Company / division: Carmakers
Tesla On Track to Deliver First Model 3s by End of July, But Q2 Production Falls Short (Jul 3, 2017)
Update: following another release from Tesla on Monday, I’ve amended both the headline and content on this piece significantly from the first version published Monday morning.
Overnight, Tesla CEO Elon Musk had tweeted that Model 3 production would begin shortly, with the first deliveries happening by the end of July, with production ramping up slowly from there. Hitting the launch milestone is something of an achievement for a company that’s often missed its own self-imposed deadlines, but the real test is ramping production enormously above past levels, and that continues to be the achievement I’m far more skeptical of. The new numbers provided today suggest far lower total production than Tesla has promised in the past, at least in the second half of this year and first half of 2018. Later on Monday, the reason for getting that news out overnight became a little clearer, as Tesla released its production and delivery numbers for the June quarter, including a shortfall in both due to battery shortages. That’s bad news for Tesla, and more evidence of its inability to plan and execute on production in predictable ways, and therefore to meet the targets it sets itself. None of this gives me any more confidence in the longer term projections of Model 3 production.
Safety Advocates and Carmakers Speak in Congress on Autonomous Driving (Jun 27, 2017)
The US House Energy and Commerce panel held hearings today on proposed legislation to regulate the licensing of autonomous vehicles for testing on roads. There is, of course, quite a bit of that testing going on already in various states throughout the US, but the Congressional effort aims to unify regulation on the topic and create a single set of policies nationally as a result. The carmakers are, in theory, in favor of that, but only if it reflects the lighter-touch approaches currently being taken by states like California, while safety advocates are pushing for tighter regulation, more testing, and generally slowing things down. There are sensible arguments being made on both sides here – no-one, least of all the carmakers, wants high-profile accidents featuring self-driving cars putting the whole field back by years. But given the potential of autonomous driving to increase safety over time, there are also strong safety-centric arguments for allowing reasonable testing to go on without burdensome oversight. Given the current state of US politics, I’m not 100% confident that we’ll get a sensible bit of legislation out of all this, but I do think that it’s inevitable and welcome that we’ll eventually have a national framework for not just testing but ultimately selling autonomous vehicles. Testing is an area that needs to be addressed today, but commercial vehicle sales are several years away and as such there’s time to get this stuff right and no need to rush into anything today. But there are some really thorny issues here that do need to be thought through in great detail, not least questions of liability and responsibility.
via Bloomberg
Waymo Hires Former Tesla Autonomous Hardware Lead to Run its Own Hardware Efforts (Jun 23, 2017)
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Nissan-Renault Plans to Combine Electrification, Automation and Mobility Within 10 Years (Jun 23, 2017)
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Ex-Apple Engineer Chris Lattner Leaves Tesla After 5 Months (Jun 20, 2017)
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Tech CEOs Respond Negatively to Trump Withdrawal From Paris Climate Accord (Jun 1, 2017)
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Tesla Releases Model S / Model 3 Comparison to Clear up Confusion (May 26, 2017)
This comparison leaked earlier in the week but Tesla has now made it official by posting it on its website (and Elon Musk pointed to it in a Tweet overnight). The only reason I’m including it is here is that it’s a great illustration of the hole Musk dug for himself with his puerile naming strategy for the Model 3 (he originally intended to name it the Model E, making the three current models the S, E, and X, but Ford objected so he flipped the E to a 3). That strategy has led many people to believe the Model 3 is the third iteration of the Tesla and therefore better than the other two models on offer, something Musk has been somewhat frustratedly trying to rectify for the last few months. This comparison, therefore, which is coming out months if not years ahead of the actual availability of the Model 3 to new buyers, seems almost entirely designed to clarify that confusion. Even the introduction makes the point Musk has been hammering home via Twitter recently: “Although it will be our newest vehicle, Model 3 is not “Version 3” or the most advanced Tesla”. All the specific side by side comparisons make clear that the Model 3 is indeed substantially inferior to the Model S – slower acceleration, shorter range, paid versus free supercharging, smaller passenger and cargo space, and so on. Again, this problem is entirely of Tesla’s own making, but also reflects an old problem in the tech industry: the Osborne effect, in which announcing a new version of a product while still trying to sell an earlier one reduces sales of the one currently available. This is just a unique spin on that particular problem given that the Model 3 isn’t actually a successor to the Model S.
via Tesla
Drivers Trust Carmakers More than Tech or Ride Sharing Companies for Autonomy (May 24, 2017)
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Ford Announces New CEO, Who Formerly Headed its Mobility Initiatives (May 22, 2017)
It might seem odd at first glance that I’m covering an auto industry leadership change, but it’s news that’s very much in keeping with the “Tech Disrupts Transportation” narrative here on the site, and the nature of both the troubles that prompted the move and the move itself are reflective of that trend too. Mark Fields, who has been CEO for the last three years, is being replaced by Jim Hackett, who has been running Ford Smart Mobility. Although this New York Times piece and others this morning are focusing on the fact that FSM and therefore Hackett has owned Ford’s autonomous driving initiatives, that’s only part of its remit, and that’s worth noting. It also owns in-car connectivity, mobility itself (which is the industry term for ride sharing and other new ownership and other business models for cars), and data and analytics, among other things. In other words, with the exception of electrification, it has owned essentially all of what’s next in the automotive industry. That Fields would have put all that in a separate division is perhaps the biggest sign that he underestimated how central these changes would be to the future of the company, and it also makes sense to put the guy who’s been running all that in charge of the company at this point. Hackett will need to bring these initiatives to the forefront of what Ford does, along with electrification, where it’s moved more slowly than other car companies, if he’s to help turn Ford around. But he’s taking over at a really tough time in both the company’s history and the US automotive industry.
Google Announces Android Infotainment OS Deals With Audi and Volvo (May 15, 2017)
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Tesla Takes Risk by Moving Straight to Final Assembly Line Tooling for Model 3 (Apr 24, 2017)
I’m on record as being very skeptical that Tesla can achieve its production targets for the Model 3, given both its patchy track record on meeting such targets in the past and the massive ramp the Model 3 production schedule entails. This report from Reuters suggests that Tesla is banking in part on an unusual strategy for manufacturing, under which it will move straight to ordering and installing the final assembly line tooling, rather than testing the manufacturing process with “soft tooling”, which is easier and cheaper to replace if something’s not working. That skips a stage in the production ramp, which should accelerate things, but will only work if Tesla’s computer modeling is effective in helping it get the tools order right first time. So it’s definitely a gamble, and one which could either pay off in a big way and allow Tesla to get to its target production more quickly, or actually delay production or lead to defects in the cars. Even with this approach to manufacturing, it’s still not clear to me that Tesla can accelerate its output fast enough to meet its targets. So while there’s some upside in that it may get somewhat closer to meeting its goals, the downside is potentially much bigger if things go wrong. What’s crazy here, of course, is that all these challenging deadlines are entirely self-imposed – it’s Tesla that insists on promising so much and then underdelivering.
via Reuters
Tesla Recalls 53,000 Cars Built in 2016 Over Parking Brake Issue (Apr 20, 2017)
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Tesla and Former Employee Settle Lawsuit over Stolen IP, Spin Settlement Differently (Apr 19, 2017)
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Autonomous Driving Technology is Being Trained on Simulators Including Video Games (Apr 17, 2017)
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Elon Musk Tweets About Future Tesla Products Including Semi and Pickup Trucks and a Convertible (Apr 13, 2017)
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GM to More than Triple Cruise Autonomous Tech Employees in California Over 5 Years (Apr 12, 2017)
GM has filed for and received a tax credit in the sum of $8 million from the state of California in return for investing $14 million in office space and related items this year and committing to hire 1163 employees over the next five years for its self-driving tech subsidiary Cruise. Given how the importance of autonomous driving technology will grow in the coming years and the fact that California is the hub of much of the testing, it’s logical that GM would want to increase its base there significantly. However, these 1163 employees represent a more than three-fold increase in its employee base in the state, and the average salary GM is projecting for those employees is $116,000, so my guess is they’ll mostly be skilled engineers.
via Axios (the filing from which I pulled the data above is here)
Cadillac takes aim at Tesla’s Autopilot with ‘hands-free’ Super Cruise technology – The Verge (Apr 10, 2017)
One of my big objections to Tesla’s Autopilot technology has always been the name, which connotes a level of autonomy the system doesn’t actually aspire to and which it certainly doesn’t deliver. Tesla has partly dealt with that issue by updating its software to require users to keep their hands on the wheel, but does little else to ensure attention, which means that even when the system performs as it should, there’s little guarantee that the human driver will. Cadillac today announced a new Autopilot-like feature but very sensibly named it in a way much more likely to give buyers and users an accurate impression of what it does, tying it to the very familiar cruise control already in almost all new cars. However, the more important thing in my view is that the system also comes with lots of protections designed to ensure that the driver does actually pay attention, which is a huge issue in situations where attention but not activity is required, such as driving a car with this kind of intelligent cruise control running. There’s a long history of scientific research in this area, and it all says that paying attention in a passive way like this is something human beings aren’t good at, and Cadillac’s new system is designed to help the driver stay attentive. The big question about this new system, though, is that although it’s being billed as LIDAR-based, it’s not using a LIDAR in the car but instead using mapping data previously generated by LIDAR, which means it’s non-real-time. That, in turn, means that if anything has changed in the road environment since the map was generated, the car won’t know about it, and GM doesn’t seem to have talked much about how frequently it’s going to update its maps of US and Canadian highways to mitigate this.
via The Verge
Tesla is now worth more than Ford after delivering a record number of cars for the quarter – Recode (Apr 3, 2017)
There are two things here: firstly, Tesla’s Q1 delivery number, and secondly what’s happened to its share price since it was announced. Stock valuations are interesting, but far from definitive as indications of what companies are worth or who’s “winning” in any meaningful sense. Tesla’s stock price is all about trajectory, and an unusual (perhaps even unwarranted) amount of investor confidence and enthusiasm that the company which is currently very small and unprofitable compared to its legacy peers will quickly catch up on both fronts. That, in turn, requires believing in Tesla’s manufacturing projections, which require a massive increase in its growth rate, from 56% annual growth in the past year to something much faster to hit its 500k target for 2018, which would be a six-fold increase over its 2016 numbers. Long-term, it seems very likely Tesla will reach that kind of scale, but given its track record, there’s every reason to believe it will hit this and other related targets later than it has projected. On that basis, then, the valuation seems that much less justifiable on the basis of any near-to-medium-term results.
via Recode
Ford leads self-driving tech pack, outpacing Waymo, Tesla, Uber: study – USA Today (Apr 3, 2017)
This article is based on a study by a company called Navigant Research, and it seems to be an evaluating of companies’ strategic assets rather than any actual capabilities today, so it’s worth noting that context for their rankings of companies here. Notably, they rank traditional carmakers in the first six spots, with Waymo apparently the first non-traditional / tech company in the rankings. That’s notable, because all the numbers suggest Waymo is out in front in testing of autonomous driving technology in California by a long way, and although we don’t have equivalent data for Michigan, where Ford does much of its testing, I’d be surprised if it had done many more miles. So this is mostly an evaluation of the benefits the big automakers derive from their existing massive scale and capabilities in building vehicles and bringing them to market, something none of the pure tech companies has (Tesla, of course, has some small-scale manufacturing capability and is looking to ramp fast, but comes in 12th in the rankings nonetheless). This jives with my perception that, even as these tech companies do increasingly well in developing their own technology, they’re very unlikely in most cases to build the cars, and as such the traditional car companies are still in a position of strength and potential leadership when it comes to actually building and deploying the technology.
via USA Today
China’s Tencent Buys 5% Stake in Tesla – WSJ (Mar 28, 2017)
Tencent has been one of the most active Chinese investors in the US tech industry, and here’s another investment. It already has stakes in both Uber and Lyft, and although Baidu has been making bigger direct investments in autonomous driving in the US, Tencent’s indirect investments in transportation in the US are growing. This is a nice vote of confidence in Tesla at a time when it’s trying to raise money to fund the Model 3 manufacturing ramp, and it also gives Tencent decent exposure to what has been a nice growth stock so far this year.
via WSJ