In short
Better Offline - Episode Summary: Enron Musk Ft. Ed Niedermeyer
Podcast Overview Better Offline is a weekly podcast that critically examines the tech industry's impact on society, focusing on the manipulation and growth-focused mindset of its elite members. Hosted by Ed Zitron, the show features narrative storytelling, interviews, and panel discussions aimed at illuminating the complexities of the tech world.
Episode Details
- Title: Enron Musk Ft. Ed Niedermeyer
- Release Date: April 2024
- Guest: Ed Niedermeyer, author of *Ludicrous: The Unvarnished Story of Tesla Motors*
- Key Topic: Analysis of Tesla's Autopilot and Full-Self-Driving software in light of a critical NHTSA report.
Key Themes and Discussions
NHTSA Report Findings
- The National Highway Traffic Safety Administration (NHTSA) found that Tesla's Autopilot and Full-Self-Driving systems create a "critical safety gap," leading to avoidable crashes, injuries, and fatalities.
- The report attributed at least 467 collisions, resulting in 13 deaths and 49 injuries, to these systems during the period from January 2018 to August 2023.
- Autopilot is compared to basic cruise control, while Full-Self-Driving is described as an overhyped system that fails to deliver on its promises.
Perception vs. Reality
- Ed Niedermeyer discusses how Tesla's stock and public perception have surpassed the reality of its operational effectiveness.
- The gap between Tesla as a stock and Tesla as a functioning car company has widened, with significant issues in product development and R&D investment.
- Musk's focus on AI and ambitious claims have distracted from addressing fundamental automotive problems.
Elon Musk's Leadership and Decision-Making
- Niedermeyer criticizes Musk's tendencies to prioritize perception over operational reality, suggesting that he has become complacent and out of touch with the realities of running a car company.
- Musk's recent layoffs of the Supercharger team, despite Tesla’s cash reserves, highlight his approach to cutting costs without addressing underlying business challenges.
Historical Context of Tesla's Safety Issues
- The podcast traces a history of fatal crashes involving Tesla's Autopilot systems, indicating a longstanding issue with how these technologies are marketed and perceived by consumers.
- Previous investigations by the NTSB and the subsequent NHTSA recall are discussed, emphasizing a failure to address safety concerns until public and legal pressures mounted.
The Role of Regulation
- There is considerable debate on the effectiveness of regulatory bodies like the NHTSA in holding Tesla accountable.
- Niedermeyer expresses skepticism towards regulatory responses and highlights the historical slow pace of the NHTSA in addressing safety defects.
Future Implications
- The discussion contemplates the potential consequences for Tesla if Autopilot were to be significantly restricted or removed, including the impact on sales and profit margins.
- The episode raises questions about the ethical implications of Musk's business strategies, suggesting that the current situation may lead to broader litigation risks for Tesla.
Closing Thoughts
- The podcast ends on a cautionary note regarding public trust in Musk and Tesla, emphasizing the need for critical evaluation of Musk's narratives and the broader implications of his actions for society.
- Niedermeyer warns that Elon Musk's approach could set dangerous precedents in the tech industry, urging for more robust accountability mechanisms.
Conclusion This episode of Better Offline provides a detailed analysis of the controversies surrounding Tesla's Autopilot and Full-Self-Driving technologies, the implications of regulatory oversight, and a critique of Elon Musk's leadership style. It serves as a reminder of the critical intersection between technology, safety, and ethics in the modern automotive landscape.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Transcript
Automatic transcript. May contain errors.0:00This is an iHeart Podcast.
0:54We'll be right back.
1:00at washablesofas.com. Authors are subject to change, and certain restrictions may apply. Parking shouldn't slow you down. ParkWiz gives every driver a shortcut. Book ahead, save up to 50%, and skip the hassle of circling the block. Park smarter, park faster. ParkWiz. Download the ParkWiz app today and save every time you park. In business, they say you can have better, cheaper, or faster, but you only get to pick two. What if you could have all three at the same time? That's exactly what Cohere, Thomson Reuters, and Specialized Bikes have since they upgraded to the next generation of the cloud.
1:35Oracle Cloud Infrastructure. OCI is the blazing fast platform for your infrastructure, database, application development, and AI needs, where you can run any workload in a high availability, consistently high performance environment, and spend less than you would with other clouds. How is it faster? OCI's block storage gives you more operations per second. Cheaper? OCI costs up to 50 % less for computing, 70 % less for storage, and 80 % less for networking. Better? In test after test, OCI customers report lower latency and higher bandwidth versus other clouds. This is the cloud built for AI and all your biggest workloads.
2:17Right now, with zero commitment, try OCI for free. Head to oracle.com slash strategic. That's oracle.com slash strategic. Call Zone Media Wake up everybody, I've got a new podcast. This is Better Offline and I'm your host, Ed Zitron.
2:45Better Offline Last week, the National Highway Traffic Safety Administration released a damning report about Tesla's autopilot and its full self-driving systems, which the NHTSA 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 sexy version of cruise control, keeping your car in 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.
3:37The report, which covers the period between January 2018 and August 2023, described a critical safety gap, to quote CNBC's Laura Kolodny, in the autopilot system, which contributed to at least 467 collisions, resulting in at least 13 fatalities and 49 injuries. Musk has recently tried to convince investors that Tesla is now all-in on AI and his flimsy dreams of having a robo-taxi company. This somehow also resulted in Musk firing the majority of the team behind the one Tesla product everybody likes, its supercharger network, leaving the status of the North American charging standard created, with Tesla's help, in jeopardy.
4:18To 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 tech since 2008. He's the author of Ludacris, the unvarnished story of Tesla Motors, and the co-host of the Autonicast. 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 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 sort of dramatic right now, but they've been sort of been building towards us for a really long time.
5:03I would say like at a high level, what appears to be happening is essentially, you know, Tesla as a stock, as a perception, as a set of stories and dreams that Elon Musk has been weaving for many years now has essentially overtaken Tesla as a company, as a real thing. And I think from the very beginning of sort of stumbling onto this company, the defining characteristic of Tesla is this gap between perception and reality. And I've written a lot about the problems that Tesla has as a company. And yet for five years, much longer really, five years since my book came out, 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.
5:55And I think what's happening now is that, you know, the problems with the car business are so fundamental 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?
6:37So, you know, Tesla is a very nearly a two million unit a year car business. And having built that up from nothing is incredible. It's a historic achievement in the world of cars. The problem is that that seems to have peaked, right? So they did about$1.85 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 during COVID, they were able to print through a number of unique set of circumstances. They were able to print really impressive profits that made this business seem very, very real.
7:20And it was very, very real. The problem is it's created this complacency. In order to record those profits, they've basically been starving research and development and investment in new product. And so now that sales are declining, they can cut the prices to kind of slow that decline. But the only thing that's going to actually turn it around is actual new product. And those investments haven't been made. And he had the opportunity on the call to say, 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 plan to solve that that problem and that was the latest investor call just to be specific yeah and and so instead of that right he's he's gone all in on on this idea that tesla's an ai company that it's a uh you know that's self-driving this they're going to show a robo taxi um you know and And that's pumping the stock, right?
8:17That's doing the thing that traditionally happens. The problem is that those things don't make any money. They don't even make revenue, let alone profit, right? Doesn't the AI side lose the money? Yeah, yeah. And again, what's really puzzling and troubling about what's going on right now is Tesla has on paper something like$30 billion in cash, a little bit less. Right. Which is enough to really solve a lot of these problems. And if he'd gone on that call and said, we're going to take$10 billion and we're going to use it to really invest in a whole new generation of products and given some detail about what that was, I think we would be having a very different conversation right now.
9:01And instead, what are they spending money on? They've been spending on, since the pandemic, the Cybertruck, and now lots of GPUs. They're in this race to buy more of an NVIDIA's production than 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 OpenAI. Are these the same GPUs that Musk bought for XAI, his AI company attached to Twitter, or are these a completely different set? Presumably they're completely different. Tesla is a publicly traded company and X is private.
9:40So that said, he does also very much blur these boundaries within his sort of empire and frankly in ways that are not always strictly legal. So 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 first of all, you know, Tesla has admitted that crashes have involved autopilot, including fatal ones, since 2016, the very first time. 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?
10:26And that was the first time that Tesla admitted, oh, yeah, Autopilot was actually involved. And so this may have been going on for even longer than anyone realizes. NTSB, which is 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 in looking at three fatal crashes that happened between 2016 and 2018. 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's not designed for, and people become complacent and they stop paying attention.
11:03It'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 it runs into something it can't handle. And these were the findings of the old report. This is the NTSB, yes. It's a different body. And they recommended to NHTSA, who is 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. And NHTSA had an enforcement guidance at the time that said, if a system like Autopilot is prone to foreseeable misuse, that can be a defect and we can recall it.
11:40And yet somehow that was never used from 2016. And it wasn't until 2021 that NHTSA finally said, they did two things essentially in the summer of 2021. They opened an engineering analysis of autopilot, 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 assistance systems out there, you have to report that to the government. So they've been simultaneously since the summer of 21 investigating Tesla specifically, but then also collecting data from the rest of the industry to kind of get a sense of, you know, is this a unique problem to Tesla?
12:29And pretty clearly the answer to that was yes, because what we've learned is that in December of 2023, you know, they basically took, you know, these findings that showed, you know, a good deal of crashes happening, including fatal ones, and basically forced Tesla to do a recall. They did that in December, over 2 million vehicles, and they did it with an over-the-air software update. And for me, you know, having watched NHTSA sort of drag its heels, frankly, or at least move very, very slowly to address what I think has been a pretty understandable problem and a recall-worthy problem for a long time now.
13:12I kind of thought, okay, they're going to let Tesla do a software update, pretend like something has happened, and sort of move on. The thing is that we're still seeing crashes happen. In fact, there was a fatal crash literally the day before this most recent earnings call. and so now what what NHTSA is 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 uh to actually fix this problem that to me is it's a very rare for for NHTSA to do one of these it's called a 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 tesla to count 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 of nitsa's investigation over since since 2021 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 and then from the other half they're able to drill down and and identify you know, a number of kinds of crashes that seem to keep happening that are all indicative of this problem that, you know, NTSB identified, you know, way back in 2018, 2019, 2020.
14:36And so what was interesting is that data is they had taken that to Tesla and basically reading between the lines, strong-armed them into the recall. And that's often how recalls happen is that either the automaker does it voluntarily or the investigator or the regulator brings a body of evidence to them and says, listen, like you either do this or we're going to do it for you. So this NHTSA report, 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 usually this stuff, usually what happens is that, right, they build up this body of evidence, they take it to the automaker.
15:18They 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. NHTSA has not really gotten into this sort of automated driving, driving assistance stuff before. So there's no playbook here. But within the context of automotive regulation, it is rare. And what it implies is that they forced this recall.
15:53Tesla did the easiest thing possible, which was, oh, we'll just update the software over the air. And NHTSA… What did that update do, if you've used it? So it appears there have been a couple of them. And that's one of the things NHTSA is looking into is exactly what did you do. But fundamentally, the only thing that they really could do was to essentially create a lot more nags in the system. And nags are when you have the hands off the wheel or whatever, and the system is like, take control, take control, take control. What people love, what consumers love about autopilot is that it doesn't do that very much, right?
16:31It kind of lets you sort of sit back, which is the problem, right? People like the unsafe. Not the feature and the problem, it seems. Exactly, yeah. Yeah. And so, you know, and by the way, Tesla 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? The system is designed really to look self-driving. So that kind of helps the stock price. 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.
17:13So Tesla is kind of, this is why it's so popular. It's the lack of safety with the veneer of a fake safety statistic is what's made it so popular. And frankly, this is why I've been skeptical that NHTSA would really do anything. But the fact that they forced the recall, Tesla took the easy route. NHTSA could have just said, yeah, okay, we've gone through the motions here. Let's move. Yeah, we've done our job. Yeah, let's move on, right? But instead, because these crashes are still happening, NHTSA feels the need to not just say, we need to look at what you did to address this recall and make sure that it's actually solving the problem.
17:56Implicitly, we don't think it is. But then it also released this data to the public now. So now all of us can go and look and say, okay, 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, he can't handle his realness or whatever. Not woken up. Yeah, yeah. Like, this is not just some politically motivated thing. Like, like, and this is the flip side of NHTSA 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.
18:34And I think, you know, what they're going to show 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.
19:04Anabay brings you the ultimate in furniture innovation with a modular design that allows you to rearrange your space effortlessly. Perfect for both small and large spaces, Anabay is the only machine-washable sofa inside and out. Say goodbye to stains and messes with liquid and stain-resistant fabrics that make cleaning easy. Liquid simply slides right off. Designed for custom comfort, our high-resilience foam lets you choose between a sink and feel or a supportive memory foam blend. Plus, our pet-friendly, stain-resistant fabrics ensure your sofa stays beautiful for years. Don't compromise quality for price.
19:39Visit washablesofas.com to upgrade your living space today with no risk returns and a 30-day money-back guarantee. Get up to 60 % off plus free shipping and free returns. Shop now at washablesofas.com. Authors are subject to change and certain restrictions may apply. Parking shouldn't slow you down. ParkWiz gives every driver a shortcut. Book ahead, save up to 50 % and skip the hassle of circling the block. Park smarter, park faster, park whiz. Download the park whiz app today and save every time you park. So I've shopped with quints before they were an advertiser and after they became one. And then again, before I had to record this ad, I really like them.
20:16My green over shirt in particular looks great. I use it like a jacket. It's breathable and comfortable and hangs in my body nicely. I get a lot of compliments. I liked it so much. I got it in all the different colors, along with one of their corduroy ones, which I think I pull off, and really that's the only person that matters. I also really love their linen shirts too. They're comfortable, they're breathable, and they look nice. Get a lot of compliments there too. I have a few of them. Love their rust-colored ones as well. And in general, I really like quints. The shirts fit nicely and the rest of their clothes do too.
20:44They ship quickly, they look good, they're high quality, and they partner directly with ethical factories and skip the middlemen. So you get top-tier fabrics and craftsmanship at half the price of similar brands. And I'm probably going to buy more from them very, very soon. Keep it classic and cool this fall with long-lasting staples from Quince. Go to quince.com slash better for free shipping on your order and 365-day returns. That's q-u-i-n-c-e dot com slash better. Free shipping and 365-day returns. Quince.com slash better. and it seems also that this report basically gives plaintiffs the ability to sue tesla on some level it seems like it this will create a bunch of litigation oh against the company yeah and there already has been um you know tesla just right also right before the this most recent call they settled um a lawsuit dating back to a crash back to 2018 um that you know that lawsuit had been going on for a really long time.
21:45And I'm sure what NHTSA has done has played a role in that. Absolutely. All this data, everything that NHTSA has put out in the public, it's just like handing sort of loaded ammunition clips to all the lawyers out there. And frankly, that's kind of how regulation in this country works. Our regulators will do what they have to when they have to, when it becomes unfeasible for them to sort of ignore stuff. But generally speaking, a lot of regulation effectively happens through lawsuits, through civil legal litigation. So do you think that this leads to them actually having to do something with autopilot, or are they just going to hope that they don't get sued too much?
22:27It feels like they may, this feels like a normal company would just pull autopilot entirely. Yeah. So I think that's, it's going to come to something like that. So because this over there update didn't, so they did over there update that kind of keeps people being nagged more, right? And A, it's not stopping the crashes from happening, but B, it's really eroding what people like about the product. 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 kibosh on. They wouldn't let it happen. So Tesla kind of assuming that NHTSA is going to find that the current fix is insufficient, there are sort of two basic routes that Tesla can take.
23:15One is they can dramatically reduce sort of the – it's called the control authority and the capabilities of the system. Essentially, a system – a driver assistance system should be designed to assist the driver. And the fundamental flaw of Autopilot is that it actually is more designed to look like the car is almost self-driving. And those are two different things. So instead of the automations assisting you. Yeah, how are they different, actually? Really get into that. Yeah, 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.
23:56But if you get yourself into a really sticky situation, someone cuts you off, something like that, the car will, there's forward collision warning of 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 40 % reduction in frontal crashes. Okay. So, so like proven statistical safety advantage. And it's because the critical piece of it is that you don't rely on it. No one sits there and says, oh, it's cool if I just accelerate into, you know, the semi truck or whatever.
24:30I'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 it's self-driving and then puts the driver in what's called, you know, a vigilance task, 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.
25:02And over those miles, bad things happen. What we're worse at than driving are these vigilance tasks. And we know this from research going back 100 years. And radar operators in World War II. You sit there and you force someone to watch a screen. And then when one little thing happens, 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.
25:41I mean, this is insanely hard for people to do. And it creates, you know, these kinds of safety problems. um so so you know i think fundamentally this is this is the challenge that tesla's up against right is that is that they're selling this as a safety thing but there's no safety record you know ihs 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 uh uh area so what is level two level two is essentially uh uh automated assistance of of of two axes of control it's it's kind of confusing 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 it 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.
26:43And then, you know, they build on that a little bit by having, you know, a navigation, 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, 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.
27:24Because 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 are. It seems like 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 a fascinating situation where, yeah, like the word, so then there's the, really, it's a way of building up this, frankly, scam of self-driving, right? Because that's, they're getting people to pay$10 ,000,$15 ,000 a car for this full self-driving, you know, add-on.
Read the full transcript
27:57And people wouldn't do that unless they had some reason to think that, you know, this is something that is somewhat near. and essentially, again, 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 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. Because this feels like it will continue to kill people unless something changes.
28:40But 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 make it better. Well, yeah. And that's because fundamentally, the 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 Waymo, Waymo is really the only company that is really actually doing self-driving. They have robo-taxis in San Francisco.
29:12And you may love them or hate them, but it is incredibly impressive to be in a completely driverless vehicle in somewhere like downtown San Francisco. They're doing it. And they do it through two things, fundamentally. One is that they limit the domain it operates in. So it only operates in San Francisco. And then they're expanding to new markets. but it's not a general solution. You create a model that works in a specific area. And the other thing you have to do, it's sort of like turning it into a board game, right? You beat a human, you have to bound the complexity. In the bounded complexity of Go or chess, an AI can beat us.
29:48The other thing an 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, everyone knows exactly where each piece is. There's no confusion about it. and waymo does that with these really really robust sensor systems incorporate lidar and radar and you're also limited heavily in 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 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.
30:29And 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 so essentially what they've done is just use, you know, cheap hardware 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, 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 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.
31:15But the problem is that machine learning doesn't work that way, right? With machine learning, the generalizability of AI is a huge topic. Everyone wants to believe in it. But certainly when it comes to something that is safety critical, where it's one thing for a large language model to screw up and hallucinate and everyone laughs and ha ha, that's funny. When it comes to driving, what you're doing is you're reconciling a probabilistic system with the need for 99.99999 % reliability. And that 0.0001 % is where people die. Yes, because we drive millions and millions and millions of miles, right?
31:57And Americans drive too much as well, so that's dangerous too. Our roads are worse. It's not great. Yeah, so what's amazing is that humans are bad at babysitting. That's essentially what it forces 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? Except this report is going to potentially change how that is viewed by judges. Well, yes. So Tesla is not – so a vehicle becomes self-driving when the manufacturer or the owner-operator takes legal liability for it.
32:42Right. And so essentially none of what Tesla is doing is self-driving because it sticks humans with the consequences. And Madeleine Claire Elish had a great paper a number of years back called Moral Crumple Zones. And that's essentially what Tesla is doing is using humans as moral crumple zones. And the way they've architected the system, 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 Tesla's perspective. Taking a step back, what does Tesla actually do now?
33:21Will they change? Will they just keep sitting there? And Elon Musk said it's actually epic that the cars killed people. was good because 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 and they're cutting into their prices and 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 demand 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.
33:56They're unique reasons to buy a Tesla. And frankly, you know, with full self-driving, that's$10 ,000,$15 ,000 per car in an industry where like, you know, people have massive fights at the development level over pennies per car. To add$10 ,000 in pure profit on a car, this papers over a multitude of sins financially, And so if the prospect here is that not only are Tesla sales falling, we'll continue to fall because there's no new product to turn that around. But then also you take away this incredible advantage in terms of profit margin, right? This$10 ,000 to$15 ,000, even if the take rate is 10%,$10 ,000,$15 ,000 per car, you spread that over your whole fleet.
34:44And it's by auto industry change, a huge profit margin. But will they have to pull Autopilot out? If they do. And again, my sense is that this is where Nitz is going. If they pull Autopilot, 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 Autopilot isn't safe and it doesn't have those things. But then it turns into negative margins. And the thing is, their margins have been compressing, compressing, compressing. And they're at the point now.
35:18What turns into negative margins, though? The car business. 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 that 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 the difference is in what's called operational design domain. but but also the difference is autopilot is is like the price is built into the cost of a tesla whereas full self-driving is an 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 would 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 to saying autopilot is the best part of the business.
36:08We don't even need the car. He seems to be selling this hard. Yeah. Yeah. No. So the NHTSA does, they move so slowly. They're so tentative. They're so 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 order a mandatory recall, and then they can even order a mandatory stop sale. They can say it's illegal to sell Teslas in this country until you essentially deactivate the system or implement some kind of fix that we deem is appropriate. And that's probably impossible to fix, though. So fixing, right.
36:51So 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 you 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 Tesla 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 don't have the wiring harnesses for it. In theory, it could be done, but I think it's basically economically impossible.
37:25And 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 one of the ways that I'm, you know, 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 scenario that kind of potentially makes this all make sense is that Elon kind of gets it that this is going to happen, that NHTSA is not screwing around.
38:02They don't want more deaths on their hands. They're going to force the issue on this and 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 the core business is going to die and sort of like with twitter right you know he thinks the way his mind works he thinks he can sort of go and tell earth like oh the regulators or the advert 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 yes 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 someone who's obviously not very normal yeah i'll say it's my podcast okay yeah so so i mean that that may be one way to explain all of what's going on because otherwise he would just go out and say that the wokes have stopped autopilot but he would actually pull it you think well i mean i think 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 this 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 robo taxi 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 oh it's just astute it's that just to be clear every single journalist who wrote about the robo taxi 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 oh yeah uh yeah i completely agree um i mean look the idea that you know uh you can do sort of level five self-driving which means fully you know automated no human monitoring or anything and and not in a limited domain but everywhere like no one else is even selling this tesla's been selling it since 2016 no one else is even selling it if it were possible wouldn't one company want to compete on it right yes economic logic surely this seems very put 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 ford for example who has tons of cash government subsidies tons of brand power, they would also do this, except if it was too dangerous.
40:33Yeah, exactly. And so what you do see from Ford and General Motors and others is that 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 someday drive itself completely by its own 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 this just blatant scam.
41:14And I think the reason that people have got, that they've gotten away with it so far, obviously it's nothing to do with technical plausibility, although it does sort of tie into, you know, know the ai hype that we see elsewhere so people think that agi is near you know i kind of make sense why they might think that it might be because there's shadows on the walls of the cave that suggest it's possible yes but but the real reason i think is that you know the when you say the word self-driving car what what people what americans in particular think is a car that drives itself and what is i mean that's probably because those are the goddamn words but but that's the No, no.
41:51It's misleading in its face. Yeah, yeah, exactly. But what people don't understand is that where autonomous driving actually does work is in these robo-taxis 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 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? Because it's impossible. 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.
42:35He's the only person who's selling the mental model that people have for self-driving car. And this is why Waymo is actually doing it. They have actual driverless vehicles you can get actual rides in. And no one stops and is like, wait a second, how is it that they're able to do this? But every year Elon says this is ready and then it's not. What's the disconnect there? He's been saying it would be ready since 2019 as well. He has been talking out his asshole about this a minute. Yeah, he has. 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 within a year or two.
43:13And 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, certainly from financial markets, than even the companies that are proving it and doing it the right way. And I think that's a really troubling commentary on the relationship between technology and capital in our society these days.
44:11We'll be right back. duvet can go straight into your wash. Perfect for anyone with kids, pets, or anyone who loves an easy-to-clean, spotless sofa. With a modular design and changeable slipcovers, you can customize your sofa to fit any space and style. Whether you need a single chair, loveseat, or a luxuriously large sectional, Anabay has you covered. Visit washablesofas.com to upgrade your home. Right now, you can shop up to 60 % off store-wide with a 30-day money-back guarantee. Shop now at washablesofas.com. Add a little to your life. Offers are subject to change and certain restrictions may apply.
44:51Parking shouldn't slow you down. ParkWiz gives every driver a shortcut. Book ahead, save up to 50 % and skip the hassle of circling the block. Park smarter, park faster. ParkWiz. Download the ParkWiz app today and save every time you park. Stop settling for weak sound. It's time to level up your game and bring the boom. Hit the town with the ultra-durable LG XBoom portable speaker and enjoy vibrant sound wherever you go. Elevate your listening experience to new heights, because let's be real, your music deserves it. The future of sound is now with LG XBoom. And for a limited time, save 25 % at LG.com with code FALL25.
45:31Bring the boom. XBoom.
45:39so changing subject 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 like most of the industry started buying into his charging standard and 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 Tesla has money.
46:17Tesla, on paper at least, has almost$30 billion 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 just cuts stuff. It's like, oh, we're having trouble. Let's get rid of the dead weight. Let's get rid of cost. The problem is that this doesn't solve any of his problems. I think with supercharging, it's a little different. And so supercharging, like Tesla itself, was a really critical piece of this sort of going zero to one with the EV business.
47:01Like I think, you know, when Tesla first got started, they had to do something like the supercharger network, right? It wasn't really optional. Like it was a key part of growing their market. Yeah, because no one could charge their cars otherwise. Yes. And as long as it was Tesla exclusive, it was, and increasingly over time, as competition got better, it became sort of the reason to buy Teslas. 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.
47:37It'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 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.
48:17And I think there's reason 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 supercharging has never really been fully disclosed. and essentially it seems like maybe this may actually be one of the more rational decisions in that the business itself may just not be that good. Tesla, by opening it up, they'll get revenue from other 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.
49:00There have been estimates that suggest it's worth like 10 to$20 billion. 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$30 billion of cash or almost$30 billion 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 forensic accountant. I'm not gonna 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.
49:32Um, and, 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. know. But talking of broken, how about that Cybertruck? What the hell is going on there?
50:04Yeah. So again, it's a question of priorities. The car business is a capital intensive business and Tesla's been, they've had a lot of things go well for them, but they've been resting on their laurels. And you have to invest your money in something in order to keep growth going in the car business either right you keep expanding the superchargers or the you invest in new cars or you update more cars more add-ons yeah and and so the soup so the 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-size trucks in america is the number one best business period right right that that business keeps the Detroit automakers going.
50:55They barely make any money on anything other than trucks. The trucks essentially subsidize most of the rest of their businesses. And so targeting that segment was smart. Targeting it with essentially a meme was not smart. And I think that to me, the Cybertruck is a symbol of sort of Elon's ego sort of hitting escape velocity 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 you could have done a wedgie truck like that and not made it look like such garbage if he'd listened to his, his stylist, Franz von Holthausen, is certainly talented enough to have made a much better design or version of that concept.
51:42It was clear, Elon was like, no, I want it to be flat and straight lines and I want it to look like low polygons, 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 going to look good in reality. 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.
52:18The guy other than Elon designing them. Yeah. Well, I mean, obviously, 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 the product planning team would tell him, listen, Elon, like we know this full-size truck segment is so huge. We can build our next wave of growth if we get the right product in the segment. They could though, right? Yeah. They made the Model S for trucks, like an 80 to 100 grand fucking brilliant truck, which they are fully capable of doing, surely. Yeah. Well, except that Elon doesn't believe in market research.
52:55Perfect. Sure. Absolutely. 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 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 2016? Because what cool idea has Elon Musk had that's worked in that time? Well, since 2016, so I mean, I've always argued 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 hype-y kind of things. Yeah, it's a good idea. I'm not saying it's not.
53:36It's just that the way he manifested it is the problem. Yeah. And I mean, I think throughout the history of the company, right? So the Tesla Roadster, the original one was just going to be like a Lotus Elise 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 he 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 their their pure play you know it's experimental yeah yeah so we just use it to raise more money and then and then we'll get serious right the problem is just never released the second roadster it's just never coming out no no it's fucking insane like there's so many people have written about this thing oh and people put money down on it remember the the founder's edition people put down 50 at the entire full price 250 000 up that's completely bonkers that is bonkers that is come on but but but like this is the thing with tesla 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 i think this is kind of the problem that full self-driving and autopilot are having, right?
54:57And I think hopefully NHTSA will take action and that will be it. It's the government, right? They should be the ones who step in. And frankly, I think if you want to look at 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 Elon's just following his incentives. He's come out of a situation where it's okay to kind of lie and exaggerate 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 law enforcement and regulators, right?
55:36Like as a society, you have someone who's endangering what's already a very dangerous activity, making roads even less safe while lying about, 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, that 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 that as 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 just, it's the government.
56:24So I thought that was a really good point to end the interview. Because while Musk has and continues to be, and probably will for a while, he'll continue to be 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 ed nidemeyer laura kolodny linette lopez alan onsman kristin 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 musk's farts even last week alex kantrowitz 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 musk about his plans for Grok, the large language model he's bolted onto Twitter, and how it will interface with Twitter's newsfeed generating stories.
57:25Stories from tweets. Now, the big miss here, other than just copy-pasting something Elon Musk said, was leaving out the fact that Grok has been doing stories already. It's been summarizing the news, including multiple hallucinated stories, like one about basketball player Clay Thompson allegedly vandalizing places with bricks after and Grok 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.
58:00I do not know why you're doing this. No one should be doing this. If Elon Musk sends 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-asses everything. He rushes. He tricks. He cheats. he half explains and moreover he lies. Elon Musk is not someone to take at his 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.
58:37A 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 is this guy has billions of dollars.
59:15Elon Musk. He's a liar. He's a scam artist. 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, the 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.
59:49And he manages to make money and spike Tesla's stock every single goddamn time. People like Jim Cramer and his ilk fuel his murderous, genuinely dangerous ideas. I challenge you, whoever this is listening, to think very critically about this man.
1:00:15thank you for listening to better offline the editor and composer of the better offline theme song is matt osowski you can check out more of his music and audio projects at matt osowski.com m-a-t-t-o-s-o-w-s-k-i.com you can email me at easy at better offline.com or visit better offline.com to find more podcast links. And of course, my newsletter. I also really recommend you go to chat.wheresyoured.at to visit the discord and go to r slash better offline to check out our Reddit. Thank you so much for listening. Better offline is a production of cool zone media. For more from cool zone media, visit our website, coolzone media.com or check us out on the iHeartRadio app, Apple podcasts, or wherever you get your podcasts.
1:01:18Time for a sofa upgrade. Visit washablesofas.com and discover Anabay, where designer style meets budget-friendly prices, with sofas starting at$699. Anabay brings you the ultimate in furniture innovation with a modular design that allows you to rearrange your space effortlessly. Perfect for both small and large spaces, Anime is the only machine-washable sofa inside and out. Say goodbye to stains and messes with liquid and stain-resistant fabrics that make cleaning easy. Liquid simply slides right off. Designed for custom comfort, our high-resilience foam lets you choose between a sink and feel or a supportive memory foam blend.
1:01:55Plus, our pet-friendly stain-resistant fabrics ensure your sofa stays beautiful for years. Don't compromise quality for price. Visit washablesofas.com to upgrade your living space today with no risk returns and a 30-day money-back guarantee. Get up to 60 % off plus free shipping and free returns. Shop now at washablesofas.com. Authors are subject to change and certain restrictions may apply. Parking shouldn't slow you down. ParkWiz gives every driver a shortcut. Book ahead, save up to 50%, and skip the hassle of circling the block. Park smarter, park faster. ParkWiz. Download the ParkWiz app today and save every time you park.
1:02:34Stop settling for weak sound. It's time to level up your game and bring the boom. Hit the town with the ultra-durable LG XBoom portable speaker and enjoy vibrant sound wherever you go. Elevate your listening experience to new heights because, let's be real, your music deserves it. The future of sound is now with LG XBoom. And for a limited time, save 25 % at LG.com with code FALL25. Bring the boom. X-Boom. This is an iHeart Podcast.
From the publisher
On April 26 2024, the NHTSA, the government body responsible for keeping roads safe, found Tesla's Autopilot and Full-Self-Driving software created a "critical safety gap" with drivers, killing and injuring people in the process, in the very same week that Elon Musk fired most of Tesla's team behind their Supercharger electric vehicle charging moment. Ed Zitron brings on E.W. Niedermeyer, author of Ludicrous: The Unvarnished Story of Tesla Motors, to explain exactly what the hell is going on.
See omnystudio.com/listener for privacy information.

