Synopsis: Tesla at multiple crossroads of goals & identity.
In discussion of this topic, a Tesla owner and “BYD and Tesla Owners” youtuber asked: “One question, if Tesla focuses less on being a car company, what will they focus on?”
Within one week, Elon Musk had repeated “Tesla is not a car company“.
Tesla ending being seen as a car company could lead to quite an identity crisis in the minds of consumers, and when combined with lack of new vehicle products able to continue growth of vehicle sales, the car side of the Tesla business is likely to lose market share and weigh on the share price until at least the end of 2025.
It could become a spiral. A drop in profits leads Elon Musk to be further drawn further into focusing on other “not a car company” aspects of Tesla, which won’t help sales, then sales fall further.
Faced with an aging product lineup, cooling EV demand, intense competition from other automakers and the CEO’s own antics, Tesla’s sales have fallen off dramatically in recent months–even in strongholds like California.
InsideEVs: May 2024: Thousands More Teslas Are Piling Up In Parking Lots
Unless something turns around the sales trend for Tesla in China for Q2 results, sales number look problematic. Plus, there is the fact that Elon Musk has declared he will leave Tesla if Elon Musk’s own contentious multi-billion-dollar compensation package is not approved, while others may leave if the package is approved.
While the next schedule Tesla announcement is to be “Robotaxis” in August, and this seems to be about a questionable pivot into Tesla becoming a direct competitor to Uber rather than the business of selling cars to consumers. Elon Musk has been progressively moving further from his previous car based “master plans” towards a new vision of Tesla as an AI and robot company. The original goal of the “phase 2 master plan” was to transform car ownership through self-driving, not use self-driving to make car ownership redundant. Phase 3 was to create massive scale, order to transition humanity away from fossil fuels, and perhaps now that has evolved into, if people don’t need to own cars, that will transition them away from fossil fuels, and if that is the case, arguably far less scale would be needed.
It also raises the question with robots and whether Tesla also plans to also create a service business from its humanoid robots, or sell them to customers, but that is another topic.
It feels like the dream of Tesla headed towards being 20 million vehicle a year car maker is over, and in reality, Tesla never really committed to building a product portfolio in line with that goal.
The AI and robot business may be best positioned to fill the void and build the mission for a Tesla future with greater value than the car business, and perhaps “robotaxis” may be a bridge to that future, but right now Tesla still needs that car business. It is just too soon for Tesla to have credibility there will be sufficient income from other business, and credibility in other business depends on continued successful execution of being able to grow the car business.
For revenue, the reality is Tesla is still a car company, even if Elon Musk does not want Tesla still seen as a car company. The car company side of Tesla is, in my opinion, in for a tough time until near the end of 2025, with globally quite flat sales while rivals continue to grow, and unless Elon Musk can generate a lot of excitement from new directions and convince people to see Tesla as so much more than a car company, the share price will fall. Still, other car companies could have far worse results, with not only signals from Warren Buffet signaling a potential fall in stock prices in general, but also many other car companies likely to have far worse sales results in 2024, particularly due to loss of sales in China. Q2 2024 will be very significant. A big factor will be whether a falling stock price erodes confidence in Tesla.
Tesla’s retail sales in China in April [2024] were 31,421 units, down 21.4 percent from a year ago, and ranked No. 5 with a 4.6 percent share.
Automakers’ share of China NEV market in Apr: BYD tops with 37.5%, Tesla 5th with 4.6%
Tesla is currently mostly a car company trying to transform into mostly an AI and robotics company.
For the next year to 18 months, it does look like it could be quite a mess as Tesla decides whether the company, and Elon Musk, are still committed to being a car company. I really question if it still makes sense for Elon Musk to be the CEO of a car maker. Not that Elon doesn’t have the skills, just that it is no longer his focus. It must be hard to keep focus on the original goal as times, and Elon’s fortunes, have progressed. Perhaps Elon should hand the reigns of the car company to someone else and focus on the things that are not being a car company.
What is Tesla if not a car company? AI & Robotics?
Within one week of publishing “Tesla no long car company?”, I saw this headline “Musk flags ‘manufacturing revolution’ in EVs, but says Tesla is not really a car company“. Sadly, the article did not provide a link to an actual quote from Elon Musk, however Elon and others have said this in the past and a search for “Tesla is not really a car company” does reveal this is an opinion shared by many.
As Tesla car sales faltered, Musk delivered an optimistic pivot: Tesla isn’t a car company.
April 25, 2024: Elon Musk insists Tesla isn’t a car company as sales falter
Elon Musk has made statements suggesting that Tesla is not just a car company. According to some sources, he believes that Tesla is a software company, and its primary focus is on developing artificial intelligence (AI) and robotics. This perspective is reflected in the company’s efforts to expand its product line beyond electric vehicles, such as its autonomous driving technology and its foray into the robotics industry.
AI-Generated Answer.
I think it is very clear that Elon Musk has been far more focused on AI and Robotics over recent years than on cars. Elon Musk played a role in the forming of Open AI, the company that brought Chat GPT to the world, and has recently had
I would argue that EV for transition the world does need, Tesla being a car company has so far been pivotal. Plus, until probably 2030, the world still needs the continued focus of Tesla as a car company to provide some commonality between car markets. Without Tesla, the US and to some extent Europe would lose momentum, and the rest of the world be slower to gain momentum without Tesla continuing to be a source of innovation. Even if Elon Musk and Tesla also have other goals someone needs to keep focus within Tesla for at least the part of Tesla that is a car company.
The “dummy spit” on the car business.
The reaction from Elon Musk to the poor sales result to me seemed like a “dummy spit“. Then having already written that, I found this, suggesting similar views by others:
KEVIN PAFFRATH: Oh, my gosh, this was terrible. I feel bad for him. Look, he’s got a lot of things going on, legal battles, custody battles for his kids now, but it doesn’t justify acting like Trump on Twitter stonewalling the SEC or the European Union, and quite frankly turning into a little baby on the earnings call.
I mean, he was almost in tears. It showed a complete lack of leadership. Tesla’s a leadership-less company right now and it’s terrible. That’s why their CFO just left, I believe, as well.
Musk turned into ‘a little baby’ on Tesla call: Investor (yahoo.com)
One factor is the lack of a robust and reliable charging network other than the Tesla Supercharger system. We thought opening the Tesla chargers to all electric cars would solve some of those concerns, until Elon Musk had one of his snits and fired most of the Supercharger team. That has created more anxiety, more doubt, and more fear. Thanks a lot, Elon. Great job giving potential EV buyers an excuse to hold off at a critical moment in time.
Hybrid Mania At An All-Time High
The redundancies and some the departures of senior staff, and in particular suggestions the layoffs should match the fall in earnings, all feel retaliatory.
When the dust settles, Musk has said he will focus more on the car business, but the robotaxi announcement seems to suggest that this focus will see a stronger focus on making the car business more a part of the AI and robots future.
It may be that the experience with Twitter has taken a toll, if not on Elon himself and his patience, then at least on how he is perceived by others, and the confidence of others that the Elon Musk way is sure to be the right way.
Once Q2 2024 results are published, if sales are dragged down by losing market share in China and flat sales in the US and Europe, the people might start to compare Tesla with Twitter.
Possible future directions?
The options for Tesla include, but are probably not limited to:
- Continuing “straight ahead” which is a path of progressively turning into even more of an AI and robotics company and continuing loss of focus on cars.
- Turning back into a car company.
- Divesting the car company business to become a fully non-car company and perhaps selling or licensing the car division.
- Dividing up the business to better allow following multiple directions.
I could only picture A or D happening, but B or C become likely if Elon Musk follows through with his threat if his compensation package is not approved departs Tesla or calls for it to be split up.
Then there is the other crossroads of the future relationship with Elon Musk. Does he focus on the car business, divide his attention, or delegate someone else to focus on cars? I suggest, somewhat controversially, that it no longer makes sense for Elon Musk to the be head of a car company, mostly because I think his world has become too removed from that of customers for a car company to focus on properly on customer needs, as discussed below.
I also suggest Tesla has for years now, been deviating from the original path. The original founders, which despite some misconceptions did not include Elon Musk, appeared to clearly envision a car company that made electric cars which could, by being better than traditional ICE vehicles, take the world down a path where people could still have desirable cars without emissions.
I believe the vision of Tesla has over time drifted away from being a car company, which is probably why the company changed its name from Tesla Motors (2003-2017) to Tesla Inc in 2017.
One of the first steps away from being a car company was going all in on self-driving to the extent of believing the value of the company was entirely based on self-driving:
Tesla founder Elon Musk said the key to his electric automaker’s value is whether it can achieve self-driving technology, adding that the firm would be “worth basically zero” without it.
The billionaire was talking about several software issues for Tesla vehicles that he wanted to fix, such as the in-car web browser, which he said is currently too slow.
“But the overwhelming focus is on solving full self-driving,” Musk said in an interview with the YouTube channel “Tesla Owners Silicon Valley,” published Tuesday.
“That’s essential. It’s really the difference between Tesla being worth a lot of money or worth basically zero,” he said.
Business Insider Jun 2022: Elon Musk says the difference between Tesla being ‘worth a lot of money or worth basically zero’ all comes down to solving self-driving technology
Then there is the focus on robots. Elon musk has said for some time now that Tesla Robots will be a bigger part of the company future than cars, and that Tesla cars are really robots anyway.
Tesla chief Elon Musk has said the company’s humanoid robot Optimus would eventually be “worth more than” its self-driving car business.
Independent April 2022: Elon Musk says Tesla’s robot Optimus will be ‘worth more than’ company’s full self driving business
The vision is that robots will become a bigger part of the business than cars.
Which, given Tesla also operates charging networks, sells home and commercial “Powerwall” and “Megapack” battery storage, grid scale energy storage, solar panels and solar shingles, creates quite mixed overall vision.
But the latest step, prioritizing Robotaxi over selling a higher volume electric car, is likely the most significant step away from being a car company yet.
If Tesla is not a car company, will it continue to sell cars?
This calls into question whether the company still believes selling cars to consumers at all rather pursuing a vision where it provides cars as a service, at a time when it could be argued the world really needs Tesla to continue to play a key role in the transition from fossil fuelled vehicles.
Tesla has some real decisions to make:
- Is the right path to value for shareholders to still want to be a car company?
- Is Elon Musk the right CEO going forward and is he worth the cost?
On the question still being a car company, it is not like people are saying Tesla will stop selling cars, just that selling cars may become more a side business and not main business and may not be a business able to support the targeted share price.
On the question of Elon Musk, notes are being collected below, and most likely if there is a right answer, that will be decided by either shareholders, or those who hold sufficient influence over shareholders.
Tesla: The world needs Tesla cars, but also needs something new from Tesla.
The Tesla product portfolio is very suddenly looking dated.
The only real volume products for Tesla in 2024 are the Model 3, and its SUV derivative of the Model 3, the Model Y.
Other Tesla models on sale, the Cybertruck, Model S and Model X all currently sell in limited volumes. The Cybertruck is expected to increase in volumes in 2025, but at this time only for the US market.
The Model 3 was first released in the US and Canada in 2017, and in Europe, China, UK, and many other markets including Australia, New Zealand in 2019. A refreshed version has become available in most markets 2024, but this is quite a long time for a minor “mid-cycle refresh”. Tesla cars have always had “over the air” updates allowing new software features, and there have been vehicle updates to the Model 3 even prior to the refresh, but the vehicle updates have been mostly to lower production costs and generally apart from batteries, unlike software updates, have not been updates for the customer.
Sales began in 2020 in the USA and Canada, China in 2021, and Europe and countries such as Australia in 2022.
The Model Y is currently the world’s bestselling model of vehicle. Not just EV, but any vehicle, which is impressive, but can be difficult position to maintain.
The problem for Tesla is that the Model 3, and to some extent the Model Y, are based on 2017 designs, which in the traditional vehicle market would mean that are due to be replaced by ground up new successors, and in the world of EVs, means they are starting to seem outdated, and lack features such are “vehicle to load”, the ability to be a source of household voltage power, that all competitors now have.
With the Model 2 now delayed until 2025, and most likely taking time to ramp up production, the best hope for a “new” mass market vehicle would be a successor, or at least significant refresh, for the Model Y.
The highly-anticipated Tesla Model Y facelift, codenamed Juniper, won’t be launching this year after all.
After the Tesla Model 3 recently received a facelift, referred to as the Highland, there had been reports the Model Y would follow suit shortly thereafter.
However, Tesla CEO Elon Musk has dispelled those rumours.
“No Model Y ‘refresh’ is coming out this year,” said Mr Musk on his social media platform X (formerly known as Twitter).
June 10 2024: Tesla Model Y ‘Juniper’ update not coming this year, says Elon Musk
Without Tesla as a car company, maybe only China would have had any EVs!
Consider the car wars of the early 2000s as described in the film “Who killed the electric car”.
When General Motors engineers showed that perhaps electric vehicles could be more than forklifts, golf buggies and tiny city “toy” cars, the industry panicked and shut down electric cars.
Without Tesla, and to some extent the efforts within China by BYD, the efforts of those first rebels from the pop group A-Aha and the General Motors GM1 would have been defeated by the empire by 2010 to kill the electric car.
Instead, while the “Jedis” of Tesla, Carlos Ghosn, and BYD working at it, for most of the world it was really only Tesla that gave the return sufficient strength to bring German brands, new EVs brands and eventually most of the industry to force alliances with the rebels.
Without Tesla, EVs might have been so far just a Chinese thing.
Telsa is needed to fight the threat of “Empire striking back”.
Now in 2024, political upheaval is giving the empire a chance to again strike back, and given the current climate trends, the result could be quite devastating.
Realistically it needs both Tesla and BYD to bring enough mainstream EVs to world and make a profit while doing so to keep the EV transition on track.
While globally EV sales are still growing, in key Tesla markets, EVs are stalling.
The true picture varies by region, and 2024 will likely see flat sales for EVs sales in the USA and much of Europe, but strong EV sales growth elsewhere including China. Globally, EV sales will still grow, but rather than exponential growth, what is expected globally is slightly lower growth than in 2023, driven by a significant slowdown in the USA and Europe, an acceleration in many markets where in the past very few EVs were available, and continued growth in China.
EVs Stalling In 2024: End Of The Road, Speedbump, Or Buyers Caught Between Trump, Musk And China?
Generally, in markets such as the USA and Europe where EVs from China face tariffs and represent the strongest markets for Tesla, EV sales are stalling. While China has also been a major market for Tesla, in China itself EV sales are not stalling and Tesla is no longer key to the EV transition.
The Tesla Sales Problems for 2024.
Tesla’s demand problem
Thousands More Teslas Are Piling Up In Parking Lots
Faced with an aging product lineup, cooling EV demand, intense competition from other automakers and the CEO’s own antics, Tesla’s sales have fallen off dramatically in recent months–even in strongholds like California.
Share price and market capitalisation or total value.
The mission of Tesla is not to save the world, but to deliver financial returns for shareholders.
Falling market cap.
Tesla became the highest valued “car company” in the world in early 2020, taking over from Toyota, who at the time sold around 10x more cars per year, with Tesla reaching 3x the value of far larger Toyota within that same year of 2020 when it took the lead. Now in 2024, Tesla still has a greater total valuation by market cap than Toyota, but now at time of writing in April 2024, Tesla has a market cap of $452.39 Billion and Toyota is only 30% lower at $310.31 Billion.
Tesla reached a peak market cap of $1.2 trillion on January 3, 2022, which would have made no sense for anyone who viewed Tesla as just a car company and was over 4x the value $256.7 billion valuation of Toyota at that time.
How has Tesla previously achieved such high share prices, as a car company, or…?
Some saw Tesla as the leader in the EV future of cars, with the potential to fulfil Elon Musk’s vision of by around 2030 selling 20 million vehicles per year. This would mean taking 1/4 of the future world car market and around 2x the volume Toyota has ever managed:
Another lofty goal that the billionaire entrepreneur has kicked around: Sell at least 20 million Teslas in 2030, effectively transforming the young firm into the largest car manufacturer the world has ever seen. But is that even remotely possible? Auto manufacturing experts have their doubts.
Elon Musk wants Tesla to be the biggest car company ever by 2030. Experts say there’s no way.
Others already saw the Tesla valuation as being justified by self-driving technology and AI, perhaps others saw Tesla as general powerhouse of technology for an electric renewable future.
As a US based company in a country where EV sales are seen as stagnating, Tesla vehicle sales alone do not support the current company value. A change of direction is needed to sustain even the current share price. This creates the need to again reiterate: “Tesla is not just a car company”!
But even these outlandish claims, which seem to have had the intended effect of boosting Tesla shares (up 12 percent as of writing), aren’t anything new – Musk spent plenty of time in the 2010s claiming he’d have one million robotaxis on the road by 2020. As we all know, 2020 came and went without any such excitement.
Musk moves Tesla’s goalposts, investors happily move shares higher
Some are convinced, but not all.
The entry level “Model 2” and share price.
Despite the suggestions of internal turmoil within Tesla over Robotaxi seemingly getting priority over the lower priced Tesla, the lower priced vehicle does seem to have been confirmed for early 2025, although without yet having all production advances necessary to keep the cost at the target level.
In 2024 and even 2025, the lower priced Tesla may be more an exercise in share value support than sales.
Cybertruck.
It has been labelled a vanity project, and I think of it as a pickup for the large group of people who don’t need pickups.
Until 2025, only the US$102,000 and US$122,000 versions of the Cybertruck are being delivered.
A problem is, once the group of people who don’t need pickups is further reduced by excluding those who are don’t have problems with Elon Musk, and then you factor in the production problems with a vehicle that pioneers making such a vehicle from stainless steel, and the result is unlikely to produce big sales numbers.
Yes, the limited volumes of Cybertruck also pioneering steer-by-wire prior to real mass market adoption, but the path and payback for mass production by Tesla is not yet clear. Steer by wire is a very worthy advance that once it reaches volume vehicles like the Model 3, Model Y and “Model 2” could give Tesla a an even bigger breakthrough in cost efficiency. For now, steer by wire significantly enhances the driving experience for the Cybertruck, but it is not the vehicle to showcase its cost effectiveness.
At a time when Tesla needs to spread the portfolio to create growth in electric vehicles sales, the Cybertruck feels like an answer to the wrong question, or a least an answer that is not yet ready for the bigtime.
Tesla depends “cult status” to cover teething problems and flaws in build quality.
Tesla’s brand image key to sales, and to how customers perceive the product. Even “Psychology today” has discussed the “is Tesla a cult” question that also reveals many hits in search. Lose the image that fuels that cult status question, and sales and the share price will suffer.
And there’s all these complex interdependencies, around vibration, and around things that matter to drivers.
McDuffy is referring to concept call noise vibration and harshness. A carmaker gas to ensure all the components in a car are fitted together perfectly. If not, you get intolerable levels of all three. Every automaker who has ever succeeded is constantly doing a lot of this fine tuning. Tesla probably does a little less of it, and some people will complain about that. You know, the fit and finish isn’t as good. The gaps aren’t so clean, things look a little shoddy, and so far, people haven’t cared because they love the power, they love the big screen, they love the software.
Industry analyst on how Tesla enthusiasm can compensate for some quality flaws (see video).
So effective is the “halo effect” that many perceive Tesla to actually shine in areas where the reality is the emperor has no clothes. The risk is, if the halo slips, it could slip a lot.
The AI-robot robotaxi full self-driving car gambit.
Up until the recent “Robotaxi” announcement, self-driving was proposed as reason for a regular car owner to buy a Tesla with the potential of one day owning a driverless “Uber” that could earn owner money when they did not need the car for themselves. But now the suggestion is that Tesla will make that profit from cars operating as driverless “Uber” type vehicles.
It is still unclear how much profit is targeted, when profits are to be expected, and exactly what role Tesla itself will play. What is clear is if this, rather than ramping up sales with a new lower cost model, is the priority, then the vision is moving further away from being a seller of cars to private owners. The Robotaxi vision is very much that people won’t need to own cars, which would mean a lot less car sales!
Indeed, during last week’s quarterly earnings call, Musk announced that autonomous vehicles and AI were the primary areas of interest moving forward at Tesla. Company stock, which was then on a downward decline, reversed its trend, but has also fluctuated — at this writing, the value has lost $6 a share today and is at $178.85.
Our CleanTechnica editor-in-chief, Zachary Shahan, asked: Why doesn’t Tesla start with a Tesla ride-hailing service that uses human drivers? As an entree into the later robotaxi/autonomous service, it would immediately be a new and likely profitable business venture that would excite shareholders while they await further autonomy research and development.
Can The Tesla Brand Really Shift Gears Into A Successful Autonomy Company?
Even if the technology hurdles are cleared, legal solutions could take decades.
It’s worth noting that just because Tesla plans to unveil a robotaxi this year doesn’t mean it will be released any time soon.
Tesla Wants To Pivot To Robotaxis. It Still Won’t Answer One Key Question
B.C.’s updated Motor Vehicle Act now makes it an offense to drive or permit the driving of a vehicle that’s equipped with at least Level 3-capable driving assistance hardware, with drivers facing a penalty ranging from $368 (Canadian) to $2,000 (Canadian) and a maximum of six months in prison.
Cars With Level 3 Driving Assist Banned In British Columbia
While that article does go on to say Tesla’s are not regarded as Level-3 capable, they may have missed considering the point that Tesla insists its cars already equipped with hardware that is at least level 3 capable. If, as that quote suggests, having the relevant hardware even without the software is sufficient to break the law, then a legal minefield awaits. Reading the actual government website does still leave things quite ambiguous but does specifically provide for level 3 and above systems becoming legal once certified.
Elon Musk once claimed that Tesla could have a million robotaxis on the road by the end of 2020. Nearly three years later, the automaker is still working to achieve that goal. Amid disputed rumors that Tesla has abandoned its plans for a $25,000 electric car, Musk now says that Tesla plans to reveal its long-awaited robotaxi in August.
Critics are skeptical, however, as Tesla has yet to solve the problem of self-driving even in the cars already for sale on the road today. This is despite these vehicles having hardware “capable” of Full Self-Driving since 2016 and refreshing the hardware to its current version, HW4, last year. All signs point to either the software aspect, which Musk previously attributed to compute-limited training restraints, or lack of advanced hardware like Lidar—which Musk called a “crutch” in 2019.
It’s now 2024 and Tesla is still struggling to solve the problem it has been working tirelessly to solve for nearly a decade. It’s getting better, though, even if its cars are jumping a few curbs. The automaker recently took its Full Self-Driving software out of beta, renaming it “Full Self-Driving (Supervised).”
The name change seems like an oxymoron—how can something be both fully autonomous and require supervision at the same time? FSD was never fully autonomous, and Tesla, as Tesla told the California DMV over email, it was always a Level 2 driver assistance feature despite controversial branding. To top it all off, Tesla has racked up zero miles testing autonomous vehicles in California in 2023, so how can the automaker be ready to reveal a robotaxi in just four short months with seemingly no on-road testing?
Tesla Wants To Pivot To Robotaxis. It Still Won’t Answer One Key Question
Price of self-driving to Tesla owners.
Tesla has officially raised the price of its Full Self-Driving (FSD) package to $15,000, as CEO Elon Musk promised.
Is it worth $15,000?
For years now, Musk has stated that Tesla would keep gradually increasing the price of its Full Self-Driving (FSD) package as functionality improves leading to the actual final form of the product, which is, as its name suggests, the capacity to fully drive autonomously.
Sept 2022: Tesla raises Full Self-Driving price to $15,000 – is it worth it?
In 2020, Tesla CEO Elon Musk said that FSD’s value “is probably somewhere in excess of $100,000.” In 2023, Musk called Teslas appreciating assets and said the price of the self-driving feature would only increase.
Tesla cuts its ‘full self-driving’ subscription in half, also cuts one time price | ZDNET
At its peak, full self-driving cost $15,000. As of 23rd of April 2024, the price has just dropped from 12,000 to 8,000. Given those who paid 15,000 2 years earlier have not yet ever had the full self-driving they paid for, some seeing the same thing available now almost half what they paid may feel somewhat unhappy.
Unproven Robotaxi business models.
The quotes below question how close Tesla, or in fact anyone else, is to earning real revenue from Robotaxis or self-driving.
Elon Musk once claimed that Tesla could have a million robotaxis on the road by the end of 2020. Nearly three years later, the automaker is still working to achieve that goal. Amid disputed rumors that Tesla has abandoned its plans for a $25,000 electric car, Musk now says that Tesla plans to reveal its long-awaited robotaxi in August.
Critics are skeptical, however, as Tesla has yet to solve the problem of self-driving even in the cars already for sale on the road today. This is despite these vehicles having hardware “capable” of Full Self-Driving since 2016 and refreshing the hardware to its current version, HW4, last year. All signs point to either the software aspect, which Musk previously attributed to compute-limited training restraints, or lack of advanced hardware like Lidar—which Musk called a “crutch” in 2019.
It’s now 2024 and Tesla is still struggling to solve the problem it has been working tirelessly to solve for nearly a decade. It’s getting better, though, even if its cars are jumping a few curbs. The automaker recently took its Full Self-Driving software out of beta, renaming it “Full Self-Driving (Supervised).”
The name change seems like an oxymoron—how can something be both fully autonomous and require supervision at the same time? FSD was never fully autonomous, and Tesla, as Tesla told the California DMV over email, it was always a Level 2 driver assistance feature despite controversial branding. To top it all off, Tesla has racked up zero miles testing autonomous vehicles in California in 2023, so how can the automaker be ready to reveal a robotaxi in just four short months with seemingly no on-road testing?
Tesla Wants To Pivot To Robotaxis. It Still Won’t Answer One Key Question
An autonomous car is complicated technology, to say the least. But there is a way we can know that he really stands behind it as ready: when Tesla takes liability for crashes that occur under its vehicles’ control. Or, put another way, when Musk is willing to put his money on the line with our safety.
That should be the red line. Otherwise, it is just glorified cruise control.
“Unless Tesla says humans do not have to pay attention and humans are not driving and humans are not responsible for what happens when they’re not driving and when they’re not paying attention, then Tesla does not have self-driving,” said Bryant Walker Smith, an expert in laws around automated driving at the University of South Carolina law school.
When Will Elon Musk’s Driverless Car Claims Have Credibility?
It’s now 2024, and Tesla is far from the only self-driving option.
Earlier today, an announcement from China’s Ministry of Industry and Information Technology (MIIT) showed that nine car companies, including Nio, BYD (HKG: 1211, OTCMKTS: BYDDY), Changan Automobile, GAC, SAIC, BAIC BluePark, China FAW Group, SAIC Hongyan, Yutong Bus, have made it onto a pilot list for access and on-road passage of smart internet-connected vehicles.
https://cnevpost.com/2024/06/04/nio-makes-china-l3-l4-pilot-automakers-list/
Pony.ai, a Chinese autonomous driving startup backed by Toyota and Nio Capital, has made a filing with Chinese securities regulator for its planned US listing.
April 23 2024: Autonomous driving startup Pony files with Chinese securities regulator for US listing
Great Wall Motor-backed Chinese autonomous driving startup Haomo.AI Technology has secured yet another funding round, two months after the previous one.
Haomo has raised RMB 300 million ($41 million) in a Series B2 round of funding from a new fund set up by existing investor JZ Capital and Changxing government in Huzhou, Zhejiang province, the startup announced today.
The funding will be used for research and development to maintain its leading position in mass-produced autonomous driving solutions in China, Haomo said.
April 23, 2024: Great Wall-backed autonomous driving startup Haomo secures RMB 300 million in new funding
Waymo has spent most of my adult life working on self-driving vehicles (originally under the Google brand, until about 7½ years ago). For a long time after it finally started offering robotaxi service for non-employees, the service was free. Since December 2018, though, Waymo has offered and slowly expanded commercial service. The company provided an update this week to let the world know that is now providing 50,000 paid customer trips per week. That’s not nothing!
These are big numbers. Of course, they don’t at all recoup investment costs to date, and it’s unclear when Waymo would actually make a profit — if ever. This is the challenge: it has to offer fairly low rates to have business, and that makes it hard to get a positive return on investment.
Waymo Reaches 50,000 Paid Customer Trips A Week
The Elon Musk Factor: An asset and a liability?
The liability.
Data by market intelligence firm Caliber – cited by news agency Reuters – claims the pool of buyers considering Tesla for their next vehicle in the US has dropped from 70 per cent in November 2021 to a new low of 31 per cent in February 2024.
Caliber suggested “strong associations between Tesla’s reputation and that of Musk” contributed to the decline in consideration.
It suggested the Tesla CEO’s “increasingly right-wing politics and public statements” are impacting Tesla’s reputation and sales, including his ownership of social media platform Twitter, which he renamed ‘X’.
Drive April 2024: Elon Musk is turning off potential Tesla buyers – report
The problem with market intelligence is that without seeing the context and exact wording of the question, it is hard to judge what it means, but trends when the same question is asked, as is the case here, clearly have real meaning.
It is very clear that not only does Elon Musk have an army of adoring fans, but he is also polarising and is also amassing and army of critics.
The complete picture is complex, and most likely no one person is has that complete picture.
Elon Musk does represent a liability.,
But what counting the liability fails to capture is the net effect, as while there are people who are turned away from the Telsa by the evolving views of Elon Musk, there are also may be new people brought on board.
The cost of compensation for Elon Musk.
Then there is the question of compensation for Elon Musk for his role in Tesla, and what impact that may have on the share price, which is discussed in more detail in this page/paper that also discusses the Elon Musk plan for Tesla as outlined at the shareholder meeting to vote on the proposal, but Tesla shareholders voted to support a package of share options for Elon Musk that has been valued at $55 billion dollars.
Most recently, Tesla produced its five millionth electric car. As of the end of the third quarter [of 2023], the cumulative deliveries were close to 5,000,000 units with over 4.3 million Model 3/Model Y and over 646,000 Model S/Model X.
Tesla Production And Deliveries Graphed Through Q3 2023: From 0 To 5 Million (insideevs.com)
Dividing $55 billion by 5 million cars means the bonus is equal to $11,000 for every vehicle Tesla delivered up until Q3 2023, which is more than the profit per vehicle. The bonus is sufficient to convert profits into losses.
Tesla has launched a new website aimed at convincing shareholders to vote for reinstating Elon Musk’s $55 billion compensation plan.
Back in 2018, Tesla shareholders approved one of the biggest compensation plans of all-time: a $55 billion fully stock-based CEO compensation plan for Elon Musk.
In January, a judge sided with lawyers representing a Tesla shareholder alleging that Tesla’s board misrepresented the compensation package when presenting it to shareholders.
It’s a complicated issue, but in short, the judge found that Tesla’s board and Musk didn’t play by the rules of a public company when it presented the plan to shareholders.
Tesla launches website to convince shareholders to vote for Elon’s $55 billion payday
The layoffs and control structure.
Tesla layoffs 2024 (so far):
- April 15: over 10% of global workforce laid off as the first step in what could reach 20%
- Senior executives: Drew Baglino (The person normally sharing the stage with Elon Musk at events) and former CFO Zach Kirkhorn.
- Vice President of Public Policy and Business Development Rohan Patel
- Rebecca Tinucci (who reported to Musk as Baglino had left) and entire charging team.
- Anthony Thurston and Cathode material manufacturing team in Texas
- Staff from the software, service and engineering departments.
- May 5, Tesla Rehires Some Supercharger Employees It Fired In April, including Max de Zegher, the director of charging for North America, but not Rebecca Tinucci.
- May 9, Rich Otto, head of product launches resigns due to moral.
- May 14, AI Lead Engineer Paril Jain departed to rival robot company The Bot Company’.
- May 14, Head of manufacturing for the Cybertruck, Renjie Zhu departs.
Musk, the employees said, was not pleased with Tinucci’s presentation and wanted more layoffs. When she balked, saying deeper cuts would undermine charging-business fundamentals, he responded by firing her and her entire 500-member team.
The inside story of Elon Musk’s mass firings of Tesla Supercharger staff
May 1 (Reuters) – Just over a year ago, Elon Musk shared the stage at Tesla’s (TSLA.O), opens new tab investor day in Texas with 16 executives who gave detailed presentations on the company’s technology and growth plans, then lined up behind their boss in a show of solidarity.
“We’ve obviously got significant bench strength here,” Musk said at the time, responding to investor concerns that the world’s most valuable automaker was too much a one-man show.
Now, at least five members of that team are gone, a Reuters analysis shows. Tesla, Musk and the 16 executives on the stage last year could not be reached for comment.
Musk in a recent email to senior managers outlined plans to lay off hundreds more employees, including two top executives, the Information reported.
“Hopefully these actions are making it clear that we need to be absolutely hard core about headcount and cost reduction,” Musk wrote in the email, the report said.
Two senior executives who flanked Musk on investor day last year are gone: Zach Kirkhorn, former CFO, resigned with a nondisclosure agreement, according to Tesla regulatory filings. Drew Baglino, Tesla’s former chief battery engineer, left in the wave of layoffs Musk ordered last month. Baglino dumped $181 million in Tesla stock as he left.
Rebecca Tinucci, who headed up Tesla’s charging team, was one of two women on stage for the investor day last March.
Elon Musk’s Tesla overhaul hits executive bench he touted
Tesla CEO Elon Musk at one point wanted the EV giant to trim its workforce by 20%, Bloomberg reported on Sunday, citing a person familiar with the matter.
Elon Musk wanted Tesla to slash its headcount by 20% because its quarterly vehicle deliveries fell by that much, Bloomberg source says
Controversy, Twitter, and perception of right-wing views.
Even those believing Musk is taking the correct stance should recognise that his stances can be polarizing, and Twitter has amplified that polarization.
Elon Musk seems hellbent on transforming what was once Twitter into a far-right fever swamp.
The billionaire conspiracy theorist once vowed that the platform, which he rebranded as X, would not “become a free-for-all hellscape” under his watch. But since he made that pledge in October 2022, Musk has ordered a number of actions that fly in the face of those words.
Elon Musk is going down a conspiratorial rabbit hole and taking X with him | CNN Business
Tesla shareholders condemned Elon Musk’s alleged antisemitic behaviour, on his own social media platform, X, and other media outlets Thursday. Some investors are publicly saying he should be suspended, according to a Bloomberg report Friday.
Tesla Investors Call for Elon Musk to Be Suspended (gizmodo.com.au)
“I’m a big believer in immigration, but to have unvetted immigration at large scale is a recipe for disaster,” Musk said at the conference. “So I’m in favor of greatly expediting legal immigration but having a secure southern border.”
Elon Musk, America’s richest immigrant, is angry about immigration.
Elon Musk Drops the Master Plan?
The notes on the master plan below were all written back in 2022, but although at least on the surface the first phase of the plan was followed, the next phases seemed to be simply goals rather than a series of steps to achieve those goals, and in particular, it does not seem that there has ever been a plan to build a product portfolio that would support the around double the sales ever achieved by Toyota.
Tesla Master Plan Phase 3
One of the bolder and perhaps more surprising targets announced by Tesla CEO Elon Musk last year was the target of reaching a 20 million-vehicle-per-year production capacity before 2030.
Cleantechnica: Feb 2021.
Main Tesla subjects will be scaling to extreme size, which is needed to shift humanity away from fossil fuels, and AI.
Elon Musk on Master Plan Phase 3.
Elon Musk has apparently operated on a master plan, and has announced phase 3 of that plan, is to create massive scale. This makes it clear that growth through scale is the plan. Whilst current sales exceed production capability, it will take more than simply scaling up to achieve a target of 20 million vehicles per year, which no manufacturer has previously achieved.
But first, to recap on phases 1 and 2.
Recap On Master Plan Phases 1 and 2.
Phase 1.
So, in short, the master plan is:
Build sports car
Use that money to build an affordable car
Use that money to build an even more affordable car
While doing above, also provide zero emission electric power generation optionsDon’t tell anyone.
Elon Musk blog post.
Elon Musk has spoken at length about the difficulties Tesla faced in getting the Model 3 into production and how close they were to failure, and how with even the smallest outside factor going wrong, the plan would have failed.
However, regardless of whether it required luck or not, or whether the model S is seen as an affordable car and the model 3 as an even more affordable car, stage 1 should be seen as having been completed. Sometimes, business success can be a little like winning the lottery. It may be that the winner is no more capable than other ticket holders, but they did need to have “a ticket”, or the ingredients for success. It does not guarantee repeatable success, but I regard phase 1 as an impressive success story, conducted in the face of adversity, where failure of the plan would mean death of Tesla and financial ruin of Elon Musk.
Phase 2.
Phase 2 was to transform the car ownership experience though self driving technology. Again, Elon Musk was not the first person with the idea. Looking back to the 1980s:
In the 1980s, a vision-guided Mercedes-Benz robotic van, designed by Ernst Dickmanns and his team at the Bundeswehr University Munich in Munich, Germany, achieved a speed of 59.6 miles per hour (95.9 km/h) on streets without traffic.[5] Subsequently, EUREKA conducted the €749,000,000 Prometheus Project on autonomous vehicles from 1987 to 1995.
In the same decade, the DARPA-funded Autonomous Land driven Vehicle (ALV) project in the United States made use of new technologies developed by the University of Maryland, Carnegie Mellon University, the Environmental Research Institute of Michigan, Martin Marietta and SRI International. The ALV project achieved the first road-following demonstration that used lidar, computer vision and autonomous robotic control to direct a robotic vehicle at speeds of up to 19 miles per hour (31 km/h). In 1987, HRL Laboratories (formerly Hughes Research Labs) demonstrated the first off-road map and sensor-based autonomous navigation on the ALV. The vehicle travelled over 2,000 feet (610 m) at 1.9 miles per hour (3.1 km/h) on complex terrain with steep slopes, ravines, large rocks, and vegetation. By 1989, Carnegie Mellon University had pioneered the use of neural networks to steer and otherwise control autonomous vehicles,[34] forming the basis of contemporary control strategies.
Wikipedia on history of self driving (from 1920s).
Realistically, it is too early to say how significant the Tesla is in the history of self-driving cars, despite Teslas labelling of their technology, many see either Waymo, or XPeng, or others as ahead of Tesla.
This 2nd phase has faced less pressure, and without yet claiming success, Tesla has rose to be the most valuable car company the world has ever seen, and 6th most valuable company in an era (1st April 2022) when the top companies have risen further than any time previously in history. Plus, Elon Must rose to be the world’s richest individual. Not only has the pressure been different, but the starting point was not built in part by original company founders. Times are different.
Could Tesla & Musk lose their shine?
Elon Musk: “fewer vehicles will be needed”.
Basically, in the future, people won’t need to own cars, because of Robotaxis.
This is a view of future at odds with my own, mostly because it implies people own cars only because they need to own cars rather than want to own cars. While I technically agree that people don’t need to be able to have their own car, for most people cars are a part of their private living space. True, technically people don’t need to have their own home either, but moving to a world that reduces the percentage of people who have the current amount of living space, most likely just to support “people farming“, is not necessarily positive other than for the farmers.
Yes, less people owning cars and living in higher density conditions closer to “caged” than “free range” will allow for the even further global population growth that Elon Musk has suggested is desirable, but as perpetual population growth before being a multi-planet species is impossible, the question as to when population numbers are enough is dependent on perspective.
The economy is like a chicken farm, with a greater population producing “eggs” does increase the wealth of billionaires, so perhaps its ok for people to reduce their living spaces in any way possible in order to increase the economy so that the billionaires can become richer. But for the chickens, when is it time to consider free range instead?
The Car company CEO who doesn’t get why other people own cars.
I would argue that no one who understands what cars mean to people, would desire a future where the goal is for less people to own cars. Yet, at the 2023 Telsa Investor Day, as discussed here, Elon Musk declared that the more the more autonomous cars are, the fewer people who will own cars.
So why will fewer people own cars in the future? Logically because less people will need to own cars, and people own cars because they need them. Yet Elon Musk himself is reported to own around 10 cars, even including at least 10 cars, including a time of writing in early 2024, an E-type Jaguar, a Model T Ford, the James Bond underwater Lotus Esprit, and the Tesla Model X he uses when driving with his children. I wonder which of these Elon will no longer need once Robotaxi is released?
Elon Musk vision of an ideal future.
There is the whole fear of depopulation thing, where some people, including Elon Musk, say they fear that without intervention the world could in 70 years’ time return to population levels of 40 years in the past, and this would be an economic disaster.
I really question if, were that fall in population to happen, it would really be so bad for anyone other than billionaires.
While Elon Musk fears a fall in population, he is a strong advocate for a rise in population.
The Elon Musk vision of the future is one where the human population grows to the maximum possible. Now it may be Elon has not given real though to the implication for living standards, but it is also possible he feels maximum population will provide the greatest incentive to become a multi-planet species.
Should a car company CEO promote a future where people won’t own cars?
At one time it seemed Elon Musk was quite focused on being able to transform the experience of car ownership, but a lot has changed in the life, and vision, of Elon Musk. He became the world’s richest man, and it is logical that, with that, ambitions grow. Now his focus seems to be on AI and robotics and on becoming a multi-planet species with a huge population.
While some see population here on Earth needing to pause until after we have the technology to become a multi-planet species,
Part of the vision of continued population growth rather than a population pause, is a future where people, or at least all but billionaires, won’t want to have cars anymore as they won’t really have the room in their megacity dwellings to park them.
This is the world of the robotaxi, where less people own cars, creating the need for robotaxis. Of course, if less people own cars, then far less then there will be far current 80 million cars sold per year, and that dream of Tesla selling 20 million per year begins to sound like perhaps only Tesla would be selling cars.
The vision of transforming car ownership for car owners, and an AI future where a crowded Earth about to become multi-planet are two different visions of the future. One is of a world where there is a least a population pause so that the standard of living can be maintained and people still own cars, and the alternate future that Elon Must may not be more focused on is where the world for now progresses in the direction towards people living more like caged hens and thus needing robotaxis. I feel it makes more sense for a CEO dreaming of a future world where people still own cars, is the CEO dreaming of a future compatible with being the CEO of a car maker.
Does a Robotaxi future fit together with being a car maker?
The problem with the same company planning to run a Robotaxi business and being a car maker, that each business does best if the other fails.
The is no point having robotaxis instead of people owning cars if there is one robotaxi for every person who decided not to own their own car. The very plan of a robotaxi business is for a world with less cars, and thus less car sales.
If the robotaxis business is to be sufficiently successful to play a big role in the value of a trillion-dollar company, a huge percentage for future travel most move from private vehicles to Robotaxis. Either vehicle sales fall dramatically because people no longer own cars, or Robotaxi as a business is just not that valuable.
How does one company pursue two mutually exclusive goals that each depend on the other failing to be successful?
Competition and Market Challenges for Tesla in 2024-2025.
The big problem is that lack on new product.
USA: Market Jitters.
It is a time of political uncertainty in the US on future support for any measures seen as linked to action on climate change.
Tariffs effectively blocking BYD from the US market results in market dominance from Tesla, but it reduces the presence of price competitive attractive EVs to keep the market alive.
China: BYD et al.
In China, BYD leads Tesla in sales, just as BYD leads all others in sales. However, BYD is increasingly beginning to have vehicles directly target those sold by Tesla. Meanwhile XPeng, NIO, and now Xiaomi all have models that very directly compete with Tesla.
The world’s biggest EV market is set for a tough year, and Tesla EV sales in China could actually fall.
Asia, Oceana, Latin America, Africa, Middle East: BYD.
This is basically anywhere beyond USA, China & Europe.
In almost all these markets where BYD is active, BYD is either already ahead of Tesla, or at least has credible plans to take the lead from Tesla.
Updates:
- *2024 June 5 : Updated Tesla not the only one with self driving
- 2024 May 23 : Updated Synopsys the robotaxi gamble, Elon compensation and layoffs.
- 2024 May 9 : Updates to “layoffs“.
- 2024 April 17: First draft