This is really good. I realize that the author can't go on forever about every topic, but regarding the reasons for the protests, he didn't mention (1) All of the investigations of Musk and his businesses that were likely neutered via the $300 million contributed plus DOGE, (2) The federal contracts Musk's businesses are corruptly in a position to get going forward, and (3) The actual work of DOGE to destroy things like USAID, cancer and medical research, etc.
As to the absurdity of $TSLA's valuation, I think it should be mentioned that there is over a $1 trillion value put on robotaxis and Optimus - businesses that don't exist and don't generate any revenue much less any profits, much less the outsized $100+ billion per year in profits necessary to justify the $1 trillion valuation. But guess how much Tesla spends annually on R&D? $4.5 billion. That's all. Which happens to be about half as much as GM and Ford both spend per year (nearly $9 billion per year).
So let's assume half of the $4.5 billion is spent on robotaxis and Optimus. Probably high, but let's go with it. Do actual investors actually believe that Tesla is in the process of, and very close to, building a multi-trillion business based on $2.25 billion per year in R&D spending?
I wouldn't even read this article - the title betrayed that it would be a waste. When Musk gets into the fray, it's always with a new round of stock-pumping rather than execution.
Just looking at the stats, Tesla is close to the tipping point, and everyone sane knows that FSD can't be the answer this year or next year, and that a useful humanoid robot is some years further away.
To me, the reappearance of "angry Elon" would be sell signal.
Vay have remote taxis in Las Vagas. The operator drives the car to the customer, who then takes control. Fetch have a similar operation in Milton Keynes, UK.
Since you are a lawyer, may I ask a question or two about Tesla in Austin?
Both Waymo and Cruise had Level 4 permits from California's DMV. Tesla have nothing.
What may they do with their ADAS cars?
Please see Texas Law 85(R) SB 2205 "Operation of Automated Motor Vehicles"
Sec.A545.451.DEFINITIONS:
(1)"Automated driving system" means hardware and software that, when installed on a motor vehicle and engaged, are
collectively capable of performing, without any intervention or supervision by a human operator:
(A)all aspects of the entire dynamic driving task for the vehicle on a sustained basis; and
(B)any fallback maneuvers necessary to respond to a failure of the system"
That sounds like the autonomous vehicle cannot operate with a driver in the car, but...
4) "Human operator" means a natural person in an automated motor vehicle who controls the entire dynamic driving task..
If the "human operator/natural person in an automated vehicle" does not control "ALL aspects of the entire dynamic driving task for the vehicle on a sustained basis" the operator may prehaps intervene?
Musk said the area will be geofenced, so taking some of the DD task out of the hands of the
Thanks, Thomas. Granting the benefit of the doubt is probably a good default position to have in life. As it appears you know, MaxedOutMama agrees with you.
Thanks for your response and the links, Lawrence. I think Tesla are planning Full Sell Obsfucation. It's already underway.
Forbes infer Tesla's Californian permit application suggests Tesla may have autonomy, but are being conservative. It was Musk's intent to gain that suggestion, now often repeated or paraphrased. Made possible because DMV permits allow a Cheshire Cat's grin.
1) Along with 30 other applicants, Tesla now have a Californian DMV Autonomous Testing (With Driver) permit. A permit is required for L2 cars if "the vehicle can control steering and acceleration/deceleration". The permit aggrandies what can be an Uber car with ADAS.
2) Driverless cars must meet SAE L3, L4 or L5. They also begin with Autonomous Testing (With Driver) permit, so handy camouflage.
In contrast, Austin is a free-for-all. Texas autonomous law ( unlike NHTSA and DMV) does not mention SAE levels, nor weather restrictions. The car may be driven without a driver in the seat. Control can exist outside of the vehicle, allowing teledriving.
Only on highways must the car meet Federal autonomy laws.
"Responsibly Ushering in Autonomous Vehicles in Texas" discusses the topic.
With newer cameras and radar, there need not be mayhem. Software could be modified for the limited number of repeatedly trolled routes, teleoperated or augmented with
locations beacons and cameras. I think it will be easy for Musk to spin success for lidar-free autonomy, and once again, sell the prospect of L5 to his flock.
Would it matter if revealed as L2 puffery?
I doubt it. Musk survived the bathos of the LA Convention Center tunnel without even blinking.
You are, no doubt, acquainted with the renowned aphorism often—as it were—attributed to Einstein: “Insanity is doing the same thing over and over again and expecting different results.” In all earnestness, however, there exists no verifiable evidence that he ever articulated or recorded such a statement. In fact, the earliest documented appearance of this phrase dates to 1981, when it was featured in a publication by Narcotics Anonymous, employed to depict the repetitive behaviours intrinsic to addiction. Over the ensuing years, this saying gained widespread currency and was erroneously ascribed to Einstein.
Nonetheless, the adage remains strikingly pertinent to our present discussion: virtually any pronouncement made by those overly sanguine about Tesla verges, by definition, on madness. To persist in opposing it, given these very premises, would be irrational. Furthermore, when one considers the precarious state of the American political arena, one is confronted with a most revolting recipe indeed. At this juncture, your country appears to be beset by a dual absurdity—Tesla on one side and your government on the other.
Permit me to expound further. No preceding American President would have broached the subject of a debt default. None would have demeaned President Zelensky within the hallowed confines of the Oval Office, nor would any have publicly kowtowed to Putin. This is not because such actions are inherently illegal or unconstitutional, but rather because they are so blatantly indefensible as to be utterly unthinkable. Yet, the very notion of “unthinkable” has lost all meaning in the current climate. America’s rather unconventional system of public administration now sees thousands of senior public servants directly appointed by the President. As a consequence, many honourable and law-abiding civil servants are presently being dismissed or marginalised.
As for trump-traitor, he is nothing short of an exceedingly dishonest and inept businessman—renowned for his habitual defaults on his creditors. He appears utterly incapable of grasping why a sovereign default should be deemed any different. Moreover, he is encircled by individuals who are either equally uninformed or fully servile, thereby precluding any genuine honest critique. Thus, debt default remains firmly ensconced on his agenda, right alongside tariffs, as the crude and simplistic solution to multifarious, complex problems. In such an environment, what do you expect?
Your comments are always so eloquent and insightful, and always my favorites.
The broaching of a potential default on US debt was the subject of a wonderful essay in a recent edition of Grant’s Interest Rate Observer. LMK if you would like me to send you a pdf (and give me an email address I can use.)
I am hard at work on an application for Italian citizenship. Not that Italy’s situation is so much better, but the food, art, and sense of community are certainly better.
Bravo! I am a dual citizen of the United States and the Republic of Ireland. There are definitely advantages to having a passport from an EU country. Rome is one of my favorite cities in the world. Walking down a street in Rome and coming across ruins of Ancient Rome can’t help but impress one with the history of the city. The cuisine is also fantastic.
I was in the habit of perusing Grant’s Interest Rate Observer with considerable interest. Indeed, do be so kind as to share his essay—grazie. Concerning your application for Italian citizenship, please do let me know if I may be of any assistance; my mother has devoted her entire career to the Foreign Office, and in consequence, I have acquired a modicum of expertise on the matter.
They may be doing this to troll Musk, but regardless, Optimus isn’t going to have a monopoly and Tesla will never be more than a niche player in robotics.
My take on Tesla (up $17 today) is that capitalism will eventually kill it. Musk knows that too - hence his foray into politics hoping to kill capitalism.
Thanks for the post. If Higgins had focused on Musk's ability to puff the stock price he may have had something, but now that we have seen Musk's management style (waving chain saws and bullying employees, for example) you would think that would give Higgins pause. Better readers than I have pointed out the Tesla-specific flaws in Higgins' article, but there are also a number of macro issues (caused in part by Musk's donations) that HIggins ignores. Sigh.
Btw, I did watch that clip carefully of Musk's hand gesture, and it clearly wasn't a Nazi salute. It was Musk being spastic. BUT the misstep in back AfD in Germany was very real and very disastrous. For every one adherent it gained, ten were lost. The European sales results show that the impact wasn't limited to Germany.
Backing AfD wasn't a misstep, he was doing exactly what he wanted and believes in.
As to the salute, how was it clearly not a Nazi salute? Even if it was a double 'mistaken' movement, surely someone so much in the public eye and informed about PR as the CEO of multiple large companies he would understand what he was risking doing that. I think the simplest solution is most likely...after helping Trump win the election he felt invincible and was expressing himself, even if not a direct salute it was close enough to be a dog whistle.
It's disgraceful, but certainly on brand for Errol Musk. I'm not altogether ready to have the sins of the father visited on the son. That said, the son has a weird affection for Putin. I speculate that Putin has something on Musk.
Great comments. Under Scrutiny I would have added all the departments investigating him that Musk used the cover of DOGE to eliminate, not to mention enriching himself..Canceling the FAA $2.4B Verizon contract in favor of Starlink is one example. He hasn't been scrutinized enough.
I think you should have also reminded everyone that both Tim Higgins and Al Root, another fawning WSJ reporter, effectively work for the Murdoch family who have a seat on Tesla’s board and were granted options in Tesla.
Bernhard, certainly true, but The Wall Street Journal has had some very hard-hitting pieces aimed at Musk. The work of Emily Glazer, in that respect, has been superb and admirable. So, I tend to doubt the orders are coming from on high.
This is really good. I realize that the author can't go on forever about every topic, but regarding the reasons for the protests, he didn't mention (1) All of the investigations of Musk and his businesses that were likely neutered via the $300 million contributed plus DOGE, (2) The federal contracts Musk's businesses are corruptly in a position to get going forward, and (3) The actual work of DOGE to destroy things like USAID, cancer and medical research, etc.
As to the absurdity of $TSLA's valuation, I think it should be mentioned that there is over a $1 trillion value put on robotaxis and Optimus - businesses that don't exist and don't generate any revenue much less any profits, much less the outsized $100+ billion per year in profits necessary to justify the $1 trillion valuation. But guess how much Tesla spends annually on R&D? $4.5 billion. That's all. Which happens to be about half as much as GM and Ford both spend per year (nearly $9 billion per year).
So let's assume half of the $4.5 billion is spent on robotaxis and Optimus. Probably high, but let's go with it. Do actual investors actually believe that Tesla is in the process of, and very close to, building a multi-trillion business based on $2.25 billion per year in R&D spending?
Three truly important points, thank you. Were there room enough and time…
As always, thank you for your fantastic work. We will be right in the end.
Yes, we will. But, can someone tell me, will “the end” come before my end?
TBD!
I wouldn't even read this article - the title betrayed that it would be a waste. When Musk gets into the fray, it's always with a new round of stock-pumping rather than execution.
Just looking at the stats, Tesla is close to the tipping point, and everyone sane knows that FSD can't be the answer this year or next year, and that a useful humanoid robot is some years further away.
To me, the reappearance of "angry Elon" would be sell signal.
The only reason I can imagine for why the beat goes on is a belief that, no matter what, or in what manner, Trump will find a way to prop up Musk.
Re Robotaxis.
Vay have remote taxis in Las Vagas. The operator drives the car to the customer, who then takes control. Fetch have a similar operation in Milton Keynes, UK.
Since you are a lawyer, may I ask a question or two about Tesla in Austin?
Both Waymo and Cruise had Level 4 permits from California's DMV. Tesla have nothing.
What may they do with their ADAS cars?
Please see Texas Law 85(R) SB 2205 "Operation of Automated Motor Vehicles"
Sec.A545.451.DEFINITIONS:
(1)"Automated driving system" means hardware and software that, when installed on a motor vehicle and engaged, are
collectively capable of performing, without any intervention or supervision by a human operator:
(A)all aspects of the entire dynamic driving task for the vehicle on a sustained basis; and
(B)any fallback maneuvers necessary to respond to a failure of the system"
That sounds like the autonomous vehicle cannot operate with a driver in the car, but...
4) "Human operator" means a natural person in an automated motor vehicle who controls the entire dynamic driving task..
If the "human operator/natural person in an automated vehicle" does not control "ALL aspects of the entire dynamic driving task for the vehicle on a sustained basis" the operator may prehaps intervene?
Musk said the area will be geofenced, so taking some of the DD task out of the hands of the
human operator. Thoughts?
Thanks for the text of the Texas law. I can't say definitively what happens now. The law is new and untested.
Here are some interesting stories about the impending Austin experiment:
https://mashable.com/article/tesla-robotaxi-austin-texas-unprepared-week-before-launch
https://insideevs.com/news/760863/tesla-hiring-humans-to-control-robotaxis/
It will be fascinating to watch this play out.
I also didn't see Musk's salute as literally Nazi. If exuberance, displays far too much self-importance.
It may be unfair to label Musk as a Nazi, but does balance the books a little.
Thanks, Thomas. Granting the benefit of the doubt is probably a good default position to have in life. As it appears you know, MaxedOutMama agrees with you.
Thanks for your response and the links, Lawrence. I think Tesla are planning Full Sell Obsfucation. It's already underway.
Forbes infer Tesla's Californian permit application suggests Tesla may have autonomy, but are being conservative. It was Musk's intent to gain that suggestion, now often repeated or paraphrased. Made possible because DMV permits allow a Cheshire Cat's grin.
1) Along with 30 other applicants, Tesla now have a Californian DMV Autonomous Testing (With Driver) permit. A permit is required for L2 cars if "the vehicle can control steering and acceleration/deceleration". The permit aggrandies what can be an Uber car with ADAS.
2) Driverless cars must meet SAE L3, L4 or L5. They also begin with Autonomous Testing (With Driver) permit, so handy camouflage.
In contrast, Austin is a free-for-all. Texas autonomous law ( unlike NHTSA and DMV) does not mention SAE levels, nor weather restrictions. The car may be driven without a driver in the seat. Control can exist outside of the vehicle, allowing teledriving.
Only on highways must the car meet Federal autonomy laws.
"Responsibly Ushering in Autonomous Vehicles in Texas" discusses the topic.
https://www.texaspolicy.com/wp-content/uploads/2024/03/2024-03-Autonomous-Vehicles-Texas-Dunmoyer-FINAL.pdf
With newer cameras and radar, there need not be mayhem. Software could be modified for the limited number of repeatedly trolled routes, teleoperated or augmented with
locations beacons and cameras. I think it will be easy for Musk to spin success for lidar-free autonomy, and once again, sell the prospect of L5 to his flock.
Would it matter if revealed as L2 puffery?
I doubt it. Musk survived the bathos of the LA Convention Center tunnel without even blinking.
My dear Lorenzo,
You are, no doubt, acquainted with the renowned aphorism often—as it were—attributed to Einstein: “Insanity is doing the same thing over and over again and expecting different results.” In all earnestness, however, there exists no verifiable evidence that he ever articulated or recorded such a statement. In fact, the earliest documented appearance of this phrase dates to 1981, when it was featured in a publication by Narcotics Anonymous, employed to depict the repetitive behaviours intrinsic to addiction. Over the ensuing years, this saying gained widespread currency and was erroneously ascribed to Einstein.
Nonetheless, the adage remains strikingly pertinent to our present discussion: virtually any pronouncement made by those overly sanguine about Tesla verges, by definition, on madness. To persist in opposing it, given these very premises, would be irrational. Furthermore, when one considers the precarious state of the American political arena, one is confronted with a most revolting recipe indeed. At this juncture, your country appears to be beset by a dual absurdity—Tesla on one side and your government on the other.
Permit me to expound further. No preceding American President would have broached the subject of a debt default. None would have demeaned President Zelensky within the hallowed confines of the Oval Office, nor would any have publicly kowtowed to Putin. This is not because such actions are inherently illegal or unconstitutional, but rather because they are so blatantly indefensible as to be utterly unthinkable. Yet, the very notion of “unthinkable” has lost all meaning in the current climate. America’s rather unconventional system of public administration now sees thousands of senior public servants directly appointed by the President. As a consequence, many honourable and law-abiding civil servants are presently being dismissed or marginalised.
As for trump-traitor, he is nothing short of an exceedingly dishonest and inept businessman—renowned for his habitual defaults on his creditors. He appears utterly incapable of grasping why a sovereign default should be deemed any different. Moreover, he is encircled by individuals who are either equally uninformed or fully servile, thereby precluding any genuine honest critique. Thus, debt default remains firmly ensconced on his agenda, right alongside tariffs, as the crude and simplistic solution to multifarious, complex problems. In such an environment, what do you expect?
Your comments are always so eloquent and insightful, and always my favorites.
The broaching of a potential default on US debt was the subject of a wonderful essay in a recent edition of Grant’s Interest Rate Observer. LMK if you would like me to send you a pdf (and give me an email address I can use.)
I am hard at work on an application for Italian citizenship. Not that Italy’s situation is so much better, but the food, art, and sense of community are certainly better.
Bravo! I am a dual citizen of the United States and the Republic of Ireland. There are definitely advantages to having a passport from an EU country. Rome is one of my favorite cities in the world. Walking down a street in Rome and coming across ruins of Ancient Rome can’t help but impress one with the history of the city. The cuisine is also fantastic.
I was in the habit of perusing Grant’s Interest Rate Observer with considerable interest. Indeed, do be so kind as to share his essay—grazie. Concerning your application for Italian citizenship, please do let me know if I may be of any assistance; my mother has devoted her entire career to the Foreign Office, and in consequence, I have acquired a modicum of expertise on the matter.
what email address can I use?
I have sent you a PM :-)
They may be doing this to troll Musk, but regardless, Optimus isn’t going to have a monopoly and Tesla will never be more than a niche player in robotics.
https://interestingengineering.com/innovation/hyundai-to-deploy-humanoid-atlas-robots
My take on Tesla (up $17 today) is that capitalism will eventually kill it. Musk knows that too - hence his foray into politics hoping to kill capitalism.
Interesting news (and timing) from Hyundai, thank you.
Trump and Musk are certainly already doing a splendid job of killing capitalism.
The Optimus stuff is just such a completely stupid joke.
My belief is that the major factor propping up the TSLA share price is the belief that Trump will protect Musk no matter what.
Thanks for the post. If Higgins had focused on Musk's ability to puff the stock price he may have had something, but now that we have seen Musk's management style (waving chain saws and bullying employees, for example) you would think that would give Higgins pause. Better readers than I have pointed out the Tesla-specific flaws in Higgins' article, but there are also a number of macro issues (caused in part by Musk's donations) that HIggins ignores. Sigh.
Higgins did note that Musk’s response to Tesla’s operational troubles is “stock price, Bro!” So, I suppose I will at least give him that.
Great comment, thanks.
It’s a coordinated pump and it works.
Btw, I did watch that clip carefully of Musk's hand gesture, and it clearly wasn't a Nazi salute. It was Musk being spastic. BUT the misstep in back AfD in Germany was very real and very disastrous. For every one adherent it gained, ten were lost. The European sales results show that the impact wasn't limited to Germany.
Backing AfD wasn't a misstep, he was doing exactly what he wanted and believes in.
As to the salute, how was it clearly not a Nazi salute? Even if it was a double 'mistaken' movement, surely someone so much in the public eye and informed about PR as the CEO of multiple large companies he would understand what he was risking doing that. I think the simplest solution is most likely...after helping Trump win the election he felt invincible and was expressing himself, even if not a direct salute it was close enough to be a dog whistle.
MOM below has her doubts, and I respect her. But I have my doubts, too…
Well, have a look where Errol Musk is right now, who he's visiting there and what he's saying. Then, maybe reconsider.
It's disgraceful, but certainly on brand for Errol Musk. I'm not altogether ready to have the sins of the father visited on the son. That said, the son has a weird affection for Putin. I speculate that Putin has something on Musk.
In any case, I missed Musk's violent protests against his father's politics.
I was, perhaps, too ready to think the worst of Musk. (But I think I’ve earned that right!)
Thanks for your (as always) thoughtful comment.
Great comments. Under Scrutiny I would have added all the departments investigating him that Musk used the cover of DOGE to eliminate, not to mention enriching himself..Canceling the FAA $2.4B Verizon contract in favor of Starlink is one example. He hasn't been scrutinized enough.
I wish I had mentioned that!
MS
I think you should have also reminded everyone that both Tim Higgins and Al Root, another fawning WSJ reporter, effectively work for the Murdoch family who have a seat on Tesla’s board and were granted options in Tesla.
Always, always follow the money!
Bernhard, certainly true, but The Wall Street Journal has had some very hard-hitting pieces aimed at Musk. The work of Emily Glazer, in that respect, has been superb and admirable. So, I tend to doubt the orders are coming from on high.