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