Does Tesla have a sustainable competitive advantage (yet)?

Audi is meant to have Level 3 autonomy but they’ve not activated it because of legal concerns, interestingly Level 3 is where the liability shifts from humans to machine, so not too surprising that car makers are reluctant.

I’m not sure we’ll ever be able to cover all the edge cases so you will need Artificial General Intelligence (AGI). Earlier on today I walked through a narrow street, with a double parked workman’s truck opposite a closed footpath near a corner, so you had people trying to walk past that point while cars were coming the other way.

In terms of AI overall, I don’t think we are close to Artificial General Intelligence (AGI). Most AI is trying to create a computer brain using the human brain as the starting point, but the human brain is complex, and not properly understood by us. Also computers do not really function like brains. There was a article on FT a few weeks ago by Henry Marsh ( a neurosurgeon ) which makes interesting reading Can man ever build a mind?

On Elon Musk, he’s one of few that often warns people on AI. I don’t recall the figures but the amount of focus on making AI safe is nearly negligible when compared to building AI, it’s not something that can be tacked on at the end, so expect a lot of hurdles.

I could be wrong but I’m very skeptical that Audi’s got here first. A quick Google hasn’t produced any articles explaining how they’ve trained their AI & I haven’t heard about them adding the necessary sensors to their existing range of vehicles. I’d expect that to have been mentioned in a story like this, for example. So I’m not sure how they’d have beaten Tesla & co. to it?

Perhaps they mean that they have the technical components, that would be necessary for Level 3 autonomy, ready to go but don’t actually have the capability to fully enable it yet? They’re calling it a pilot here which suggests that it may not be 100% reliable (& could be significantly less reliable) at this stage.

You would expect Tesla, or Google to get there first but the incumbents would definitely be working on something as well. The incumbents are probably a bit more cautious, or don’t need those headlines for funding so they don’t speak about things as much.

Audi has always been big on tech/gadgets, so on some level I wouldn’t be surprised if they had something that’s available for the premium edition of a premium car.

Toyota is also doing big things in this space, their Lexus brand was the first commercial car that could parallel park itself.

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Coming to this late but Tesla’s advantage is technology (for now at least) - they still have the most efficient drive train and proprietory cell chemistry - but more significantly cost. They have come through the valley of pain and are able to sell as many of their vehicles as they want and grow as quickly as possible. Their competitors are now developing decent cars but very very few are able to produce them at scale and/or make money off them. Until they figure this out how they wont be able to compete. It’s one thing for GM to sell 30,000 Bolts a year at a $3000 loss on each one; quite another to sell 300,000.

Tesla’s tech lead could disappear quickly (although I dont think it will) but their cost advantages give them at least 5 years on everyone else in my view.

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Looks like they have some advantage in China: https://www.reddit.com/r/CanaryWharfBets/comments/ates93/tesla_is_not_required_to_have_a_joint_venture/

SEC news is out today, as is the disappointing but unsurprising Q1 delivery results. Stock is already down ~10%.

I personally wasn’t so sure on the demand struggle thesis but it seems Tesla is having serious issues here. c. 3000 cars in inventory and 10k+ being shipped. Q1 and probably Q2 profitability will evaporate given the restructuring and price cuts. S and X need urgent revamps now imho otherwise they are going to be to reliant on rushing out Energy + Truck contracts for cash flow.

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Tesla Autonomy Day currently live streaming, no clue what is going to be shown.

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V quick summary on the Full Self Driving Computer:

14nm chip being fab’d by Samsung, designed in house
Fixed inputs - video only
all Teslas being built right now are being fitted with the FSDC
144 TOPS, 21x times as powerful as the world’s next most powerful autonomous drive unit (NVIDIA’s)
Already started work on a gen 2 FSD which is “perhaps 3x as powerful”

Extremely Muskian statements of the day:
Lidar is “a fool’s errand”
Every Tesla vehicle since a few months ago now only limited from FSD by software

Now moving on the Software discussion and eventually demos.

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Interesting seeing these neural networks. A real breakthrough will come when they can learn how to learn, i.e. the network can recognise a type of dog from looking at just 3 images, instead of thousands, similar to how a human would process the information.

Yeah it was. I think the real CA I got from Tesla here, apart from Andre’s three pillars, is that thanks to the fleet they can immediately source a cost free, real world image of say, a tyre, analyse and train it, then find similar images to further improve the NN.

Tesla likes to claim that they’re leading in self-driving development, but I’ve seen people saying a few times that it’s Alphabet and GM that are most advanced. I’m holding all 3 stocks in the app anyway.

In terms of disengagements per mile (basically the number of time the real driver has to take over because it stops or does something stupid) Tesla isn’t even in the top ten at the moment. Waymo (google) is top

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Yeah, this article says it all: https://www.forbes.com/sites/alanohnsman/2019/02/13/waymo-tops-self-driving-car-disengagement-stats-as-gm-cruise-gains-and-tesla-is-awol/

Waymo only disengaged once every 11,000 miles, crazy. I’m also not convinced by Tesla’s arguments on why cameras are better than lidar, it seems like all other companies are using lidar. Musk said at one point lidar is ‘doomed’.

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I mean this is the thing. We are actually years from FSD and Tesla seem to want to rush it out and be the first. The timetable for rollout and figures they gave for the ridesharing are…interesting.

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Official statement from NVIDIA:

Jesus wept, this is going to be a long week with Q1 earnings, only Monday night…

Link seems to be gone now, here is most of it, that was really interesting and worth watching whatever you think of musk. Not your standard investor briefing.

The talk by Andrej Karpathy is really interesting on machine learning applied to self driving, and musk outlines his vision of a fleet of self-driving robotaxis without controls (‘we’ll just delete the steering wheel’, he says at one point).

I do believe autonomous cars are the future in the next 5-10 years, and will wipe out the likes of Uber and Lyft, but whether Tesla will manage it or die trying is hard to say. The hard part is autonomous cars though, not a taxi app.

Musk reminds me of Jobs in so many ways - able to attract, inspire and retain global talent, and drive them to sacrifice everything for him. I’d wager he even believes his own myths at times. I think he wants to push it faster than is safe as he sees it is a winner takes all market - robotaxis are a huge area Tesla could dominate if they are first. Unsurprisingly he generates vitriol and admiration in equal measure - both to some extent justified.

Waymo is doing a very different thing with limited miles, expensive heavily instrumented cars, and trained drivers. I’m not surprised their numbers are radically different given Tesla is trying to test with real customers. Are they google now or independent? It’ll be interesting to see them scale up, they should at least rival Tesla and are aimed at a very lucrative market that could replace personal cars completely.

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Would recommend having a read of ARK investment management’s views on autonomy and Tesla, website and twitter :slight_smile:

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It’s really good that Ark publish their analytical models eg https://ark-invest.com/research/autonomous-taxi-model .

But I am wary that they’re quite cheerleadery for Elon. Tesla have been saying they’re two years away from full autonomy for many years now it seems. I’m still a skeptic and don’t hold the stock.

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Tesla annual shareholders meeting. Live now

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Surprising revelation following the last question on the Q&A:
Tesla has a design for a submarine car

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