe sort of, you know, how they found
Speaker 2: out about all these different kinds of crashes and how
Speaker 2: they sort of analyze them and basically about half of
Speaker 2: them they were able to kind of throw them out
Speaker 2: right away, and then from the other half they're able
Speaker 2: to drill down and identify, you know, a number of
Speaker 2: kinds of crashes that to keep happening that are all
Speaker 2: indicative of this problem that you know NTSB identified, you
Speaker 2: know way back in twenty eighteen, twenty nineteen, twenty twenty
Speaker 2: and and so so what was interesting is is that
Speaker 2: data is they had taken that to Tesla and basically,
Speaker 2: reading between the lines, strong arm them into the recall.
Speaker 2: And that's often how recalls happen is that either either
Speaker 2: the automaker does it voluntarily or the or the investigator
Speaker 2: or the regulator brings a body of evidence to them
Speaker 2: and says, listen, like you either do this or we're
Speaker 2: gonna or we're gonna do it for you.
Speaker 1: So, so this nh TSA report, is it does it
Speaker 1: do anything? Or is it just is this something Tesla
Speaker 1: received before it came out? Like how was this delivered
Speaker 1: and what happens as a result of it.
Speaker 2: So, so usually this stuff usually what happens is that
Speaker 2: right they build up this this body of evidence, they
Speaker 2: take it to the automaker, they essentially use it to
Speaker 2: force them into a recall, and then once the recall happens,
Speaker 2: usually you never see it. It doesn't become public. So
Speaker 2: the fact that this is public is huge.
Speaker 1: Yeah, that was what confused me. This feels like a
Speaker 1: strange document for everyone to see.
Speaker 2: Yeah, and it is absolutely I mean, look, everything about
Speaker 2: this is kind of novel territory. NITSA has not really
Speaker 2: gotten into this sort of automated driving driving assistant stuff before,
Speaker 2: so there's no playbook here. But within the context of
Speaker 2: automotive regulation, it is rare and and and what it
Speaker 2: implies is that they forced this recall. Tesla did the
Speaker 2: easiest thing possible, which is, we'll just update the software
Speaker 2: over the air.
Speaker 1: And NITSA, what did that update do if you if
Speaker 1: you've used it?
Speaker 2: So so it appears have been a couple of them.
Speaker 2: And and I think and that's one of the things
Speaker 2: Nissa's looking into is exactly what what did you do?
Speaker 2: But but fundamentally, the only thing that they really could
Speaker 2: do was to essentially create a lot more nags in
Speaker 2: the system. And nature when you know, you have the
Speaker 2: hands off the wheel or whatever, and and the system
Speaker 2: is like, you know, take control, take control, take control.
Speaker 2: What people love, what consumers love about autopilot is that
Speaker 2: it doesn't do that very much, right. It kind of
Speaker 2: lets you sort of sit back, which is which is
Speaker 2: the problem. Right, people like the unsafety.
Speaker 1: The feature and the problem it seems exactly yeah.
Speaker 2: And so and so you know, and and by the way,
Speaker 2: Tesla has has gotten around that sort of by making
Speaker 2: a very very misleading safety claims, statistical safety claims about autopilot.
Speaker 2: So people they're getting their cake and they're eating it too, right,
Speaker 2: They're they're the system is designed really to look self driving,
Speaker 2: so that kind of helps the stock price. It's it's
Speaker 2: designed to enable you to kind of look away and
Speaker 2: do other things that you shouldn't be doing while you're driving,
Speaker 2: but it comes with this statistic that is comforting where
Speaker 2: it's like, no, this is actually safer than a human too. So,
Speaker 2: so Tesla is kind of that. This is why it's
Speaker 2: so popular. It's the lack of safety with the veneer
Speaker 2: of a of a fake you know, safety statistic is
Speaker 2: what's made it so popular. And frankly, this is why
Speaker 2: I've been skeptical that and it's a wood really do anything.
Speaker 2: But the fact that they forced the recall. Tesla took
Speaker 2: the easy route. NITSA could have just said, yeah, okay,
Speaker 2: we we've gone through the motions here, let's let's move.
Speaker 2: We've done yeah, let's move on right, But instead, because
Speaker 2: these crashes are still happening, you know, NITSA feels the
Speaker 2: need to to not just say, you know, we need
Speaker 2: to look at at what you did to address this
Speaker 2: recall and make sure that it's actually solving the problem. Implicitly,
Speaker 2: we we don't think it is. But then it also
Speaker 2: released this this data that that to the public now,
Speaker 2: so now now all of us can go and look
Speaker 2: and say, okay, yeah, like there's a reason that this
Speaker 2: recall happened. This isn't just you know, you know, dark Brandon,
Speaker 2: you know, cracking down on Elon because because you know,
Speaker 2: you can't handle his realness or whatever. Yeah, yeah, like
Speaker 2: this is not just some politically motivated thing like like
Speaker 2: and this is the flip side of NITSA taking their
Speaker 2: time on this. As frustrating as it's been, They've built
Speaker 2: up a lot of data not just about Tesla but
Speaker 2: about the rest of the industry that shows Tesla does
Speaker 2: have a unique problem here. And I think you know
Speaker 2: what they're going to show is that is that the
Speaker 2: update they've done so far isn't going to be enough,
Speaker 2: and that really leaves Tesla in a pickle because there's
Speaker 2: not a lot of other great options for fixing these problems.
Speaker 1: And it seems also that this report basically gives plaintiffs
Speaker 1: the ability to sue Tesla on some level, it seems
Speaker 1: like this will create a bunch of litigation oh against
Speaker 1: the company.
Speaker 2: Yeah, and there already has been you know Tesla just
Speaker 2: right also right before this most recent call, they settled
Speaker 2: a lawsuit dating back to a crash, back to a
Speaker 2: twenty eighteen that you know that that lossuit have been
Speaker 2: going on for a really long time. And I'm sure
Speaker 2: what nis Is done has has played a role in that.
Speaker 2: Absolutely all this data, everything that KNITSA has put out
Speaker 2: in the public is just it's just like handing sort
Speaker 2: of loaded ammunition clips to to all the lawyers out there.
Speaker 2: And frankly, that's kind of how regulation in this country works.
Speaker 2: You know, Uh, our regulators will do what they have
Speaker 2: to when they have to, when when it becomes unfeasible
Speaker 2: for them to sort of ignore stuff. But generally speaking,
Speaker 2: a lot of regulation effectively happens through uh, you know, lawsuits,
Speaker 2: through civil civil legal litigation.
Speaker 1: So do you think that this leads to them actually
Speaker 1: having to do something with the autopilot or are they
Speaker 1: just gonna hope that that don't get sued too much.
Speaker 1: It feels like they may. This feels like a normal
Speaker 1: company would just pull Auto Pilot entirely.
Speaker 2: Yeah, So, so I think that's it's gonna it's gonna
Speaker 2: come to something like that. So because this over there
Speaker 2: update didn't so, so so they did over their update
Speaker 2: that that kind of keeps people being nagged more, right,
Speaker 2: and and A it's anest stopping the crashes from happening,
Speaker 2: but B it's really eroding what people like about the product.
Speaker 2: And and essentially again like it gets back to Tesla,
Speaker 2: you know, is willing to create products that lawyers at
Speaker 2: other companies would just put the kabash on. They wouldn't
Speaker 2: let it happen. So so Tesla kind of assuming that
Speaker 2: nits a you know, is going to find that that
Speaker 2: the current fix is insufficient. There are sort of two
Speaker 2: basic routes that that Tesla can take. One is they
Speaker 2: can dramatically reduce sort of the it's called the control
Speaker 2: authority and the and the capabilities of the system. Essentially,
Speaker 2: the the you know, a system, a driver assistant system
Speaker 2: should be designed to assist the driver and the fundamental
Speaker 2: flaw of of autopilot is that it actually is more
Speaker 2: designed to look like it the car is almost self driving,
Speaker 2: and those are two different things. So instead of the
Speaker 2: automations assisting you.
Speaker 1: Yeah, how would they different actually really get into that?
Speaker 2: Yeah, so okay. So the feature that has the best
Speaker 2: proven record of improving safety outcomes is called automated emergency braking,
Speaker 2: And essentially people don't even know it's on the car.
Speaker 2: But if you get yourself into a really sticky situation,
Speaker 2: someone cuts you off something like that, the car will
Speaker 2: there's forward collision warning. The car will warn you, and
Speaker 2: then the car will actually break itself that combination of
Speaker 2: those two things, and again people don't even really know
Speaker 2: they're there for the most part. You know, something like
Speaker 2: a forty percent reduction in frontal crashes. Okay, so like
Speaker 2: proven statistical safety advantage, and it's because the critical piece
Speaker 2: of it is that you can you don't rely on it.
Speaker 2: No one sits there and says, oh, it's cool if
Speaker 2: I just accelerate into you know, this semi truck.
Speaker 1: Or whatever, I'm just going to crash into various objects
Speaker 1: and see what happens.
Speaker 2: Yeah, you don't get this over reliance. But when with
Speaker 2: these level two systems, and it's a combination of how
Speaker 2: the system is designed, right, it's designed to look as
Speaker 2: if it's self driving, convince people itself driving, and then
Speaker 2: puts the driver in what's called a you know, a
Speaker 2: vigilance task, which which means, you know, and people are
Speaker 2: constantly talking about what bad drivers humans are. The reality
Speaker 2: is we're actually considering we're not evolved to move at
Speaker 2: these speeds and everything. We're actually pretty darn good at it.
Speaker 2: We just drive a lot of miles and over those miles,
Speaker 2: bad things happen. The the what we're worse at than
Speaker 2: driving are these vigilance tasks. And we know this from
Speaker 2: research going back one hundred years. And like you know,
Speaker 2: radar operators in World War Two. You know, you sit
Speaker 2: there and you force someone to watch a screen and
Speaker 2: then when you know, one little, you know thing happens,
Speaker 2: you know, you have to respond within a very very
Speaker 2: short amount of time. This is called a vigilance task.
Speaker 2: We're terrible at that. And if you think about, you
Speaker 2: know what that can mean. You know, things happen fast
Speaker 2: on the freeway if you're even slightly not paying attention,
Speaker 2: and all of a sudden there's a situation. You have
Speaker 2: to be able to read what's going on, decide on
Speaker 2: the right course of action, and then implement it properly.
Speaker 2: I mean, this is insanely hard for people to do
Speaker 2: and and and it creates, you know, these kinds of
Speaker 2: thing fafety problems. So so you know, I think fundamentally
Speaker 2: this is this is the challenge that tessels up against, right,
Speaker 2: is that is that they're selling this as a safety thing,
Speaker 2: but there's no safety record. You know, IAHS has all
Speaker 2: of the insurance data and they say there's no record,
Speaker 2: there's no evidence that that any level two system, which
Speaker 2: is what what these are called, has any measurable impact
Speaker 2: on safety.
Speaker 1: And is level four completely autonomous?
Speaker 2: Yeah, Level four is completely autonomous within a restricted area.
Speaker 1: Two.
Speaker 2: Level two is essentially uh automated assistance of of of
Speaker 2: two axis of control. It's it's kind of confused, but
Speaker 2: essentially it's it's adaptive cruise control. A lot of cars
Speaker 2: have adaptive cruise control, and that's where you you have
Speaker 2: cruise control. It holds the speed and then if there's
Speaker 2: an obstacle in front of it and matches speed with that.
Speaker 2: So that's the longitudinal control. And then and then you
Speaker 2: have lane keeping, which essentially keeps you within a lane.
Speaker 2: And and then you know, they build on that a
Speaker 2: little bit by by having you know, a nowtigation. You know,
Speaker 2: so if you're going to take an exit, it'll start
Speaker 2: getting you over into the next lane instead of just
Speaker 2: holding you in one lane. But essentially, you know, these
Speaker 2: level two systems exist in other brands. Tesla's is the
Speaker 2: most popular because they've implemented it in a way that
Speaker 2: makes it seem more self driving than others. And again,
Speaker 2: right that that element is what makes it unsafe. And
Speaker 2: so it sounds hyperbolic, but there's really a very direct
Speaker 2: through line between you know, design decisions that endanger people
Speaker 2: and you know, the stock, because that's what it's for, right,
Speaker 2: It's not to keep people safe, it's to convince people
Speaker 2: that Tesla's a leader in self driving car technology, which
Speaker 2: they actually aren't.
Speaker 1: Seems not kind of a sham, like he's just trying
Speaker 1: to make it seem autonomous when it's not even good
Speaker 1: at autonomy. Because the people who buy stocks don't seem
Speaker 1: to pay attention.
Speaker 2: Yeah, So I mean it's it's a fascinating situation where yeah,
Speaker 2: like the word right, So then there's the Really it's
Speaker 2: a way of building up this this frankly scam of
Speaker 2: self driving, right, because that's they're getting people to pay
Speaker 2: ten fifteen thousand dollars a car for this full self
Speaker 2: driving you know add on. And people wouldn't do that
Speaker 2: unless they had some reason to think that that, you know,
Speaker 2: this is something that is somewhat near and essentially, again,
Speaker 2: like they have to endanger people to create that perception.
Speaker 2: So a scam is just sort of ripping people off.
Speaker 2: This does more than that. This endangers people in order
Speaker 2: to rip them off. It's almost like we need a
Speaker 2: new word for for how bad this is. You know.
Speaker 1: Yeah, it's interesting because any other company, someone would be
Speaker 1: in prison, someone would be arrested, maybe someone would be
Speaker 1: sued by the government for like billions of dollars. This
Speaker 1: feels like it will continue to kill people unless something changes.
Speaker 1: But it also doesn't sound like Elon Musk will actually
Speaker 1: change anything.
Speaker 2: Well yeah, I mean he's going all in on self driving, right,
Speaker 2: I mean.
Speaker 1: He doesn't seem to be. When he's going all in
Speaker 1: on it, it doesn't seem to be doing anything to might
Speaker 1: get better.
Speaker 2: Well yeah, and that's because fundamentally, the you know, Tesla's
Speaker 2: approach to the technology. They had to find a way
Speaker 2: to make self driving technology work with their existing business model,
Speaker 2: and they did that by using very cheap hardware. Essentially,
Speaker 2: so if you look at way Wayme's really the only
Speaker 2: company that is really actually doing self driving. They have
Speaker 2: robotaxis in San Francisco, and like you may love them
Speaker 2: or hate them, but like it is incredibly impressive to
Speaker 2: be in a completely drivers vehicle in somewhere like downtown
Speaker 2: San Francisco. They're doing it, and they do it through
Speaker 2: two things, like fundamentally, one is that they limit the
Speaker 2: domated operates in so it only operates in San Francisco.
Speaker 2: And then they're you know, they're expanding to new markets.
Speaker 2: But it's not a general solution. You create a model
Speaker 2: that works in a specific area, and then the and
Speaker 2: the other thing you have to do. It's sort of
Speaker 2: like turning it into a board game, right, Like like
Speaker 2: you beat a human, you have to bound the complexity.
Speaker 2: Like in the bounded complexity of go or chess, an
Speaker 2: AI can beat us. The other thing that AI needs to
Speaker 2: beat us at a game is perfect intelligence, I'm sorry,
Speaker 2: perfect information rather which means right in chess or go
Speaker 2: or whatever. You know, everyone knows exactly where each piece is.
Speaker 2: There's no confusion about it. And WEIMO does that with
Speaker 2: these really really robust sensor systems incorporate ldar and radar and.
Speaker 1: Also and where it goes.
Speaker 2: Yeah, so it's the combination of those two things. And
Speaker 2: and the problem is that those two things are incompatible
Speaker 2: with cars. No one is going to spend you know,
Speaker 2: maybe someone would spend three hundred thousand dollars on a
Speaker 2: on a car that they didn't have to drive, but
Speaker 2: but not if it only works in San Francisco. Right
Speaker 2: that live cars have to be able to go wherever
Speaker 2: we want them to go, and they have to have
Speaker 2: a market. You know, they can't be too expensive. And
Speaker 2: so the things that you need to make real self
Speaker 2: driving work just aren't compatible with self driving. And and
Speaker 2: so essentially what they've done is is just use you know,
Speaker 2: cheap hardware that that isn't too expensive and that does
Speaker 2: just enough to make people think that it's self driving.
Speaker 2: And I think you know, one of the things we've
Speaker 2: learned is is, you know, people we bring forward our
Speaker 2: ideas about driving from humans. If you see a human,
Speaker 2: like if you see a kid driving and like doing
Speaker 2: a driver's test, right, Like if you if you can
Speaker 2: do a driver's test, that means for a human that
Speaker 2: you have the basic skills that you can sort of
Speaker 2: generally apply them everywhere. But the problem is that machine
Speaker 2: learning doesn't work that way. Right with machine learning, you
Speaker 2: there's nothing the generalizability of AI is you know, it's
Speaker 2: a huge topic, right, everyone wants to believe in it,
Speaker 2: but certainly when it comes to something that is safety critical,
Speaker 2: where you know, it's it's one thing for a large
Speaker 2: language model to screw up and hallucinate and everyone laughs
Speaker 2: and you know, haha, that's funny when it comes to driving, right,
Speaker 2: what you're doing is you're reconciling a probabilistic system with
Speaker 2: the need for ninety nine point nine nine nine nine
Speaker 2: percent reliability.
Speaker 1: And that point one zero zero zero one percent is
Speaker 1: where people die, yes.
Speaker 2: Because because we drive millions and millions and millions of miles, right.
Speaker 1: And Americans drive too much as well, so that's dangerous
Speaker 1: to our roads are worse and so yeah.
Speaker 2: So what's amazing is is that is that you know
Speaker 2: humans are bad at babysitting. You know, that's essentially what
Speaker 2: it would have forced you to do right, you're babysitting
Speaker 2: like a teenager. Essentially, who's driving. You put a teenager
Speaker 2: behind the wheel, you babysit them. We're not necessarily good
Speaker 2: at that, But from Tesla's perspective, it doesn't matter, because
Speaker 2: what's important is that we get the liability. Right they
Speaker 2: so and like a vehicle.
Speaker 1: Except this report is going to potentially change how that
Speaker 1: is viewed by judges.
Speaker 2: Well, yes, so, so you know Tesla is not so
Speaker 2: so a vehicle becomes self driving when the when the
Speaker 2: manufacturer or the owner operator takes legal liability for it,
Speaker 2: right and and and so essentially, none of what Tesla's
Speaker 2: doing is is is self driving, because it's stakes humans
Speaker 2: with the consequences. And Madeline and Claire at least had
Speaker 2: a great paper a number of years back called moral
Speaker 2: crumple zones. And that's essentially what Tesla's doing is easy
Speaker 2: humans as moral crumple zones. And and and that's you know,
Speaker 2: the way they've architected the system. It's it doesn't give
Speaker 2: us a good chance of catching the system's mistakes. But
Speaker 2: again it doesn't matter because we're just there as the
Speaker 2: crumple zone. We're just there to take the blame for
Speaker 2: the system's mistake from from Tesla's perspective.
Speaker 1: Taking a step back, what does Tesla actually do now?
Speaker 1: What will will they change? Will they just keep sitting there?
Speaker 1: And Ela mus say, it's actually epic that the cause
Speaker 1: kills people. It's good we need we need more babies,
Speaker 1: but we need less adults. Yes, Like what is it?
Speaker 2: So? So, what's happening right now? Right? So sales have
Speaker 2: peaked and they're cutting into their prices in their margins
Speaker 2: in order to keep it, you know, sort of from
Speaker 2: from falling even further. Uh. The problem is is that
Speaker 2: what's left of those margins depend very heavily and and
Speaker 2: just the so the volume, demand and the and the
Speaker 2: profit margins depend very heavily on autopilot and full self
Speaker 2: driving because these are like unique to Tesla, and they're
Speaker 2: unique reasons to buy a Tesla. And and frankly, you know,
Speaker 2: with with full self driving, that's ten fifteen thousand dollars
Speaker 2: per car in an industry where like you know, people
Speaker 2: have massive fights at the at the development level over
Speaker 2: pennies per car. To add ten thousand dollars in pure
Speaker 2: profit on a car, this paper's over a multitude of
Speaker 2: sins financially, you know. And and so if the prospects
Speaker 2: here is that not only are Tesla sales falling, will
Speaker 2: continue to fall, you know, without because there's nothing, there's
Speaker 2: no new product to turn that around. But then also
Speaker 2: you take away this incredible uh, you know, advantage in
Speaker 2: terms of profit margin, right this ten to fifteen thousand,
Speaker 2: even at the take rate is ten percent ten thousand
Speaker 2: and fifty thousand dollars per car. Is you spread that
Speaker 2: over your whole fleet, and and it's it's by auto industry,
Speaker 2: and it is a huge profit.
Speaker 1: But will they have to pull autopilot out.
Speaker 2: If they do? And I again my sense is that
Speaker 2: this is where N's is going. If they pull autopilot,
Speaker 2: you know, all of those same problems also apply to
Speaker 2: full self driving. All of a sudden, Tesla sees another
Speaker 2: reason for their volume to go down. Right, there's people
Speaker 2: who are now not going to buy the car because
Speaker 2: they know it's it's autopilot, isn't safe, and it doesn't
Speaker 2: have those things. But then it turns into a negative margins.
Speaker 2: And the thing is their margins have been compressing, compressing, compressing,
Speaker 2: and they're at the point now.
Speaker 1: It turns into negative margins. Though the auto the car
Speaker 1: business might be the car business. So is there a
Speaker 1: delineation between full self driving and autopilot or are they
Speaker 1: the same thing?
Speaker 2: They're fundamentally the same thing. It's just the autopilot you're
Speaker 2: only supposed to use it sort of on freeways, and
Speaker 2: full self driving you use it sort of on city
Speaker 2: streets and everywhere else. So it's the differences in what's
Speaker 2: called operational design domain. But also the difference is autopilot
Speaker 2: is like the price is built into the cost of
Speaker 2: a Tesla, whereas full self driving is an optional extra
Speaker 2: on top of that.
Speaker 1: So what would get pulled out then?
Speaker 2: I mean, in theory both of them, because they both
Speaker 2: have the same sort of fundamental problem, right, and.
Speaker 1: And Elon actually do this? Though would he actually do
Speaker 1: it is my question because he's he's a dickhead, as
Speaker 1: we well know. But also this is the one thing
Speaker 1: he spent the last month or so, just like autopilot
Speaker 1: is the best part of the business. We don't even
Speaker 1: need the car, like he seems to be selling this
Speaker 1: hard Yeah.
Speaker 2: Yeah, no, So so the Nitsa does you know they
Speaker 2: move so slowly, they're so tentative. They're so uh, you know,
Speaker 2: hesitant to confront an Elon Musk type character, which is
Speaker 2: why this is all taken so long. But they have
Speaker 2: an immense amount of power essentially they can do. They
Speaker 2: can order a mandatory recall, and then they can even
Speaker 2: order a mandatory stop sale. They can say it's illegal
Speaker 2: to sell Tesla's in this country until you essentially deactivate
Speaker 2: the system or or or implement some kind of fix
Speaker 2: that we deem is appropriate.
Speaker 1: So that's probably impossible to fail.
Speaker 2: Though, so so fixing right, So, so there's two ways
Speaker 2: to fix. One is that you dramatically reduce the capability
Speaker 2: of the system and probably increase the nags even further
Speaker 2: and so basically destroy the value that people want. That's
Speaker 2: one way, and that's probably the most likely way. The
Speaker 2: other way is to actually implement like better hardware for
Speaker 2: driver monitoring, because Tesla.
Speaker 1: Uses which would cost tests or a great deal of money.
Speaker 2: And it's really hard, if not impossible, to essentially pull
Speaker 2: your entire fleet in and like actually install hardware that
Speaker 2: you know, you don't have the wiring harnesses for it,
Speaker 2: you don't it In theory, it could be done, but
Speaker 2: I think it's basically economically impossible, and so then you
Speaker 2: have this prospect of all of a sudden, Tesla can
Speaker 2: no longer do autopilot and full self driving, and given
Speaker 2: what's happening with their margins now, Tesla then becomes a
Speaker 2: negative margin business, which means you don't make it up
Speaker 2: on volume. Right, every car you sell you lose money
Speaker 2: on and and one of the ways that I'm you know,
Speaker 2: and I'm I'm sort of along with everyone else, trying
Speaker 2: to puzzle through sort of some of the decisions that
Speaker 2: are being made here. But one one scenario that kind
Speaker 2: of potentially makes this all make sense is that Elon
Speaker 2: kind of gets it that this is going to happen,
Speaker 2: that that NITSA is not screwing around. They don't want
Speaker 2: more deaths on their hands. They're going to they're going
Speaker 2: to force the issue on this, and that that that
Speaker 2: the margins will go negative and there's no new product
Speaker 2: to turn it around. Maybe, you know, Elon really like
Speaker 2: it could explain some of his behavior if he's just
Speaker 2: sort of come to terms with with, you know, the
Speaker 2: core business is going to die and sort of like
Speaker 2: with Twitter, right, you know, he thinks in the way
Speaker 2: his mind works he thinks he can sort of go
Speaker 2: and tell Earth, like, oh, the regulators or the adverage.
Speaker 2: Right in the case of Twitter, he's like, he's like,
Speaker 2: I'm just gonna tell you know, Earth that the advertisers
Speaker 2: killed Twitter. I don't remember that that interview.
Speaker 1: Yeah, so oh oh, I've got it engraved in my brain.
Speaker 2: He he may pull that like. That's that's one of
Speaker 2: the you know, we have to like sort of put
Speaker 2: ourselves in the mind of of someone who's obviously not
Speaker 2: very normal.
Speaker 1: Yeah, I'll say it's my podcast, I don't care.
Speaker 2: Yeah, so so I mean that that may be one
Speaker 2: way to explain all of what's going on, because.
Speaker 1: Otherwise I would just go out and say that the
Speaker 1: wokes of stop Torto pilot, but he would actually pull it.
Speaker 1: You think, well, I mean I.
Speaker 2: Think you would have no choice but to put like
Speaker 2: like I think he's I think right, because because if
Speaker 2: it gets pulled, if he if you can't have autopilot
Speaker 2: and full self driving, it hits the right, it hits
Speaker 2: the volume of sales, it has, the hits the profit
Speaker 2: margin on each sale, and it hits the stock.
Speaker 1: It hits and it kills the Robotaxi idea which was
Speaker 1: already completely stupid. It just kills that you can't have
Speaker 1: that anymore.
Speaker 2: Yeah, yeah, no, and and and even that is a
Speaker 2: weird thing to pivot to as well, because.
Speaker 1: It's just a stupid It's just to be clear, every
Speaker 1: single journalist who wrote about the robotaxi thing without rolling
Speaker 1: their eyes and writing that they were doing so committed
Speaker 1: some level of malpractice. In my opinion, it's just not
Speaker 1: going to happen. It's complete bullshit.
Speaker 2: Yeah, yeah, yeah, I completely agree. I mean, look the
Speaker 2: idea that you know you can do sort of level
Speaker 2: five self driving, which means fully you know, automated, no
Speaker 2: human monitoring or anything, and not in a limited domain,
Speaker 2: but everywhere, Like, no one else is even selling this.
Speaker 2: Tesla's been selling it since twenty sixteen. No one else
Speaker 2: is even selling it. If it were possible, wouldn't one
Speaker 2: company want to compete on it? Right?
Speaker 1: Yes, economics logic, surely this seems very like if you're
Speaker 1: saying that cars are generally thin margin businesses and you
Speaker 1: suddenly have a way to sell software on it, surely
Speaker 1: someone else would try. Someone like Forward, for example, who
Speaker 1: has tons of cash, government subsidies, tons of brand power.
Speaker 1: They would also do this, except if it was too dangerous.
Speaker 2: Yeah, exactly. And so what you do see from Ford
Speaker 2: in general motors and others is that they do they
Speaker 2: have level two systems like autopilot that are for the freeway,
Speaker 2: but they have much more robust driver monitoring and things
Speaker 2: like that. And they're not going around saying, you know,
Speaker 2: you'll be able to you can buy a car that
Speaker 2: will some day drive itself completely by its own, uh,
Speaker 2: anywhere you want to go. Everybody in the business knows
Speaker 2: that that is not serious and has known for a
Speaker 2: really long time. And unfortunately we're in a weird situation
Speaker 2: where it's like no one has called it out, and
Speaker 2: so you know, he's again. It'll be eight years this
Speaker 2: fall that they've started since they've started taking money for
Speaker 2: for this just blatant scam. And and I think the
Speaker 2: reason that people have got that they've gotten away with
Speaker 2: it so far. Obviously it's nothing to do with with
Speaker 2: technical plausibility, although it does sort of tie into, you know,
Speaker 2: the AI hype that we see elsewhere, so people think
Speaker 2: that AGI is near. You know, it kind of makes
Speaker 2: sense why they might think that it might.
Speaker 1: Be because the shadows on the walls of the cave
Speaker 1: that suggests it's possible.
Speaker 2: Yes, But but the real reason, I think is that
Speaker 2: you know, when you say the word self driving car,
Speaker 2: what people would Americans in particular, think is a car
Speaker 2: that drives itself and what is it?
Speaker 1: I mean, that's probably because those the gold damn words.
Speaker 1: But that's the thing. No, No, it's misleading in its face.
Speaker 2: Yeah, yeah, exactly. But but what people don't understand is
Speaker 2: that where autonomous driving actually does work is in these
Speaker 2: robotaxis that are fundamentally different than cars. Right, a car
Speaker 2: you have to be able to buy it and own it,
Speaker 2: and a car also goes anywhere you want to go,
Speaker 2: right and so and so where this technology works, the
Speaker 2: way in which it works is fundamentally different than a car.
Speaker 2: So that's why no one else is trying to make
Speaker 2: a self driving car, right, It's because it's impossible. But
Speaker 2: but Elon's willing to do it. And he gets away
Speaker 2: with it because it's like he's selling a piece, a
Speaker 2: puzzle piece that fits into the empty spot in people's brain.
Speaker 2: He's the only person who's selling the mental model that
Speaker 2: people have for self driving car. And this is why
Speaker 2: with like Wimo is actually doing it. They have actual
Speaker 2: driverless vehicles, you can get actual rides in and and
Speaker 2: no one stops and is like, wait a second, how
Speaker 2: is how is it that they're able to do this?
Speaker 2: You know? But every year Elon says this is ready
Speaker 2: and then and then it's not, like what's the.
Speaker 1: Disconnecting IM saying it would be ready since like twenty
Speaker 1: nineteen as well, he has been talking at his US
Speaker 1: whole about this a minute.
Speaker 2: Yeah he has, he's I mean, even before the official
Speaker 2: announcement of full self driving, he had a number of
Speaker 2: quotes saying he thought it was going to be you know,
Speaker 2: within a year or two. And there's just these long,
Speaker 2: long lists of his quotes. No one has been as
Speaker 2: wrong about this technology as he has. And yet he
Speaker 2: continues to get more confidence and faith, you know, certainly
Speaker 2: from financial markets then even the companies that are like
Speaker 2: proving it and doing it the right way. And I
Speaker 2: think that's a really like troubling commentary on sort of
Speaker 2: the relationship between technology and capital and in our society
Speaker 2: these days.
Speaker 1: So changing subjects slightly, Elon also very recently laid off
Speaker 1: most of the Supercharger team, which to me is one
Speaker 1: of the funnier things he's done because the supercharger network
Speaker 1: for Tesla appeared to be a completely unregulated monopoly where
Speaker 1: everyone gave him free money, and the entire industry had
Speaker 1: started to like, most of the industry had started buying
Speaker 1: into his charging standard. And then they'd said, you know what, Elon,
Speaker 1: we'd actually like you to have more power. Please just
Speaker 1: run this whole thing, and then he fired most of them.
Speaker 1: What the hell happened?
Speaker 2: Yeah, So, at a high level, the weirdest thing about
Speaker 2: all of this is that you know, Tesla has money,
Speaker 2: Like Tesla on paper at least there's almost thirty billion
Speaker 2: dollars in cash, and so it should be spending its
Speaker 2: way out of its problems and not cut it. But
Speaker 2: instead Elon And this is why I think this is
Speaker 2: as much just sort of about him and sort of
Speaker 2: who he is now rather than anything to do with
Speaker 2: the business. Is that he he likes He just cuts
Speaker 2: stuff that's his. It's like, oh, you know, we're having trouble, Like,
Speaker 2: let's get rid of the dead way, let's get rid
Speaker 2: of cost. The problem is is that is that this
Speaker 2: doesn't solve any of his problems. I think with supercharging,
Speaker 2: it's a little different. So so supercharging, like Tesla itself is,
Speaker 2: was a really critical piece of this sort of going
Speaker 2: zero to one with the EV business. Like I think
Speaker 2: you know, when Tesla at first got started, they had
Speaker 2: to do something like the supercharger network, right, it was
Speaker 2: there was it wasn't really optional, like if it was
Speaker 2: key part of growing their market.
Speaker 1: Yeah, because none could judge the cause otherwise.
Speaker 2: Yes, And as long as it was Tesla exclusive, it
Speaker 2: was an increasingly over time as competition got got better,
Speaker 2: it became sort of the reason to buy Tesla's When
Speaker 2: he opened it to others, that changed, right then all
Speaker 2: of a sudden, it's no longer you know, well, if
Speaker 2: you want access to Tesla superchargers, you have to buy
Speaker 2: a Tesla.
Speaker 1: No.
Speaker 2: No, you can buy a Rivian, you can buy a
Speaker 2: Ford and you get access to those things. It's no
Speaker 2: longer a unique selling point for Tesla, and I think
Speaker 2: that's one of the reasons you've seen demand fall off. Right.
Speaker 2: There's a lot more competition now, and a lot of
Speaker 2: that competition can use the same chargers. I think, you know,
Speaker 2: because it's been so good and so reliable, people assume
Speaker 2: that it's also a good business I'm not sure that
Speaker 2: that's actually the case. Real estate is very expensive. It
Speaker 2: ties up a lot of capital. Yes, they're making probably
Speaker 2: some gross margin on the electricity. They probably sell the
Speaker 2: electricity for more than they buy it for. So there
Speaker 2: is some kind of a business there. But whether or
Speaker 2: not that's paying off the cost of capital in a
Speaker 2: way that would actually be attractive as a standalone business
Speaker 2: is not clear, And I think there's reasons to suspect
Speaker 2: it may not because it is essentially a it's like
Speaker 2: a feature for Tesla cars. It's like sort of putting
Speaker 2: cash on the hood or something like that. Potentially, so
Speaker 2: the business of supertruging has never really been fully disclosed,
Speaker 2: and you know, essentially it seems like maybe this may
Speaker 2: actually be one of the more rational decisions. And in that,
Speaker 2: you know, the business itself may just not be that good,
Speaker 2: you know, Tesla. By opening it up, they'll they'll get
Speaker 2: revenue from other, you know, owners of non Tesla vehicles,
Speaker 2: and in order to make that business look good, they
Speaker 2: simply can't invest more. There's no incentive in them to grow.
Speaker 1: There have been estimates that suggest it's worth like ten
Speaker 1: to twenty billion dollars, like it's actually generating real revenue,
Speaker 1: but we just don't know, do we.
Speaker 2: Yeah, Like a lot of things with Tesla, the accounting
Speaker 2: is very opaque, right, and again, like you know, they
Speaker 2: supposedly have thirty billion dollars in cash or almost thirty
Speaker 2: billion dollars of cash on their books, and yet they
Speaker 2: somehow don't seem able to like meaningfully spend their way
Speaker 2: out of some of these problems. So I you know,
Speaker 2: I'm not a friendsic account and I'm not going to
Speaker 2: make any allegations about them like cooking their books, but
Speaker 2: I do know there's been a lot of suspicion about
Speaker 2: that over the years, and certainly when it comes to Superchargers,
Speaker 2: it's never been broken out in a way that would
Speaker 2: allow you to say, oh, yeah, this is definitely something
Speaker 2: that can stand alone. Frankly, if it were like like
Speaker 2: if he, if it were a standalone business, it would
Speaker 2: be something you could spin out right now or sell
Speaker 2: to a competitor or something.
Speaker 1: Surely it would be something you would volunteer the information
Speaker 1: for as well to show how good Tesla was.
Speaker 2: But you also wouldn't fire the entire team before doing it.
Speaker 1: You also would not do that. No, but talking of
Speaker 1: broken how about that cyber truck? What the hell is
Speaker 1: going on there? Yeah?
Speaker 2: So so again, you know, it's a question of priorities.
Speaker 2: You know, the car business is a capital in tons
Speaker 2: of business. And you know Tesla's been They've had a
Speaker 2: lot of things go well for them, but they've been
Speaker 2: resting on their laurels and and you have to invest
Speaker 2: your money in something in order to keep growth going
Speaker 2: in the car business either, right, you keep explaining the
Speaker 2: superchargers or the you invest in.
Speaker 1: New cars or must cars.
Speaker 2: Yeah, and so the soup, so the the cyber truck
Speaker 2: like in some ways there was it was it was
Speaker 2: a brilliant idea to make a big truck because if
Speaker 2: you can only compete in one car market in the world,
Speaker 2: the combination of volume and profit margin in full sized
Speaker 2: trucks in America is the number one best business period
Speaker 2: right right that that business keeps the Detroit automakers going.
Speaker 2: They barely make any money on anything other than trucks.
Speaker 2: The trucks essentially subsidize most of the rest of their businesses,
Speaker 2: and so and so, you know, targeting that segment was smart. Uh,
Speaker 2: Targeting with essentially a meme was not smart. And I
Speaker 2: think that to me, the cyber truck is a symbol
Speaker 2: of sort of uh, you know, Elon's ego, sort of
Speaker 2: hitting escape velocity, uh, and essentially reaching a point where
Speaker 2: he can no longer take advice, like whether it's just
Speaker 2: in terms of the styling, you know, like like you
Speaker 2: could have you could have done a wedgie truck like
Speaker 2: that and and not made it look like such garbage.
Speaker 2: If if he'd listened to his his dialist Printsman whole
Speaker 2: thousand is certainly talented enough to have made a much
Speaker 2: better design or version of that concept. It was clear
Speaker 2: Elon was like, no, I wanted to be flat and
Speaker 2: straight lines, and I wanted to look like low polygons,
Speaker 2: like like.
Speaker 1: A video game, like the game of Flashback.
Speaker 2: Yeah. And I think it's like in his mind the
Speaker 2: difference between a rendering and reality is like blurry to him.
Speaker 2: I think for him, like if it looks good in
Speaker 2: a rendering, well of course it's gonna it's gonna look
Speaker 2: good in reality. And and you know, the rest of
Speaker 2: all of Tesla's designs have been you know, you can
Speaker 2: definitely tell the quality problems if you know what to
Speaker 2: look for. But they've got these curves and these different
Speaker 2: panels and these things going.
Speaker 1: On, and the guy other than designing them.
Speaker 2: Yeah, well, I mean obviously, as you know, they have
Speaker 2: a designer. It's just that Elon won't listen to anybody.
Speaker 2: I think that's I don't know of any other way
Speaker 2: to explain, right, Like, like the product play, any team
Speaker 2: would tell him. Listen, Elon, Like, we know this full
Speaker 2: sized truck segment. It's so huge. We can build our
Speaker 2: next wave of growth if we get the right product
Speaker 2: to this segment.
Speaker 1: Right, Yeah, they made the model s for trucks like
Speaker 1: an eight eight or one hundred grand fucking brilliant truck,
Speaker 1: which they are fully capable of doing, surely.
Speaker 2: Yeah, well except that, except that Elon doesn't believe in
Speaker 2: market research, rightft true, and and and he goes with
Speaker 2: his gut. And it's like if he thinks it's cool,
Speaker 2: then it's going to work. And I think, right, like,
Speaker 2: this has been true enough for a long time.
Speaker 1: But has it? Okay, I actually want to push back
Speaker 1: on that. Has that actually been true since like twenty sixteen?
Speaker 1: Because what cool idea has Elon Musk had that's worked
Speaker 1: in that time?
Speaker 2: Well since twenty sixteen, So I mean I've always argued
Speaker 2: that that, you know, full self driving was also one
Speaker 2: of the It was really the first time where he
Speaker 2: sort of hit this escape velocity, like he's always had
Speaker 2: these these hypeie kind of things.
Speaker 1: Yeah, it's a good idea. I'm not saying it's not.
Speaker 1: It's just the way he manifest today is the problem.
Speaker 2: Yeah. And and I mean, you know, I think throughout
Speaker 2: the history of the company, right, like so like the
Speaker 2: Tesla Roadster, you know, like originally it was just gonna
Speaker 2: be uh, the original one was just gonna be like
Speaker 2: a lotus of lease with batteries and an electric motor
Speaker 2: shoved into it. Elon kind of both turned it into
Speaker 2: a better product and a product that really established Tesla's brand,
Speaker 2: but also killed the financial viability of it at the
Speaker 2: same time. Uh, you know, and and and and at
Speaker 2: that point, right it was all about building up hype.
Speaker 2: It didn't have to perform as a business. He could
Speaker 2: he could emphasize sort of brand building and looks and
Speaker 2: feel over the profitability because it was an early stage.
Speaker 2: It was you know there they're pure play. You know,
Speaker 2: it's it's experimental. Yeah, yeah, so we just use it
Speaker 2: to raise more money. And then and then we'll get
Speaker 2: serious right the process.
Speaker 1: They've just never released the second Road stuff. It's just
Speaker 1: never coming out. No, No, it's fucking insane. Like there's
Speaker 1: so many people have written about this thing.
Speaker 2: Well, and people put money down on it. Remember the
Speaker 2: Founder's edition, people put down fifty at the entire full
Speaker 2: price two hundred fifty thousand dollars up.
Speaker 1: It's good. That is bonkers. That is come on.
Speaker 2: But but like this is the thing with Tessel too, though,
Speaker 2: is that like, once you get away with something for
Speaker 2: a while, how do you then decide, Okay, this is
Speaker 2: not actually acceptable? And I think this is kind of
Speaker 2: the problem that full self driving an autopilot are having, right,
Speaker 2: and I think hopefully knits A, you know, will take
Speaker 2: action and that will be it. It's the government, right,
Speaker 2: like they should be the ones who step in. And frankly,
Speaker 2: I think, you know, if you want to look at
Speaker 2: you know, who's what what does this whole story sort
Speaker 2: of point to in terms of being the underlying problem.
Speaker 2: It's not Elon really in the sense that Elin's just
Speaker 2: following incent his incentives, Like he's come out of a
Speaker 2: situation where it's okay to kind of lie and and
Speaker 2: exaggerate and in order to make yourself wealthy. And he's
Speaker 2: been good at that, and so he's just kind of
Speaker 2: continuing to follow the incentives there. The real failure is
Speaker 2: is law enforcement and regulators, right, Like, as a society,
Speaker 2: you know, you have someone who's endangering what's already a
Speaker 2: very dangerous activity, making roads even less safe, while lying about,
Speaker 2: you know, claiming that it is safe and doing it
Speaker 2: to become wealthy. Like even if you think it should
Speaker 2: be okay for Elon to do this because he's magic
Speaker 2: and special, the example that it sets right then it
Speaker 2: tells everyone else this is an okay way to become
Speaker 2: the richest man in the world is by endangering other
Speaker 2: people and lying. You know, that is an example. There's
Speaker 2: a society. I don't think we can afford to let
Speaker 2: sort of sit unchallenged, And so I think the real
Speaker 2: failure there here is is just it's the government.
Speaker 1: So I thought that was a really good point to
Speaker 1: end the interview, because while Musk has and continues to
Speaker 1: be and probably will for WHOA, He'll continue to a
Speaker 1: horrifying man that constantly tests how far a billionaire can go.
Speaker 1: The failure to hold Tesla accountable is one that lands
Speaker 1: at the feet of the government and really the media.
Speaker 1: For years, the press has given Musk fairly unquestioning press
Speaker 1: even to this day, though there are some exceptions, people
Speaker 1: like Ednita Bayer, Lourical, Odny Thenett, Lopez al and Nonsmann,
Speaker 1: Preston Grind Ryan Mack. If I left you out, I'm
Speaker 1: really sorry, but this sounds like a lot of people.
Speaker 1: But there are so many more members of the media
Speaker 1: who have just huffed Musks farts. Even last week, Alex
Speaker 1: Cantrowitz of Big Technology. I really really respect Alex. I've
Speaker 1: loved his work since BuzzFeed. I think he's phenomenal, except
Speaker 1: for this. He uncritically published an email from Mask about
Speaker 1: his plans for Grok, the large language model he's bolted
Speaker 1: onto Twitter, and how it will interface with Twitter's news feed,
Speaker 1: generating stories stories from tweets. Now, the big miss here,
Speaker 1: other than just copy pasting something Elon Musk said, was
Speaker 1: leaving out the fact that Grog has been doing stories already.
Speaker 1: It's been summarizing the news, including multiple hallucinated stories like
Speaker 1: one about basketball player Klay Thompson allegedly vandalizing places with
Speaker 1: bricks after Gok misunderstood that people were referring to him
Speaker 1: bricking shots in a basketball game very basic English, and
Speaker 1: even then Grok can't get it. Alex, what the hell
Speaker 1: are you doing?
Speaker 2: Mate?
Speaker 1: I said this on Twitter and I'll say it on here.
Speaker 1: What are you doing? You are smarter than this. I
Speaker 1: do not know why you're doing this. No one should
Speaker 1: be doing this. If Elon must send you something, you
Speaker 1: give it a critique, you look at it through the
Speaker 1: fair lens. Because this man is not trustworthy. Elon Musk
Speaker 1: he half asks everything, He rushes, he tricks, he cheats,
Speaker 1: he half explains him moreover, he lies. Elon Musk is
Speaker 1: not someone to take it a word or to treat
Speaker 1: with the benefit of the doubt. Every time that we
Speaker 1: buy into whatever weird narrative or made up thing he
Speaker 1: has about how Tesla will work itself out of a
Speaker 1: jam or how X will be big. We're helping a
Speaker 1: man who has acted disingenuously and dangerously and will continue
Speaker 1: to do so. A man who platforms actual nazis a
Speaker 1: man that retweets anti Semitic things. This is who we're
Speaker 1: dealing with. And as I've said before, though, governments must
Speaker 1: also take Musk a lot more seriously, and they should
Speaker 1: cut him out of subsidies and programs. I'd say permanently,
Speaker 1: but at least as long as he continues to release
Speaker 1: this buggy dangerous software and platforms, racists and insane freaks
Speaker 1: who would kill people like me. I am Jewish, and
Speaker 1: I'm confident that some of the people he shared would
Speaker 1: absolutely murder my ass dead. And that's the thing. This
Speaker 1: is the guy. This guy has billions of dollars. Elon Musk.
Speaker 1: He's a liar, he's a scam artist. And it doesn't
Speaker 1: matter that he's got billions of dollars. One can still
Speaker 1: be corrupt, selfish, and a complete fucking idiot with that
Speaker 1: many zeros in the bank. While the threat of Elon
Speaker 1: Musk is something to take very seriously, though his ideas
Speaker 1: are most certainly not so, I challenge you, as a
Speaker 1: member of the media, as a listener, as a consumer,
Speaker 1: to look at everything he does in the same way
Speaker 1: you would a teenager that has been lying to you
Speaker 1: for months. That's who Musk is, and he's been lying
Speaker 1: a lot longer than a few months. He's been lying
Speaker 1: for the best part of a decade, and he manages
Speaker 1: to make money and spiked Tesla's stock every single goddamn time.
Speaker 1: People like Jim Kramer and his ilk fuel his murderous,
Speaker 1: genuinely dangerous ideas. I challenge you, whoever this is listening,
Speaker 1: to think very critically about this man. Thank you for
Speaker 1: listening to Better Offline. The editor and composer of the
Speaker 1: Better Offline theme song is Matasowski. You can check out
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