US Edition
The Greeks assumed that storms over Athens were the angry Gods fighting over Mount Olympus. Today’s tech titans do it in plain sight, on social media.
Last week Elon Musk threw some thunderbolts at Bill Gates, predicting he will be “obliterated”.
Musk’s personal feud with the Microsoft founder has been simmering for a couple of years, ever since he discovered Gates had put a significant amount of money into shorting Tesla stock: betting the price would fall.
He has pursued the grievance with typical vigour – posting an unflattering picture of a photo of Gates’ with a prominent middle aged paunch, comparing him to the pregnant man emoji. It’s all very Trumpian.
Gates isn’t alone in his scepticism. An army of short-sellers, who call themselves Tesla Q, have even created their own derivatives: two dedicated investment funds are listed on Nasdaq for Tesla shorters.
The sums involved when tech titans have impulsive manic phases are unimaginable. For example, when Musk decided he didn’t like Twitter’s board of directors, bought the company and took it private, it cost him the equivalent to the annual GDP of Portugal or New Zealand: some $250bn (£195bn).
A public feud is also the perfect distraction from the challenges facing important parts of Musk’s empire, which are very real. Each time fresh doubts arise, Musk pops up and doubles down on a wild or improbable claim. Musk’s rocket business, SpaceX, is in great health, but some of his others are not.
Musk boasted last week that he would triumph over the short-sellers “once Tesla fully solves autonomy [safe self-driving cars] and has Optimus in volume production”. Sadly, this only increased the mockery.
Optimus is Tesla’s humanoid bipedal robot, another business inspired by 1950s boys’ science fiction – specifically the movie Forbidden Planet – like his resuable rockets, which return gently to Earth. Musk envisages Optimus replacing manual labour in difficult and dangerous situations, and as domestic help. Perhaps every home will have a Robbie the Robot one day.
The problem is, it just isn’t very impressive. The Japanese have been showing off robo-humans at trade shows for decades: they nod, bow and often fall off stage. Musk’s is little different.
“Investors are not excited about Optimus”, observed Gene Munster, market guru and analyst at Deep Water Management. Earlier this year Musk admitted that footage of an Optimus robot neatly folding a T-shirt had been faked. “Optimus cannot do this yet”.
Tesla already had enough problems on its plate with imported, heavily subsidised Chinese EVs flooding the market, undercutting them significantly. It’s been slashing prices, but struggles to lower its costs against deeply subsidised rivals.
But it’s “solving autonomy” that really has the short-sellers licking their chops. Success would mean that a Tesla car or truck is able to drive safely with the passenger paying no attention to the road – Level 5 on the industry scale of capability.
Nobody believes it’s imminent. After spending more than $100bn in the past decade, the industry has been unable to come close: Level 3 is the best we have today. Safety is the key.
“If you don’t feel safe putting your 96 year old grandma in the backseat with nobody behind the wheel, it’s not “Full Self-Driving”, explains EW Niedermeyer, author of the Tesla book Ludicrous.
Scientist Filip Piekniewski points out that computer perception – his speciality – is nowhere near good enough. Manufacturers just won’t admit it, and those left in the field have been “autonowashing”, exaggerating the capabilities of the technology.
This has in turn has inevitably led to drivers turning their attention away from the road, causing accidents. Tesla engineers have testified that the company’s marketing claims cannot be justified. The US Department of Justice is reportedly considering suing Tesla for wire fraud, for misleading investors and consumers.
But the real problem with Musk’s vision of robo-cars is that even if all the technical obstacles are one day overcome, nobody really needs it. We can joke about armchairs that wheel us to the pub and back, and futurists and urban utopians can dream of the end of car-ownership and on-demand robo-taxis. But who cares?
The driver is really the cheapest part of any taxi business, and employers know they can just import some newer, cheaper labour if wages go up. Not that taxis are a profitable businesses anyway: just ask Uber. After a decade, it’s only just broken even.
Musk says autonomous vehicles are “a $5 to 7 trillion market cap situation”, while autonomous robots will one day generate $25 trillion. As one Twitter critic pointed out: that’s one third of global GDP.
Back on planet Earth, the gap between these boasts and reality grows ever wider. Tesla’s first truck was years late, and has been recalled four times since deliveries began in November.
Ultimately, however, it doesn’t seem to matter. Musk inhabits a rarified plane where businesses just don’t fail. Other denizens include Boeing, for example: it appears that the company will be propped up no matter what happens, so that Airbus doesn’t take the civil aviation market and the US military retains another supplier.
Can you imagine Microsoft being stripped of Government contracts, even after its excruciating security failures? Where are businesses supposed to go?
Chinese manufacturers rarely go bust: they’re too important to the PRC. The normal rules of the market have been suspended: Musk is just the most colourful figure in this fantasy land.
Musk is light years away from a self-driving car
Despite spending $100bn in the past decade carmakers have still not produced an autonomous vehicle