Musk endeavours

[BobbyD]

Tesla puts prices up 3%. And goes back on many store closures.

Tesla have definitely done the right thing. I mean either the store closure plan or the cancellation of a large swathe of store closures has to have been the right thing either way...

Price decrease holds until March 18th, which surely can't be good for next quarter's sales, and despite all the confounding narrative created this quarter if those temporary price cuts don't give them a decent sales quarter then one has to ask what will.

Do Tesla's board actually do anything except cash their cheques and rubber stamp Elon's fever dreams?

[Howard]

Ody

Could you explain Tesla's Autopilot strategy? And what does a Model 3 Autopilot actually offer a European customer?

https://electrek.co/2019/03/12/tesla-au ... elon-musk/

As an observer two two issues seem clear:

1. Tesla appear to be taking their naive customers for a ride by charging them thousands of dollars for software which hasn't yet been developed and downloaded.

2. In a desperate attempt to extract more money from customers Tesla have been changing prices almost daily for the last two weeks.

As a long-term supporter of Musk, do you think these actions are enhancing or damaging the brand?

Regards

Howard

[BobbyD]

Good news: You know you found out you were losing your job by reading the net last week? Well it ain't so.

Bad news: We're still taking your commissions and bonuses.

- https://electrek.co/2019/03/11/tesla-on ... -pay-cuts/

I'm genuinely beginning to consider the possibility that Elon has decided to use his super powers to annoy as many people as possible in 2019, but hey what goes better with falling demand than demotivated and disengaged sales staff?

[odysseus2000]

Ody

Could you explain Tesla's Autopilot strategy? And what does a Model 3 Autopilot actually offer a European customer?

https://electrek.co/2019/03/12/tesla-au ... elon-musk/

As an observer two two issues seem clear:

1. Tesla appear to be taking their naive customers for a ride by charging them thousands of dollars for software which hasn't yet been developed and downloaded.

2. In a desperate attempt to extract more money from customers Tesla have been changing prices almost daily for the last two weeks.

As a long-term supporter of Musk, do you think these actions are enhancing or damaging the brand?

Regards

Howard

The definition of a business I most like is that of Richard Branson, paraphrased as: "Something that brings something special into someones life."

Does Tesla achieve this for enough potential buyers.

I believe yes, you believe no.

But what either of us think matters not, it is whether enough folk believe Tesla does something special for them to buy one.

Regards,

[Howard]

Ody

Could you explain Tesla's Autopilot strategy? And what does a Model 3 Autopilot actually offer a European customer?

https://electrek.co/2019/03/12/tesla-au ... elon-musk/

As an observer two two issues seem clear:

1. Tesla appear to be taking their naive customers for a ride by charging them thousands of dollars for software which hasn't yet been developed and downloaded.

2. In a desperate attempt to extract more money from customers Tesla have been changing prices almost daily for the last two weeks.

As a long-term supporter of Musk, do you think these actions are enhancing or damaging the brand?

Regards

Howard

The definition of a business I most like is that of Richard Branson, paraphrased as: "Something that brings something special into someones life."

Does Tesla achieve this for enough potential buyers.

I believe yes, you believe no.

But what either of us think matters not, it is whether enough folk believe Tesla does something special for them to buy one.

Regards,

Ody

I like your definition. So would you agree that VW are delivering something special into a lot more people’s lives across the world?

Their results aren’t bad and they look a lot more likely to deliver value than Tesla over the next three years.


Volkswagen* 2018 Final Results – The global automaker today reported better than expected results for the year to 31 December 2018.

Deliveries to customers increased by 1% year-on-year to 10.8 million cars, despite the switch to the new WLTP test procedure

Group sales revenue increased by 3%, while adjusted operating profit was flat. Profit before tax was up 14%

The group had “diesel issue” related costs of €3.2bn, in line with last year

Volkswagen Passenger Cars brand grew sales by 7%, driven by continued product momentum. Underlying operating profit fell 3% as the operating margin declined to 3.8% from 4.2% a year ago, due to higher sales expenses and investment in new electric products

The outlook for 2019 is for deliveries to slightly exceed 2018, given challenging market conditions, although sales revenue is expected to be up 5%.

Operating profit is expected to be in the range of 6.5%-7.5%, up from 5.9% in 2018

The group also announced an acceleration of its electric mobility strategy, with 70 electric models targeted by 2028, up from the 50 previously announced, with the projected number of electric vehicles to be built over the next decade at 22 million, up from 15 million.

Which company is likely to grow its sales of EVs faster between 2019 and 2022? Tesla or VW?

I’m guessing VW is going to win.

regards

Howard

PS I was hoping you would explain the benefits of Autopilot for a European customer. Is this real engineering or just hype?

[odysseus2000]

Hi Howard,

I would not put any trust in the VW accounts.

The company has shown it has a culture of lies and cheating and the accounts just look too good.

The Tesla autopilot is a very difficult call. If you go and talk to various folk in this industry most will tell you that only a very sophisticated Lidar system has a chance which Tesla does not currently use.

But industry experts are often wrong. I remember being told by one of the senior dons at Oxford that no computer would ever be able to beat a grand master at chess. Now computers are world chess champions.

The problem I have with the Lidar belief is that people do not have lidar and yet we are capable of driving. If AI via neural nets is any good, and the results with GO suggest that it is super human in many ways, it is hard to see why it can’t drive a car better than a human. But the Lidar folk will tell you that it is not good enough to eliminate the false positives and that means sudden abrupt breaking if the system spots an obstruction which is not really there. Can this be over come?

Tesla have far more auto pilot data than anyone else, so if there is away to get rid of the false positives by learning from the existing data they should be able to do it.

Musk says it is coming, but he has said that many times and it hasn’t.

I do not know.

If Tesla demonstrate a system that works, their share price will leap upwards, if not I don’t think it is already priced in so I don’t expect the price to dive if no autopilot shows up.

Regards,

[BobbyD]

I would not put any trust in the VW accounts.

The company has shown it has a culture of lies and cheating and the accounts just look too good.

Well that's flawless logic. If the accounts look bad the company is obviously a duffer, if they look good then they look 'too good'... It's almost as though you are shaping your perception of the evidence to confirm your existing prejudice.

By the way in case you were wondering 'profit' is where your company costs less to operate than it brings in in revenue.

The problem I have with the Lidar belief is that people do not have lidar and yet we are capable of driving. If AI via neural nets is any good, and the results with GO suggest that it is super human in many ways, it is hard to see why it can’t drive a car better than a human.

Not if you know a little neuroscience and understand the difference between a simple highly ordered environment with total adherence to a completely transparent rule set which gives rise to an astronomic number of permutations and the real world.

[PeterGray]

The problem I have with the Lidar belief is that people do not have lidar and yet we are capable of driving.

Humans also have a lot of other things that no driving assist, or whatever you want to call it, has or is likely have anytime in the foreseeable future. Assisted driving systems are an attempt to replace human abilities with artificial ones - so arguing that something is good or bad for them on the basis of whether humans have it or not is a bit of a non argument.

And whilst I'd agree that caution is needed with all company accounts - why pick on VW and not apparently Tesla for that critical approach? Given their highly flaky CEO I would have though the opposite was required?

[odysseus2000]

The problem I have with the Lidar belief is that people do not have lidar and yet we are capable of driving.

Humans also have a lot of other things that no driving assist, or whatever you want to call it, has or is likely have anytime in the foreseeable future. Assisted driving systems are an attempt to replace human abilities with artificial ones - so arguing that something is good or bad for them on the basis of whether humans have it or not is a bit of a non argument.

And whilst I'd agree that caution is needed with all company accounts - why pick on VW and not apparently Tesla for that critical approach? Given their highly flaky CEO I would have though the opposite was required?

What exactly do humans have that can not be replaced by a driving machine?

This question is at the heart of whether AI will ever replace humans in many applications such as driving.

Regarding VW, we should not forget that they conspired in a world wide campaign of lies & deceit for financial gain by deliberately falsifying the emissions from their diesel cars.

Regards,

[redsturgeon]

Regarding VW, we should not forget that they conspired in a world wide campaign of lies & deceit for financial gain by deliberately falsifying the emissions from their diesel cars.

Regards,

But of course we can forget all of Elon's little faux pas...because?

John

[odysseus2000]

Regarding VW, we should not forget that they conspired in a world wide campaign of lies & deceit for financial gain by deliberately falsifying the emissions from their diesel cars.

Regards,

But of course we can forget all of Elon's little faux pas...because?

John

The price of freedom is endless vigelence.

None of us are angels, everyone in business is encouraged to be competitive, to try & get business & so long as that is done in legal methods then ever part of the system supports them, because we all adhere to caveat emptor. It is incumbent upon us to do our own research before buying & to have some confidence that although the sellers will always talk up their product, that any facts they quote are correct.

VW in quoting facts they knew to be wrong broke that covenant & were heavily fined.

Have Tesla broken a similar covenant? Yes, & they have been fined for their misleading description of their self drive system & have had troubles with Chinese customs for mislabelling cars & no doubt lots of other things have been enough to put off some buyers forever, just as happens with e.g. Apple products.

The investment question is are there enough folk who want an electric car to buy a Tesla. Current estimates say no & before long we should get first quarter results to give us a hopefully accurate number. We already know that Audi & Mercedes sales have been down over 10%, showing either weakness or loss of market share.

The investment case for Tesla is about whether folk will buy their cars, batteries, storage solutions etc. Buying decisions tend to have a large emotional content & so we will find out how folk who need any of these things feel about buying Tesla.

Regards,

[redsturgeon]

Buying decisions tend to have a large emotional content & so we will find out how folk who need any of these things feel about buying Tesla.

Regards,

Are you talking about buying Tesla products or Tesla shares here?

John

[BobbyD]

What exactly do humans have that can not be replaced by a driving machine?

The most complex known structure in the universe.

Why would you try and replace human cognition by replicating its processes with a substitute which has entirely different strengths and weaknesses?

Why would you use the flawed human driver as your model for an autonomous driver?

Can we agree that the ability to be really good at Go isn't a valid predictor of whether or not you will be capable of driving a car in the wild yet?

[odysseus2000]

Buying decisions tend to have a large emotional content & so we will find out how folk who need any of these things feel about buying Tesla.

Regards,

Are you talking about buying Tesla products or Tesla shares here?

John

Both.

If folk will not buy Tesla products then there is no investment case.

If folk buy Tesla products there is a potential investment case.

Regards,

[odysseus2000]

What exactly do humans have that can not be replaced by a driving machine?

The most complex known structure in the universe.

Why would you try and replace human cognition by replicating its processes with a substitute which has entirely different strengths and weaknesses?

Why would you use the flawed human driver as your model for an autonomous driver?

Can we agree that the ability to be really good at Go isn't a valid predictor of whether or not you will be capable of driving a car in the wild yet?

We do not know how AI will develop, all we have are some data points, one of which is that AI experts said AI could not bear GO players for decades, but now AI can beat many human GO players simultaneously.

Whether this technology will make better car drivers than humans we do not know. Has AI reached its limit or will its capability expand significantly from here?

Regards,

[BobbyD]

We do not know how AI will develop, all we have are some data points, one of which is that AI experts said AI could not bear GO players for decades, but now AI can beat many human GO players simultaneously.

Whilst flawed in its own ways that isn't the argument you were making earlier.

The problem I have with the Lidar belief is that people do not have lidar and yet we are capable of driving. If AI via neural nets is any good, and the results with GO suggest that it is super human in many ways, it is hard to see why it can’t drive a car better than a human.

Not if you know a little neuroscience and understand the difference between a simple highly ordered environment with total adherence to a completely transparent rule set which gives rise to an astronomic number of permutations and the real world.

Are you now saying not that it is hard to understand why an AI couldn't drive a car better than humans without LIDAR to we can't rule out the possibility that AI might be able to drive a car better than humans without LIDAR?

[odysseus2000]

BobbyD

Are you now saying not that it is hard to understand why an AI couldn't drive a car better than humans without LIDAR to we can't rule out the possibility that AI might be able to drive a car better than humans without LIDAR?

Both

[Howard]

It is difficult to decide what is the best strategy for Tesla.

I posted the VW results not to praise VW because they did commit a deception on a major scale. In a way they were like Elon Musk, their clever method of cheating the tests by sophisticated software was just too clever by half. And they were rightly penalised for it in no uncertain terms.

Is the new VW a better and wiser company? Time will tell. Do they now make superbly engineered cars which meet the requirements of millions of people? I think the answer is yes. Do they have the resources to compete with Tesla in making volume EVs? We don't know yet, but my guess is that they will be successful.

To give Tesla their due, they have shown it is possible to manufacture EVs with a reasonable range. Totally suitable for a second car. But will they be able to ramp up sales to match their production capacity?

To break into the mass premium market in Europe (and probably China) manufacturers need to make EVs at a starting price of around £20 - £25k for a base model. Then they can offer more luxurious versions at higher prices. This will open up a very large second car market.

I don't think Tesla will be that successful selling a really basic model 3 for around £35k in the UK (or Europe). Buyers of this value of car would expect leather (or "vegan" leather) seats and a "luxury" interior. Who wants to pay this amount of money and look a cheapskate when your friends get in the car?

My point about Autopilot is that it doesn't deliver any real value to existing customers now. It is just a glorified cruise control with lane switching.

VW have a huge advantage in that they are making profits on a large scale. Their challenge is to bring EV drive trains into a quality product. Tesla's challenge is to develop a quality product for around 70% of its current selling price and make a profit!

regards

Howard

[BobbyD]

It is difficult to decide what is the best strategy for Tesla.

I'm not so sure, I just think maybe it is too late. Tesla had the playground all to itself for years, it should now be seeing its long term plans bearing fruit as others enter the arena with their first serious gen efforts but they don't appear to have consolidated advantages in the technology, design or production of electric vehicles. Too busy sitting on the swings smoking spliff.

I posted the VW results not to praise VW because they did commit a deception on a major scale. In a way they were like Elon Musk, their clever method of cheating the tests by sophisticated software was just too clever by half. And they were rightly penalised for it in no uncertain terms.

This might be one of those highly ironic unforeseen consequence moments where a little diesel emission cheating ends up being the best thing that could have possibly happened for electric cars. It might also prove to be the best thing which could have possibly happened for VW.

If nothing else the way VW rode Dieselgate shows a certain robustness. It should have been devastating and just before a significant contraction in the market. Instead VW are selling more in to that shrinking market whilst re-configuring the company around the new e-model. The behaviour may have been bad, but the fallout has been very well managed.

IDo they have the resources to compete with Tesla in making volume EVs? We don't know yet, but my guess is that they will be successful.

VW may fail or succeed, but they unquestionably have the financial, technical, production and marketing resources required. Whether or not they use them effectively to compete against tesla and others is open to debate, but it's also where I think their real advantage comes in. It's entirely possible that Musk is a greater genius, a devastating iconoclast, and more fun to share a beer and a joint with, but I know which management team I want running my car company. Sprechen Sie Deutsch?

[odysseus2000]

Howard
VW have a huge advantage in that they are making profits on a large scale. Their challenge is to bring EV drive trains into a quality product. Tesla's challenge is to develop a quality product for around 70% of its current selling price and make a profit!

VW have the huge trouble of a large legacy business that is about to collapse.

Tesla success of failure depends on whether it can sell what it makes: Cars, Batteries, storage and if it can out innovate competitors.

We will have to wait and see.

Regards,