Dr. Elon and Mr. Musk: Tesla's Chaotic Robotaxi Pivot

Forbes

The impulsive billionaire calmed investors with plans for cheaper EVs that he previously backburnered. Then he muddled the story by cutting its fast-growing EV charging service team as he prioritizes an autonomous ride business that doesn’t appear close to being ready.  Read the full story on Forbes: https://www.forbes.com/sites/alanohnsman/2024/05/01/dr-elon-and-mr-musk-teslas-chaotic-robotaxi-pivot/?sh=34dab32e490b  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00 Here's your Forbes daily briefing for Friday, May 3rd.

00:05 Today on Forbes, Dr. Elon and Mr. Musk, Tesla's chaotic robo-taxi pivot.

00:13 There's a Dr. Elon and Mr. Musk aspect to Tesla's CEO these days.

00:18 When he speaks, will it be the old-school tech nerd full of big, world-changing ideas?

00:23 Or the mercurial billionaire making whiplash pivots with a multi-million dollar business?

00:29 Dr. Elon successfully lands reusable rockets on barges and promises a sub-$30,000 electric

00:35 car to help the masses fight climate change.

00:39 Mr. Musk gets condemned by the White House for spreading anti-Semitic conspiracy theories

00:43 on a social media platform he overpaid for and prioritizes a $100,000 cyber truck that's

00:49 recalled five months after launch.

00:52 It was mostly the former when Tesla's CEO pacified jittery investors and cheered equity

00:57 analysts on last week's earning call with modified plans for cheaper electric vehicles

01:01 first promised in 2006 but not yet delivered.

01:05 This was followed by a surprise trip to Beijing to gain approval to market the company's driver

01:09 assistance features to Chinese consumers.

01:12 Then, after laying off 10% of the company, including key executives, last week, he inexplicably

01:18 expanded the job cuts further by slashing the team running its supercharger network

01:22 — a bright spot amid otherwise dismal first quarter results — and dismissing the head

01:27 of new products.

01:29 The dissonant moves seem to underscore Musk's goal of pivoting the world's benchmark EV

01:34 brand to a company selling robo-taxi rides instead of cars, a recurring topic for years

01:39 that's gained intensity of late.

01:41 It's a risky ploy as it's far from clear Tesla can pull that off or if it will generate the

01:46 financial benefits he anticipates, especially since it doesn't appear Tesla has done fully

01:51 autonomous testing on the level of Waymo or Cruise.

01:55 On the April 23rd earnings call, he said, "The way to think of Tesla is almost entirely

02:00 in terms of solving autonomy and being able to turn on that autonomy for a gigantic fleet.

02:06 If you value Tesla as just an auto company, fundamentally it's the wrong framework.

02:11 If somebody doesn't believe Tesla is going to solve autonomy, I think they should not

02:14 be an investor in the company.

02:16 But we will and we are."

02:20 Musk's track record suggests otherwise.

02:23 Tesla's current autopilot and full self-driving features have been linked to 13 fatal crashes.

02:29 Despite the features' names, the company warns customers to monitor their vehicles at all

02:33 times because they aren't truly autonomous.

02:38 Last week, the National Highway Traffic Safety Administration excoriated Tesla for "insufficient"

02:44 steps taken to ensure that drivers pay attention while using those features.

02:48 And it went on to say, compared to driver assistance software offered by rival carmakers,

02:53 Tesla is a "outlier" in its approach, "mismatching a weak driver engagement system with autopilot's

02:59 permissive operating capabilities."

03:03 Fully autonomous robotaxis are even tougher.

03:06 Alphabet Inc.'s Waymo has poured billions into the development of fully self-driving

03:11 technology for over a decade and is just now ramping up its commercial expansion to a fourth

03:16 U.S. city after successful startups in Phoenix, San Francisco, and Los Angeles.

03:21 Amazon's Zoox unit plans to begin operating commercial robotaxi service in Las Vegas this

03:26 year.

03:28 Without similar pilot or test programs, Tesla appears undeniably far behind.

03:35 Musk has long been hailed as a tech visionary for disrupting the auto and aerospace industries

03:39 with profitable electric cars and reusable rockets.

03:42 Yet for every breakthrough like Tesla's top-selling Model Y or SpaceX's satellite-based Starlink

03:48 internet system, there have been failures and flops, including plans for EV battery

03:53 swap stations, solar roofs, hyperloops, an autonomous robot that ended up being a dancer

03:59 in a robot suit, and, it appears, the new Cybertruck.

04:04 The disastrous $44 billion Twitter acquisition, in which Fidelity has marked down the value

04:09 of its stake by 71%, is just one of a number of confusing business decisions Musk has made

04:14 in the last year.

04:16 Another is plowing billions into the Cybertruck instead of prioritizing a lower-cost, mass-market

04:21 EV, which he has promised investors for years.

04:25 Slashing Tesla's supercharger team is another perplexing move.

04:29 The unit helped boost the company's service revenue jump 25% to $451 million in the first

04:36 quarter, per an SEC filing, after Musk opened the network to non-Tesla EVs this year.

04:44 For full coverage, check out Alan Onsman's piece on Forbes.com.

04:49 This is Kieran Meadows from Forbes.

04:51 Thanks for tuning in.

04:53 [MUSIC PLAYING]

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