Tech Won't Save Us - Can Tesla Survive Elon Musk? w/ Edward Niedermeyer

Episode Date: February 24, 2022

Paris Marx is joined by Edward Niedermeyer to discuss how Elon Musk got involved in Tesla, promised things he couldn’t deliver to raise funds, and where it goes next now that he’s becoming a more controversial figure.Edward Niedermeyer is the author of Ludicrous: The Unvarnished Story of Tesla Motors and a co-host of The Autonocast. Follow Ed on Twitter at @Tweetermeyer.Tech Won’t Save Us offers a critical perspective on tech, its worldview, and wider society with the goal of inspiring people to demand better tech and a better world. Follow the podcast (@techwontsaveus) and host Paris Marx (@parismarx) on Twitter, and support the show on Patreon.Find out more about Harbinger Media Network at harbingermedianetwork.com.Also mentioned in this episode:California is suing Tesla over “rampant racism” at its Fremont factory, with another Black worker suing the company earlier this week.Tesla vehicles are continually found to have very poor build quality, and customers report the service experience can be frustrating too.Tesla allowed people to play games on vehicle touchscreens while driving in December 2021 before being pushed to remove the feature.Tesla tried to automate parts of the production process that other companies had already tried to automate — and it failed too.The number of people being killed by cars in the United States is increasing — particularly among pedestrians.US auto safety regulators haven’t kept up with changes in vehicle dangers.The New Yorker reported on the problems in the early years of Google’s self-driving project.Last year a customer in China protested at the Shanghai auto show over her Tesla’s brake failure, forcing regulators to take a closer look at the company.Support the show

It's important to understand how many of the decisions at every point are built around that perception and that narrative that tech is just taking over everything. And so we just expect, well, it's just going to happen with cars next. Hello and welcome to Tech Won't Save Us. I'm your host, Paris Marks, and this week my guest is Edward Niedermeyer. Ed is the author of Ludicrous, the Unvarnished Story of Tesla Motors, and a co-host of the Autonomcast. And I also want to make sure that we include this disclosure that Ed also does communications for the Partners for Autonomous Vehicle Education, where he mainly handles content and education. And that is a group of more than 90 companies that includes major

automakers and companies that are working on autonomous vehicle technology like Waymo. But I will also note that Ed has been reporting on Tesla since 2015 and has been in this position for the last two years. And I trust his perspective on Tesla. And you also notice in our conversation, you know, if I feel that there are things that should be said about other automakers or other companies in the autonomous vehicle space, that I have no problem jumping in to add that. And Ed, you know, even backs me up in making those points and adds to it. So you might have noticed recently that Tesla has been in the news quite a bit. You know, obviously, it's nothing new for Elon Musk himself to be in the news. But Tesla has been hit with new allegations of workplace racism in recent months,

on top of the ongoing stories about what it's like to work at Tesla. And Tesla vehicles have been being recalled more and more often. So there is something happening at Tesla or maybe something has been happening for a long time and it's only now getting the attention that it deserves. And since Ed has been on this story for a very long time, has written a really good book about it, I thought this was a great time to have him on the show to finally have that discussion about Tesla itself. And so we don't necessarily get into those really recent stories because I wanted to have a broader conversation to actually dig into this company itself from its beginning, what we can learn from that, some of the big issues that have arisen over the years with Tesla and Musk's approach to the automotive business,

and also where things might be going next, both as many more companies get into the electric vehicle space, companies that have a lot more experience manufacturing vehicles and large quantities of vehicles, and also as Elon Musk himself makes an even more explicit transition as a political figure that is more and more associated with the political right wing, those right wing causes, you know, opposing taxes on wealthy people like himself, opposing regulations, opposing, I think, the government more generally, and many other things that align with a really right wing perspective, as well as, you know, being associated with people like Jordan Peterson, Joe Rogan, etc., etc.

So I really enjoyed having this conversation with Ed. I think you're really going to like it, and hopefully it will give you some insight that you didn't have before on Tesla and Elon Musk. Tech Won't Save Us is part of the Harbinger Media Network, a group of left-wing podcasts that are made in Canada, and you can find out more about that at harbingermedianetwork.com. If you like this conversation, make sure to leave a five-star review on Apple Podcasts or Spotify. You can also share it on social media or with any friends or colleagues who you think would learn from it.

And this episode of Tech Won't Save Us, like every episode, is free for everybody because listeners like you support the work that goes into making it every single week. So if you want to support that work, you can join patrons like Pedro from Stockholm, Drew Hitchcock from Colorado, and iCapulet of Teslac or TeslaQ, I'm not sure what's the right pronunciation there, by going to patreon.com slash techwontsaveus and becoming a supporter. Thanks for listening and enjoy this week's conversation. Ed, welcome to Tech Won't Save Us. Thanks so much for having me. It's great to be here. No, I'm really excited to chat. Tesla and Elon Musk have certainly been in the news a lot lately.

Not that they're a topic that is shy for media coverage, I think. We hear a lot about it. And you have written a great book called Ludicrous that really digs into the story of Tesla. And so I thought that this was probably a good opportunity to finally have that discussion and actually get into what Tesla is, how it came to be, the challenges that it faces going forward, and the influence that Elon Musk has had over it for so many years and how it's become key to its kind of myth and his myth as well. And so yeah, I think that there's a ton to dig into here. And so I wanted to start by getting some background information and some basic information for people who might not be super familiar with the story of Tesla, right? Because it has actually been around for quite a while now, even though, you know, it really took off and gained a public face or people really started to notice it more in the early 2010s and mid 2010s. So who was involved at the beginning of Tesla Motors? And how did Elon Musk get involved? And then I guess, what effect did he have on the company when he came in? You're right. I mean, Tesla Motors was

incorporated in 2003 by Martin Eberhardt and Mark Charpenning, who are two folks who had sold an e-reader to another company and made some money and that exposed them to lithium-ion battery technology, where that was. And Martin Eberhardt was the kind of guy who loved to drive, but also had some environmentalist leanings. And I think if you think about that time, he was definitely ahead of the curve. It's funny now EVs have become this huge thing in our culture. And there have been other sort of like mini bubbles almost in EVs in the past. And 2003 was a little early for that. 2008-ish was sort of when I think of the previous one, a little bit more peaking. But he was at this intersection of Guy in Silicon Valley with some money and some time on his hands and some hobbies, but also this sort of cause.

And so you see already here that sort of core formula of Tesla's identity and what makes it so resonant with so many people sort of starting to take place. But I think his partner, Mark Tarpenning, had also really had the insight on the marketing side. So Eberhard had really done the concept of the roadster and sort of the technical, like what is the product going to be? And Tarpenning had looked at the marketing. And there's a story about walking around Palo Alto and seeing Porsches next to Priuses and driveways.

And I've said before, but I think when you ask what is Tesla's greatest success in a lot of ways, it really is identifying that Silicon Valley, that tech culture have produced a lot of people with a lot of money and a very specific view of the world and themselves and their place in the world. And cars in our culture have just always been a way of reflecting power and status. And so, you know, in a way, the biggest failure that the traditional auto industry made in the whole Tesla thing, I think, is not identifying Silicon Valley and tech as this really amazing market for selling premium vehicles to, you know, in a way that really reflects who they are and what they are. But essentially, starting a car company, and this is

what got me into the story in the very first place, is like one of the hardest things you can possibly do. There's a lot of reasons why the industry has consolidated to a few massive, massive companies, and it's just scale is so important to manufacturing something as complex as a car. So these two guys had a lot of obstacles in their way. Kind of simultaneously to this, Elon Musk, he had started SpaceX. He was looking for other opportunities to do things, particularly in electric vehicles. Essentially what had happened is Elon and Eberhardt and what was actually Tesla at that time had converged on AC propulsion, which was sort of guys who'd come out of GM's EV1 program, which there's a whole lot of history to that's kind of too much to go into. But GM had really leaned on these California

engineer types. They weren't in Southern California, not Silicon Valley, but they formed their own thing. And long story short, they wanted to make an electric version of the Scion XB, which is a little like city, boxy little city car, which I have a personal soft spot for. But these guys all wanted to make sports cars because they were wealthy and they wanted that. And so AC Propulsion kind of put them together, said, we'll license the technology that we have to you. And Elon had money, basically. Elon had the shared interest in making an electric sports car. He had money. Eberhardt and Tarpening had a company and sort of like the start of a technical plan and a business

plan. And they kind of came together. And as often happens in these cases, the money kind of ends up taking control, right? And that's really a lot of what happened. I think that's a good basic foundation for people. But as you say there, with the money, I think that even in this early stage when Musk is coming on and getting involved in this company, you can kind of see aspects of what comes later, right? Because he's very focused on wanting to be in the spotlight. He quickly gets into feuds with the founders of the company. He has the money but wants to take credit for so much of what is going on. So can you talk about that dynamic and what it tells us about Musk and how he ends up approaching this as it progresses over a number

of years. Yeah, kind of the two big things that Musk showed that he cared about a lot early on were sort of being involved in the product design itself. And kind of, I think maybe to some extent, seeing himself as a little bit as a, you know, Steve Jobs kind of figure in having this Midas touch when it comes to like developing cars. And I think to the extent that he has been successful in that, and I think he has certainly in some ways, it's because he was making products for himself, you know, and for people like him and for people who look up to him, which I think that's a really interesting and, you know, important lesson. But I think over time also, that tends to, and we've seen this with Apple, although it's played out very differently with Apple because its smartphone business is so, so different than cars in so many ways, which we can talk about more if you'd like.

But when you have these people who are sort of like, I'm the one with the vision for this product, that's oftentimes where these reality distortion fields come from. And a lot of the focus of the company gets focused on one person. And that's how car companies were actually in the early days of the auto industry. It was these sort of wealthy guys with this vision for what was going to be good in a car. And they were not just ruled the factory like their fiefdom, but then also were their main pitchman in the public. And the car company was named after them a lot of times. And this is actually a little bit of a throwback in some ways. And the other piece of it that Elon Musk very early on showed was a priority. In fact, it was the first time that he really started to actually fight rather than sort of like disagree about specific engineering decisions and stuff with the founders was over publicity.

And I think that, you know, looking back, it was in 2006 when Tesla came out of stealth mode and they showed the Roadster and they let celebrities drive it and stuff. And New York Times wrote some stories. The first one didn't even mention Musk. And the second one kind of said, oh, he's just sort of the money guy. And we've had emails leak out of that. And he was just absolutely furious. And it was obvious, like, that was a really big, important part of it for him. What's interesting, I think, is that if you look at all that, it's easy to say, like, well, this was like a vanity project, right? There's been a lot of things that have

been like a vanity project. And I think what really sets Tesla apart is that these two pieces, this really focus on both sort of the design of the product and designing something that taps into the Silicon Valley identity, and then this publicity piece of it, there was a chemistry between these two that for the time and place where they came together, kind of went off. And I don't think Elon Musk at the time realized what that reaction was going to be in the sort of chain of events that was going to kick off. I think at some point, he realized and decided like, oh, I'm going to go with this and push this farther. But I think that no one could really have expected that volatile reaction to be what it's been. Yeah, I think it's a really good point to bring together

the tech piece and the publicity piece, right? Because I want to get to both of those. Because you talked about how Tesla very much tried to frame itself as a tech company versus an auto company, right? It wasn't a traditional automaker. It was learning the lessons of Silicon Valley and applying that to the automotive industry by trying to create this electric vehicle startup. So what effect did that have on the company and the way it operated? And I guess, were there benefits from that, but also what were the drawbacks? Yeah, I think this is really the main question I really tried to get at in the book, because you're absolutely right. Part of what drove the publicity piece, sorry, just to bring that in really quick, part of what drove it is this narrative that like, tech is not just transforming how we communicate with each other, and we store and share and process information, but that those capabilities are now pushing out beyond the traditional phones and computers and things like that out into more and more of the fiscal world with internet of things and all kinds of other things, right? And there's a really powerful narrative to that. And I think that's sort of the groove that in terms of the publicity that Elon

settled into and really was successful in really leveraging. That narrative is based on the notion there's a huge difference between a tech company culture and approach and a traditional industrial manufacturing company approach. What it overlooks is that the industrial manufacturing company approach has evolved over a hundred years of really intense competitive pressures. It's very easy to just say they don't do things the way we do, and therefore it must be bad, right? They move slowly, they're deliberate, they're conservative, all kinds of things. And I think what the story of Tesla, if you really look at it, it showed that the tech approach, the startup kind of approach, it has some real strengths. And I think the strengths have been in the design

of the vehicle in terms of being able to really prioritize the things that sort of surprise and delight and get the big numbers on the test and things like that. And really, and drive like technical accomplishments that we haven't really seen from others, right? But I think what's less obvious is the trade-offs from that. And I think that's because to see those trade-offs, you have to kind of go inside the company. You have to talk to people who are inside working at the company. And you also have to look beyond the short-term impressions. It's sort of the longer term, again, like the operations of the company, And you also have to look beyond the short-term impressions. It's sort of the longer term, again, like the operations of the company, but also even just the ownership experience for a lot of people. Because this focus on the creative aspects of design, and that's where

sort of we as a company add value and the manufacturing piece of it and the service piece of it is just sort of like drudgery work that we kind of have to just do because we're in this business. That's really like defined why they've been able to become so huge, right? They put all their resources into these impressions they've traded off all of the boring stuff that ultimately is really important to not just a company of this scale operating efficiently and capably, but then also for the owners that that first impression isn't everything, that beyond that first impression, that the durability of the car, the quality of its manufacturer, and the service and support down the line don't sort of continually just disappoint.

And so I think it's been very successful, this trade-off of taking this other approach. Those benefits have been really, really good in terms of building up this cultural phenomenon in a lot of ways. But I think that what it's running up against, and this is why I continue to be, even with Tesla's amazing success, kind of pessimistic over the long run. One of the main reasons is because, like the industrial manufacturing culture itself, our relationship to cars has evolved over time for good reasons as well. And there are good reasons that for a lot of people, cars are just an appliance. And the most important thing is that it starts whether it's cold or it's hot, and it runs whether it's cold and it's hot, and it lasts

a long time and things like that. And I think that in the long run, maybe if our relationship to cars is fundamentally changing, and we're going to have kind of more disposable cars, and we're going to turn through them quicker, but these trends and the status that comes with them and all that, if that's going to be the main way that people relate to cars, then yeah, maybe Tesla is set up to dominate the industry. Realistically, I think those values are also more effective in the premium segment. And I think that longer term, Tesla has real opportunities in the premium segment, but I think, and we've already seen it, making affordable cars that just do the job for most of us that most of us are looking for from our cars is where they've struggled.

And that's where the volume is, the scale is, which, again, is still the key to success in the auto industry. So that tradeoff, I think it's unresolved how it really all shakes out in the end. Yeah. And obviously, Tesla is a brand that also has a very environmental image. And if you're having a very disposable car, that kind of goes against that image, I think. But I do want to come back to the consequences of what that means for the vehicles themselves and the other things that come out of that.

But first, I do want to come back to that publicity piece, right? Because you talked about how, you know, and I think it's fair to say the media really kind of gravitated around Musk and really positioned him as this figure that was defining the future, building the future. He was on all the magazine covers, like this is the guy who's saving the planet, etc, etc. All of these really huge narratives that boosted up his profile. But then he also built on that, because you talked about in the book how around 2013, he also shifted from Tesla being an electric vehicle company to something where, you know, there were all of these major claims that he was making about what it was going to do in the future, all of the

markets that it was going to go into all of the benchmarks that it was going to meet that it continually failed to meet. But instead of admitting that those things were being missed or were failing, there was just a new promise that followed it to continue to build the hype and to boost the valuation. So can you talk about that aspect of it and that kind of shift, I guess, that happened around 2013 that you described? I think it's a really important one because it's not only defined Tesla sort of up to this day, but it's also had really broad consequences far beyond Tesla, I think, in our culture. So yeah, the reason the history matters here is because a lot of the things that have happened and a lot of the most important things have happened,

they weren't things that anyone set out to do. It was sort of like this chain of events that kind of eventually led to there. And it really is sort of this accelerating cycle. And it's one that we see in other companies as well. And I think really what it is, is that underestimating the challenge of building even just the first roadster, of getting that to the price point that they promised, getting them made, getting them to customers, all of that was way, way, way bigger than anyone realized. And like, that's the car business for you, right? Like, that's, that's just not that uncommon, but these folks did not have auto industry experience. And so from relatively early on, you know, Musk was starting to put in more money than he kind of maybe wanted to initially, and then had to bring in outside investors. And they kind of got into

this, you know, where you get behind the curve on this sort of treadmill of fundraising, where you start with, we're gonna do this, and then, oh, we don't have enough money to do that. And it's hard to raise money twice for the same thing. And so you have to come up with the next thing, use that money to pay off the last thing. And it gets into this dynamic and it starts small. And it doesn't start with like trying to be fraudulent,

but it can accelerate and build on itself from there because you have to then keep making the promises bigger and better and having your valuation be potentially bigger and better. And by the way, like this is all very common in venture capital. It's kind of what you want in some ways. You want the founder to be so ambitious that they're chasing something so big that you then want to like, you know, put more more money into. It's part of this relationship. And I think by 2013, Tesla had been public for a couple of years.

They'd gone through a number of financial crises and a whole bunch of things happened. They just launched the Model S. They're struggling. They kind of had to get that realigned. They'd actually looked at an offer to sell to Google and had a deal to sell to Google. And they ended up essentially borrowing money from the markets, paying off their government realigned. They'd actually looked at an offer to sell to Google and had a deal to sell to Google. And they ended up essentially borrowing money from the markets, paying off their government loan, which had saved them like two or three financial crises previous. And really, Musk went on this campaign where he was going to be in the media all the time. And really, that's where it went into what I call ludicrous mode. And. And it was like, you know, solar superchargers that are going to be zombie apocalypse proof

because they're off grid and, you know, self-driving. That was when they started talking about autopilot and self-driving and all these other things. And I think really what happened there was it was really just transferring what's sort of standard practice in venture capital culture into the public markets. And I think it was the first time that had been done. And I think that it took a while for people to realize what was happening there, even though the impact on the stock was immediate. Like in 2013, the stock, end of Q1, Q2 of 2013, the stock just starts going crazy.

And Elon Musk is there riding it and whipping it as fast as he can. And I think this has given rise to this sort of meme stock phenomenon that we now see with AMC and with GameStop and a bunch of other things. And I think it's really important for people to understand that the reason it hadn't happened before is that you can have certain kinds of relationships with accredited investors, right? Because they're sophisticated and they're risk aware or whatever, at least legally they're recognized as being in one class. And the public markets, average investors, they don't have the resources to understand self-driving car technology, just for one example, right?

And so it's very easy to kind of throw all this stuff at people, tell them it's going to be amazing. They don't know what to do. And this is where I think a lot of the Tesla criticisms, it's really important not to get too focused on this is about saying that Tesla's bad or recognizing that Tesla's bad. I think that that is important. We do need to do it. But by not acknowledging that, we've now created incentives for everyone else to kind of follow suit and follow their game plan. And I think we're starting to see that with meme stocks. And it's a very disruptive and very challenging situation because it kind of throws a lot of what had been sort of the rules of our system up in the air. And that can be exciting, but that can be scary as well.

One of the examples when we talk about the things that Tesla was doing when it was seeking money to fund its operations was the use of carbon credits as something to fund the business and to show a profit for a while because it wasn't making the money from the actual vehicles. And you describe in the book how there was this plan to have battery swaps for vehicles that never came to fruition, but because it was demonstrated that increased the number of credits that Tesla got per vehicle. And so it was able to make a lot more money and sell a lot more credits. Can you talk a little bit about that aspect of it? Yeah, so that was the thing that really brought me into the story. I'd written a few blog posts about Tesla before. And of course, Tesla has claimed that I've been, you know, having a death

watch of them since 2008 nonstop, which is absurd. It's a lie. But it was the battery swap in 2015 that really sucked me in. And I think what's interesting, one thing that's worth noting about that is it's another example of Tesla sort of taking these technological opportunities that actually have really transformative promise and therefore get kind of people excited, but then like forcing them into this traditional car business where they don't really necessarily make a lot of sense. For example, I got excited about battery swap at Tesla because I'd followed this company called Project Better Place, which was in Israel.

And there they would sell you a car without a battery. So it only cost $20,000 for an electric car, half the price. And then you would just lease the battery. And you essentially, it was like a cell phone plan and you would have like X miles. And instead of having to charge the car at home, you could do that, but you could also just drive into these stations and swap it. So it was a model that moved beyond your basic

traditional car. It was sort of a half-step arguably, but it was still that. And whereas with Tesla, they were clearly doing it for the subsidies, but then they were also just sort of spinning it as maybe like, you'll pay more to do it instantly. And it's like, you're just paying for the convenience, but really battery swap really changes things because it's like, imagine swapping your engine, right. And in your gas car, like you don't know how other people are treating their engine. Right. And it's the most valuable part of your car.

You're just going to swap it with people. If you own that car and you own that, like, and you'll see this more with, I think if you really look at how they're doing self-driving and, and, and automated driving is they're doing a very similar thing of taking something that could be very transformative and really pushing it into the car paradigm. But long story short, we could spend hours going into the arcane details of this ZEV program. But for me, where the rubber hits the road is that CARB, the agency that administered this program, their own staff were telling the board members, who by the way are political appointees, we're getting ripped off. Basically, Tesla's doing this thing. They're

abiding by the letter of the rule, but it's absolutely not furthering the goal of these subsidies, which is to advance this technology to be something that actually makes the experience better for users. And so it was intensely exploitative. And really, just the shockiness of what I saw when I confronted that, both in terms of like, you know, instead of opening the swap station, and instead of telling people who would do that drive regularly, that it was available to them, which they said they'd done, they just on a busy holiday weekend, put diesel generators with extra chargers out for people. So they still had the lines that the swap station could have helped them avoid. People were still frustrated, Their Teslas were hooked up to these generators with fumes going up in the air and stuff. And then when I went to the company, I asked them, so you claim on your website that you have this carbon impact. What is that number based on? Because I just saw very short tailpipes on a bunch of your cars.

And they're like, oh, yeah, we just assume that every time a Tesla charges that it's zero carbon. And I'm like, so you're lying. That's a lie. And that cynicism was what really prompted me to say, hey, companies that do something like that, they don't just draw the line there. There's more there. And so I started looking at their safety practices and a whole bunch of other things. And the mission is really important to that. The mission is what allows them to do these cynical things, even when those cynical things directly run counter to their mission, it's what justifies them internally. It's that

we're doing such an important thing and we're such a big deal that we don't have to play by the rules that everyone else has. And I think that when the ends justify any means, that itself becomes the end, right? The ability to do whatever you need to at that moment becomes itself the mission, the identity to the company. And I think that's what we've seen. And that's why we've seen some really awful things come out of the company. Yeah, that is an essential point. And I would argue we see the same thing with SpaceX as well. In service of going to Mars, there's a lot of things that are accepted or that they can get away with in putting out that big plan. But returning to Tesla, you talked about what that ultimately means for the vehicles then,

right? Because by focusing on this broader mission and by having this kind of tech focus that is not so much focused on the reliability of the vehicle itself, that has actual impact on the type of vehicle that then gets manufactured, its quality, its safety, all of those things. And throughout Tesla's history, it has had multiple experiences with what Elon Musk calls production hell, as it's been very difficult for the company to get the vehicles out. And then I think it's fair to say that corners get cut in order to get those vehicles out the door.

And then owners have a lot of issues. And this is a kind of recurring thing where people who review the vehicles, consumer reports, things like that, and just general users who are sharing this information together find that there are a lot of issues that other cars wouldn't have so many of because they do have these more streamlined manufacturing processes that are focused on getting out a good vehicle. So can you talk about the issues that creates with the vehicles themselves and how it seems like Tesla is increasingly facing more and more recalls or the possibility of recalls as there's a greater focus on these deficiencies in the vehicles?

Yeah, so there's a couple of things going on with this. So first of all, and I think what sort of unites it is that the greatest trick Elon has played on the public is convincing people that every engineering choice is not a trade-off, right? Like that there are good ones, which he makes, and there are bad ones, which other people make, but like there are not trade-offs to either of those.

And that's just absolutely not true. Everything is always a trade-off. And I think it's just a question of what you're optimizing for. And so I think at the design level, which we've talked a little bit about, but to me, the example of this that always just really clarifies it is the screen on the Model S, which is 17-inch screen. They're still to this day, I think 10 years after this car came out, I don't think there's other cars that have quite that big. I think we're getting closer there. I would just butt in there really quickly and say, I think it's fair to say that that has also pushed other automakers to embrace large touchscreens like that. And I am not so much of a car person, but I have driven a vehicle that has one of these big touchscreens

and where like a lot of the dials and options and knobs are put onto the screen. And I felt like it was less safe. And like, you know, by having to do all these things on the screen, you lost that tactile feedback. And so if you're doing any of it while driving, like you kind of have to look at the screen and away from the road and it feels really dangerous. Yeah. And I think, again, like I think knobs and dials and things like that

are in cars because that's appropriate to what they're doing, right? The fans will be like, well, Tesla's the iPhone of cars and these other cars are the BlackBerrys. And it's like, well, okay, but a BlackBerry is a phone. If using your smartphone involves the risks and the situational awareness and sort of other kinds of challenges that you have with cars and the safety critical nature of it, would you actually want the touchscreen rather than the buttons, right? And in fact, people love BlackBerrys in the day because they could be looking at something else and they could type touch, right? And I think that's a really important lesson is with cars, you know, when you're behind the wheel, this is the most dangerous thing you're going to do in most of your life, probably. If you want to turn up your music, you want to be able to

not have to look at it, touch that dial and just do it. I think that's one of the really important lessons for all of this. And let me just get back to the screen really quick, because that screen, the reason they put it in, it wasn't because Tesla had a better supplier. They were using the same suppliers as everyone else. They had no special technology. It was nothing. It was, we want the screen to be bigger than any car in there. Because again, it gets back to that, this is a brand that has to speak to technology people, to Silicon Valley, and it has to have those aesthetics that reflect that positioning. And so there wasn't an automotive grade screen that was big enough. And so they just put a non-automotive grade screen and then they've had all kinds of reliability and quality issues.

And so there, again, you're optimizing for the brand and for the perception and for the first impression, and you're trading off on the reliability, particularly in hot temperatures and other things. And there's all kinds of defects that we don't need to go into. But I think it's important to understand how many of the decisions at every point are built around that perception and that narrative that tech is just taking over everything.

And again, like the iPhone did that, right? And I think that's one of the reasons it's so effective is the iPhone did that. And so we just expect, well, it's just going to happen with cars next. And this car looks like an iPhone, therefore it must be better. And therefore it must just take over. And in reality, what I think we've seen now is that they're so married to that narrative that all of a sudden they're making decisions about things that don't make any sense at all.

And so the classic example here is let's let people play video games while the vehicle's in motion. Like it's the most obvious, easy thing. Like it almost seems like they're trolling the safety regulator. It's such an absurd thing to even consider doing. And maybe there is some, with Elon Musk,

you never know what exactly is going on underneath the surface for sure. Behind the tweets. Yeah. There may be some like regulator trolling for some reason, who knows. But I think ultimately it just shows that like, because their value as a company literally is as much tied to the stock price as it is to how people interact and use the cars and feel about the cars and what that ownership experiences is like, that I think just like anything that reinforces the impression that this is sort of the iPhone of cars and that there's this inevitability to the success of anything that is the iPhone of anything, they're so married to that, that they do things that just are totally indefensible and absurd,

like allowing people to play video games while the vehicle is in motion. So you have that. And then you also just have the issues with like manufacturing quality, just to answer your questions, because a lot of the defects and recalls and things that we've seen have come out of that. And some of that is exacerbated by optimizing for certain design choices. But a lot of that too, is that industrial manufacturing culture has over time, wasn't always, has over time, one of the ways it's evolved is to really recognize that like, it's a people business. It's a team sport. Making cars is a team sport in a way that startups,

startups are like a small team sport, startups are like a basketball team. And like cars, it's like not even like a football team. It's like a hundred football teams all having to work together. And, you know, I think you've seen Elon Musk try to like automate people out of the equation, right? Get people out of the equation, get people out of the factory, then fail, and now try them with the bot, and in between being like, humans are underrated. Yeah, humans are underrated is the lesson that Ford and GM learned in the 20s when the UAW was formed. And people started saying, and even before that, with the $5 day at Ford, when it was like, we cannot do this without people. And so weirdly, like the car companies are these big

faceless corporations. And part of what makes Tesla stand out is that they don't have these big personalities for the most part at the top. They're organized by, you know, run by committee and all these things that we kind of like instinctively are like, I don't really relate to that as a human being at all. But there's a very like almost humanistic subcurrent to the auto industry when compared, and to be very clear about this, when compared to this tech approach coming into the car business, I think it's something worth looking at and understanding. And I think it's fair to say that the traditional auto industry has had its fair share of problems

and controversies over the years, as it has tried to cut corners on safety and things like that many, many times. But in many cases, regulators stepped in and eventually did what was necessary to force them to be more safe and things like that. And I think that there's a wider discussion going on now about whether regulators have had their foot off the pedal for a couple decades, you know, as vehicle sizes have gotten larger, as the number of pedestrian deaths and vehicle deaths have increased. You know, there's a lot of issues going on here. And part of that is also seen in Tesla as well, as it has been able to get away with a lot of things that it may not have been able to had there been a different culture at these safety regulators. And so there are two parts

that I want to get to. I want to get to that regulator piece. But first, I want to ask you about the kind of elephant in the room, I think, the piece that is very frequently in the news, especially when it comes to Tesla and Elon Musk's kind of lack of focus on safety and disregard for safety in a way. And that is obviously autopilot, this system that Elon Musk started pumping up and talking about in 2013. You know, it was supposed to have arrived disregard for safety in a way. And that is obviously autopilot. This system that Elon Musk started pumping up and talking about in 2013, it was supposed to have arrived many, many, many times by now, but it's still a collection of automated driving systems that is presented as this fully autonomous driving system and is treated that way by a lot of Tesla enthusiasts,

some of whom have been injured in crashes as a result of this, if not died, unfortunately. But then there are also a lot of, I think it's fair to say, close calls and issues that are happening because this is promoted in a way that is not reflective of how it actually works. So can you talk a little bit about autopilot and what is going on there? Yeah. And just to be really clear about, you know, definitely the auto industry, there are no angels, right? And to me, I think one of the real frustrations is that Tesla showing that it is possible to come in and show different ways of doing things that it has really ended up just sort of orbiting the stock price. And, you know, all of these compromises are made rather than sort of saying like, Hey, wow, like new things

are possible. Like, how do we do that in a more like healthy kind of way? So it's not that one is bad and the other is good. It's that it's really frustrating that we're, we have all this excitement about a new way of doing things and that the incentives are actually exactly the same. So autopilot is really important. And again, I think that like, you know, when you look at Tesla as a car company, which is how I originally started looking at them, there's a lot of good that they've done and a lot of just pushing the

industry at all. The industry was complacent and they needed someone to come in and to push them. And they did that. But I think when you look at just their driving automation piece of it, which is now the part I kind of tend to focus on more, it's almost all bad. And I think we mentioned in 2013 that they had to deal with Google. So Google had been testing like immediately prior to that. In fact, in December of 2012, they decided not to take this product to market that they called Autopilot.

And they had this like, you know, Larry 1K or whatever, they did a thousand miles on public roads all over California, all kinds of different circumstances. And it was a level two system like Autopilot where you had to have that human behind the wheel. And actually, you can see that video on Waymo's YouTube account. And frankly, it's better than the stuff you're seeing from Tesla on the road today. And this was back in 2009, when they did that Larry 1K. But then they tested on their employees, and they found people just were not engaged. And when you add this sort of automation, but you're still in control, and you're still responsible for everything that happens. Like, it doesn't matter how much you tell people that they just they stop paying attention. And basically, Google had done this internal

testing, and they had people eating and putting on makeup and using their phones or whatever. And they said, we're not going to do this. And then Elon Musk was like in negotiations to be bought by this company, those negotiations end, and all of a sudden, he's like, we're going to do this thing called autopilot. And it's like, okay, like Google decided not to do this because it was so invested in the technology. Again, it's not just that Google is, they're good guys, right? Like, and it's also not that by the way, there aren't ways that you can't engineer these

systems so that the human does stay engaged. I think it's also fair to jump in at that point as well and say that everything wasn't perfect with Google's attempt either, right? You know, as you had Sergey Brin, you know, talking up the potential of autonomous vehicle technology back in, you know, the early 2010s, you also had the team who was behind it. In particular, geez, I can't remember his name

off the top of my head. Anthony Lewandowski. Yeah, Anthony Lewandowski, who was also cutting corners and who was doing things that were dangerous, you know, and that came out in a New Yorker story in particular, I believe it was a number of years later, you know, about how there were crashes that were not reported and all of this kind of stuff, right? So Tesla is one that has kind of kept this really unsafe streak as it has been developing and pushing this technology. But I think early on, we can see that a number of those companies didn't always have safety top of mind as they were trying to develop it and being the first ones.

100%. And this is why actually this contrast is so important, right? Because what we're talking about here is we are talking about the tech sector that has lived in this virtual world where even there, there have been all of these consequences of the things that they made and created that they didn't think through and created all kinds of really bad things

or contributed to really bad things. And obviously there continues to be reckonings around there, but what we had here was, and it's interesting, companies moving out of that into the real world and specifically moving into the real world on public roads, like shared public space and developing safety critical systems.

And I think this is a really important piece because I think there's still a lot of lessons here that people haven't necessarily taken away. Fundamentally, if you think about autonomous vehicle technology at all, the fundamental tension of it is that on the one hand, you have to use probabilistic inference, which is a word I like to use for AI or machine learning, because I feel like for me, it gives me a little more traction in what's actually going on there, probabilistic inference on the one hand, and the need to achieve a safety-critical level of performance, which means ideally 9.99% in a row, not making errors or not having failures.

And there's a huge tension there, right? Because you're doing probabilistic inference on the one hand and 99.99% certainty on the other. That's what makes this technology a really hard problem. And I think what you saw is if we go into the space where the consequences are really immediate and real and human lives and impossible to ignore, I think is kind of the critical piece. Some of the online stuff, it's second and third order effects stuff where they can either say it's not our fault or not a problem, whatever. But when you're talking about people dying on the road and their

blood, there's a visceral nature to it. And I think seeing how these companies reacted to that is important and interesting. And again, with Google, it's not just that they're better people than the people at Tesla. I think it's more that they had a deeper investment in the technology. They'd gotten into that technology heavily faster earlier than anybody else in the private sector. And I think they saw that if we take shortcuts that lead to people dying in these vehicles or lead to bad outcomes, that that erodes the trust that we need people to have in this technology for this to eventually pay off for us. I think it's a self-interested thing. They also had the benefit of not needing it to produce profits in the short term, right?

Because they make all their money from search and ads. A hundred percent. And for Tesla, it's always been a way to sell more cars. And so it's always served that end. And so if people die along the way because you took a system that you either knew or could have just asked Google where you got the idea, like, what are the things we should be watching out for with this kind of thing?

There's just none of that. And so I think, yeah, again, when I focus on Tesla or contrast it with others, it's not to absolve anyone else and say Tesla is the sole root of bad things in the world. Like, if only, right? If only. But I think it stands out in its cynicism

and its willingness to risk and sacrifice human lives for, again, not even something that is a sustainable thing that is necessarily always going to be with us, but for this very fragile perception that is measured by the stock price. And I think that it just speaks to a level of cynicism that is really scary. a correct assessment that a lot of safety regulators have not been placing the focus that ought to have been placed on Tesla and on autopilot in particular in recent years. And it seems like that is starting to change now with the number of recalls that have happened, with the changes at the regulators in the United States, the new people that have been brought on. It seems like they're finally waking up to this. So can you talk a little bit about the importance of that safety regulation

piece and what seems to be happening there? You have to start from the baseline that auto safety regulation, when NHTSA was first created in the 70s, there was sort of this explosion. You had the Nader's Raiders going on. You had a lot of things sort of coming together to kind of like really give some energy to auto safety regulation. And like a lot or most, or some might say all regulators, over time that energy sort of dissipates and other influences start to come in. And it's less that there's a proven record of outright corruption. It's more just sort of like everyone kind of wants a regulator that to paraphrase Grover Nor norquist you know you could drown in a bathtub kind of a thing right like they do what they need to do to kind of keep things up but like i think it is kind of in the industry's interest to just not have it be really

serious and not to necessarily have a lot of energy to it so you have that as a baseline and so and we have every 10 years or so we have big scandals and some of them are bigger than others and some are better understood by the public than others and whatever. But fundamentally, they all happen because NHTSA isn't just not on top of it. And a lot of it is they're undercut by just, it's a self-certification based system. So there's a lot of trust in our regulatory system, which has certain advantages and certain disadvantages, right? So you have to understand that baseline to understand that now you have a layer on top of that where Tesla doesn't play by any of the rules. And I don't just mean that in terms of like they break the law.

I mean that in terms of like all of the assumptions that are baked into the regulatory system aren't necessarily true for Tesla. So, for example, you know, one of the key points is that there's dealership. There's a third party sort of in between the manufacturer and the customer. Right. You have the dealer in the middle. That actually limits the manufacturer's ability to hide things from both the customer and the regulator because they have that third party. Yes, they have a strong relationship with the business, but they also have a strong, they depend on those customers and they have to keep those customers and they're separate companies, right? Whereas Tesla, by having all their retail in-house, they're able to do things without

the regulator ever knowing, or even maybe the customers really even knowing for sure what's going on. And so that's huge. The over there update thing is huge because then Tesla can start to make changes with cars that they don't even release a technical service bulletin, let alone a recall notice on and stuff. And so Tesla is just hard to regulate because they're just structurally and operationally so different than the other manufacturers. And by the way, we don't really have a proper regulatory system for automated driving in this country. But to the extent that we do, Tesla is completely able to break it before we even really have it by telling regulators on

one hand, their system is level two. And so it's driver assistance. And so it's really just people with some assistance features on them. But then on the other hand, they're selling to customers as full self-driving some of these things. And without getting into all the details of how it works, as regulators, you have to treat those things very differently, right? Because a level two system, you treat it just like any other driver. Whereas a truly automated system is something fundamentally different. Doing things differently just adds to their appeal, right?

And so like having over-the-air update capabilities is one of those talking points that's just like, oh, this is this fundamentally good thing that just makes them better than other car companies. But at the same time, that same thing is also helping them evade and whatever. And like one of the first big stories that I did about this that gets to the heart of it, because it shows why Tesla does all this stuff. The regulators are almost like an afterthought when compared to what the real goal of all these things are, which is controlling information because they live and die on the perception. And it's because of Wall Street, right? The perception is what they live and die on Wall Street and everything flows out of that. And so they were using nonondisclosure agreements to prevent people from reporting stuff

to the regulators. It wasn't that they thought the regulators were going to really fundamentally screw up how they do their business or their ability to make a buck or anything like that. It was that the word recall was going to cause the stock price to go down, and that potentially everything can just sort of crumble once that starts happening. I do think, by the way, this was exacerbated under the Trump administration because of a general like hands-off approach. And I think that's starting to change. And I think that like the first thing the Biden administration has done around automated driving is require reporting of data around crashes when both driver assistance and automated driving systems start. I think that's going to build up the data that then allows them to create firmer regulations,

but even that, that's going to take some time. And so we're still dealing with a regulator that is finally starting to do something, but it's still going to be a slow kind of steady methodical process. That's a really good description of the issue that we're facing when it comes to the recall issue and the auto safety issue. And I was going to bring up the NDAs if you didn't. So I was happy you brought that in. But I have two final questions to end our conversation, both looking at the company itself, but also, you know, I think the wider mythology around it created by Elon Musk, right? And so first of all, Tesla at this moment, still, I think it's fair to say struggles with producing those vehicles efficiently in the way that other automakers would, even as it expands production to China, to Europe, places like that. And at the same time, a lot of other automakers are really pushing heavily into the electric vehicle space now, you know, launching lines of electric vehicles that are going to be available now, if not, you know, in the coming years. So what does that mean for Tesla moving forward? Is it going to face a lot of difficulty

as it has a whole range of new competitors? Or does this potentially open it to reaching a wider market as you know, electric vehicles become more common? It's a really good question. And I think I think the main thing is that it's going to take a while for that to all shake out, A. And B, there's gonna be different answers to that question in different places, right? And this is actually one of the really interesting changes for cars is that cars have been a global business. And there have always been variations from market to market, but there've also always been some commonalities. And I think the key factor is that electric vehicle demand and markets, there are definitely some organic shift in the market towards it. In this country, it's almost all at the high end in the premium sort of luxury segment.

But really, a lot of it and one of the reasons the markets are evolving differently is because it comes from policy. Right. And so policy in China and policy in Europe and policy in the U.S. is all very different. And so I think, you know, to answer some of those questions, you have to look at where you're talking about. So I think in China, you know, China has the kind of strongest like mass market, both potential and actual. And so I think there, you know, the struggle is getting the cost down for Tesla. And I think that's just a really, really tough challenge for them on so many levels.

Just their culture is just not aligned around making basic, reliable, high quality things. And by the way, people don't appreciate in the car business. That's the hard thing to do. I once had a fascinating dinner with the chief engineer of the Lexus LFA, which is this carbon fiber V10, just like insane vehicle. And he's like, I can't wait to go back to doing Corollas and like Yaris's because like, that's the hard stuff. That's the really hard thing is making affordable, basic, reliable, high quality stuff. And by the way, customers are more demanding in that, in that segment also, because they rely on that thing. That Alexis, if your LFA doesn't start, you know, whatever, like, you know, you've got 20 other cars to take. So I think Tesla really will struggle as a mass market thing. I do think the

tech premium vehicle market started in Silicon Valley in the US, but I think there's many more people now around the world who see that as part of their identity. And so Tesla has resonance for them in China, in Europe, all over, in India, certainly all over the world. And so I think Tesla definitely has a very strong potential as a premium, not even just niche, but pretty decent size premium, sort of a BMW or something like that. But I think there are big, huge questions in the US, like, are we going to really see a mass market, EV market sort of show up here? And then also, I think there are questions too about the customers about how durable is that brand appeal versus over time, do people just

get sick of having to have the thing in the shop? And I think that answer is different for different people. Some people value prestige and things like that. And some people really just need that practical piece of it. So I don't see Tesla becoming like this giant dominant player, but I think that they have definitely a niche that they can occupy for a long time if they play the cards right. Yeah, two really interesting things that you say in that answer is, first of all, the importance of policy in creating these electric vehicle markets and how for Tesla to have this success, even the success that it's had, has largely relied on government policy, on subsidies, on loans to the company and all of that, which was really key. And then again,

looking at what might happen in China and other markets where you really do need that lower cost, reliable electric vehicle, which is not so much what Tesla makes and has really struggled to make, even though that was its initial goal. I think it was last year, there was someone in China who made a big scene at an auto show because she had a Tesla and it was like just terrible, like the quality and it was not what she was expecting. Right. And so I think that you might see more of these things, especially as it reaches a market, as you say, that needs that reliability, not just the prestige that comes with it. And so in saying that, then when we also look at Tesla, we see in the past couple of years, its valuation has soared even more to astounding

levels, making Elon Musk the richest, if not one of the richest men in the world. And as that has happened, I think Elon Musk used to have this reputation, as we were talking about earlier, as this guy who was, you know, the environmentalist going to save the world, associated with really kind of progressive issues and progressive people who had embraced him. And now he is increasingly close with, you know, people on the far right wing in the United States, pushing COVID conspiracy theories. There, I think, are a lot of questions about who he is and what he actually represents. So what do you think that Musk means for the future of the company? And will he alone be able to keep pushing it forward in this way that he has been able to for the past of the company? And will he alone be able to keep pushing it forward in this

way that he has been able to for the past decade or so? It's a fascinating question. And you know, it's so hard to separate Elon Musk and Tesla at all. But I think you put your finger on something because I think in some ways, Elon Musk is this very pivotal figure in Silicon Valley and not in Silicon Valley itself necessarily, but like how Silicon Valley sees itself and what its values are. And again, like I think he got that position by sort of leading this move like out from just software and computers, like out into, you know, really living up to that vision of, you know, tech's inevitable conquest of everything. He's the avatar of that in a lot of ways. And so I think there is a lot of significance that inside the tech sector people put in him. And I think the sort of political shift that you're describing, I mean, I think a lot of that is for him personally, probably, and certainly in the context of Tesla is probably expedience. Speed is is his number one thing, right? Like going fast, doing as fast as possible. And like anybody who holds things up is just a pain. And so it's

inevitable that everything from unions to environmental regulations to all these other things like are just going to be these things that annoy him. And I think that's been a big part of him sort of shifting in the direction that he has. But like, he's also not alone, right? He's also got this other group coalescing either around him or adjacent to him that is sort of articulating sort of new visions for Silicon Valley role as sort of, in a lot of ways, more of the arbiter of power. They kind of see themselves as having gained so much power, I think, that it's sort of like, okay, now it's our turn to like, establish that structurally more and certainly culturally as well.

And so I see him as being part of something much, much bigger there. But I think like everybody else, and like I told EV advocates and fans and sort of evangelists years ago, there's a lot of benefit to be had from having Elon Musk be your spokesperson, your figurehead. But there's also a lot of risk. He is the most risk tolerant person ever. And if you look at a lot of his decisions around taking autopilot to market or whatever, a lot of things, these are things that any company could have done. And either out

of personal sense of responsibility or like risk intolerance, or whether it was lawyers having enough power within that company to say like, no, we're just not doing that. Like he's been able to overcome that. And it goes back to PayPal, where he was like giving away credit cards, and they had default rates that were like many times everyone else. So he sees risk as being one of his main competitive strengths, risk tolerance. And so I think that like, to the extent that he does increasingly become a political figure, it really introduces some potential randomnessness because there's all kinds of things that could go wrong at any time. And I think one of the things that people forget on the valuation side with Tesla is that being risk tolerant means you create these ticking time bombs all around

your business. And I think full self-driving and autopilot, there's regulatory risk time bombs, there's pissing off customers who will never come back to you again, then time bomb. There's all kinds of things and they're all going to kind of maybe go off at different times, and maybe some will never go off. But I think Elon Musk has those risks culturally, as well as in terms of how they relate to his business as well. And so I think that's going to attract people, you know, and it's gonna attract certain kinds of people because they want the dynamism and the platform and the power that he has in our society and how we do things. But I don't think he will ever be free of risk. I think he will always have risks around

him. And I think he will always escalate those. He has always escalated those risks, especially over the last 10, 15 years. And I think that you get too comfortable with risk and the same thing always happens. And it's always just a matter of time. Yeah. And I think as you're saying about the time bombs, that's what makes it difficult to predict when that might actually happen and when it might actually go off. Ed, it has been great to speak with you. It has been great to get your perspective on Tesla, the years that you've spent following this company and what has been going on with it. I really appreciate you taking the time. So thanks so much. Absolutely. It's been a real pleasure.

Edward Niedermeyer is the author of Ludicrous, the Unvarnished Story of Tesla Motors and a co-host of the Autonomcast. You can follow him on Twitter at at Tweedermeyer. You can follow me at at Paris Marks and you can follow the show at at Tech Won't Save Us. Tech Won't Save Us is part of the Harbinger Media Network and you can find out more about that at harbingermedianetwork.com. And if you want to support the work that goes into making the show every week, you can go to patreon.com slash techwontsaveus and become a supporter. Thanks for listening. Thank you.