With a grain of salt
e:
It’s fair to say that for the most part, people have become accustomed to Elon Musk talking smack and getting ahead of himself. This week his penchant for outlandish statements reached a new high — or is it low? It’s hard to differentiate, really.
Musk, during an hours-long investor day presentation on Monday as he unveiled a new microchip for driverless vehicles, said he expects the firm to have at least 1-million self-driving “robotaxis“on the road by 2020.
Said “robotaxis” will have full level 5 self-driving capabilities — this basically means that these cars will be capable of driving themselves anywhere, under all possible conditions, with no limitations. That’s overdoing it. For one thing, there are no cars on the road today that are level 5. Current Tesla vehicles are only level 2.
The billionaire entrepreneur went on to predict a world where Tesla owners could wake up and push a button to send their cars out into the field for pickups. This scheme, he said, would operate on a model similar to that of Uber or Airbnb, and Tesla owners would be able to rent their cars out for an additional income of as much as $30,000 a year.
He compared buying a regular, gas-powered vehicle in 2019 — instead of an autonomous one — to someone buying a horse instead of a car in the early 1900s.
“It is fundamentally insane to buy anything other than a Tesla,” Musk said. More than 60 companies in the
Musk has a history of setting deadlines he can’t meet and making predictions that don’t come true.
Tesla has been working on a selfdriving chip since 2016. Musk previously forecast that its cars would be fully self-driving by 2018. He once forecast that Tesla would make 500,000 cars in 2018; it produced half that many. Don’t get me wrong – his ambition is impressive, visionary even.
It’s just that more often than not it doesn’t translate into profitable products and services, and naturally this has financial implications.
The latest presentation comes two days before the financially stressed electric car company is expected to announce a quarterly loss on fewer deliveries of its Model 3 sedan — vehicle sales fell 31% from three months ago. When asked how much autonomous technology is costing Tesla, Musk’s response was this: “It’s basically our entire expense structure.”
He said: “We aim to be cash flow neutral during the fleet build-up phase,” before adding that Tesla would be “extremely cash flow positive” after that. Musk’s autonomous car woowoo is cash-intensive — and Tesla doesn’t have enough cash.
It ended last year with $3.7bn, but in March paid off a $920m bond. With a $9.4bn debt pile, its next big payment is a $566m debt issue due in November. Tesla will have to shore up its balance sheet. Meanwhile, dear reader, I’ll leave you with this gem from Musk, circa October 2016:
“By the end of 2017 a Tesla will be able to drive in full autonomous mode from Los Angeles to New York, without the need for a single touch on the wheel.”
Nope. Didn’t happen either.