The business is doing fine, they’re profitable and regularly beating various targets. Honestly I think Elon is more level headed than people give him credit for, his companies are consistently profitable and generally produce competitive products.
I'm interested to meet someone online who's short both on-shore US silicon fabs and the market for humanoid robots. Can you say more about your thinking?
Musk is similar to Zuck in that they get some credit for sheer courage to turn the wheel on their massive businesses, but they also have to be right. Aside from his anticompetitive behavior, Zuck continues to miss. Musk's pattern has been that the more Musk is personally involved, the worse the outcomes. Cybertruck was his baby. Optimus is his baby.
If Tesla is doing so well as an automotive business, then why doesn't he just continue making it a great automotive business?
Maybe a mid length answer is if you agree with his assessment on say humanoid robots in terms of market and you believe they might have a geometric growth factor in production (eg robots can make more robots) then you’d want that business build out done by a team that can scale rapidly.
For fabs spacex and Tesla are significant consumers of the output- vertical integration is preferred by lots of companies.
Correct, and I think having a CEO who's totally unaccountable to a board and is temperamentally unable to focus on his core business is not good.
SpaceX and Tesla are nowhere near large enough consumers to justify vertically integrating a fab. The demand is predicated on Optimus producing millions of units per year.
This circularity will probably end up being seen in retrospect as so transparently absurd that it'll beggar belief that anyone accepted it.
That said I think these bets will pay off. Let’s check in in five years!
Do you have particular predictions we can evaluate in five years?
2) more than 1mm optimus produced and sold in the US
Happy for any counters :)
1MM Optimus sold in the US is hilarious too.
Want to make bets on these?
My prediction is Musk will become less and less stable, more and more flamboyant and performative, and less and less effective.
He's already saying he suffers from occasional AI psychosis, and there is no chance that's going to get better on its own.
Terafab profitability is really tough to get right, I'm open to ideas -- there's operating profit, operating profit net of amortization / depreciation, there's like six phases of the terafab specced out running through 203X (and as you say, slippage is inevitable there). I'd want to be considered a winner if the value of the EUV machines is up significantly, e.g. it was a balance sheet winner.
Send proposals.
I'd bet that in 5 years time Optimus total sales are in the 10's of thousands at best, with few to no large scale industrial users (other than self-use by Musk). Customers will be similar to what AgiBot and Unitree currently have - entertainment, hospitality, academic, small scale trials, plus a few Tesla fanboy sales that don't do anything actually productive.
If Optimus is in use at factories in 2029 then it will absolutely be able to produce more than a thousand robots a month by the end of 2031, just using any sort of geometric production curve as a swag.
As to users, I think if it can provide home services, they're going to sell a ton of them.
As to Elon's forecasts, yes, double them at least. And, also, he's mostly right historically, if delayed substantially. I think there's near infinite demand for $1/hr robot labor in the US.
And yet… when it’s Elon Musk’s company, we are suddenly all numbers and figures, and we waggle our fingers disapprovingly that he doesn’t have board approval. Yes, with Musk you have a childish huckster asshole. And increasingly it does appear he’s gone off the deep end, buying into his own self mythology. But the one redeeming quality he still demonstrates is refusal to settle for doing the same thing over and over. He continually and unreasonably pushes the envelope.
Tesla has definitively become a successful company. They defied all the naysayers in reaching that success, and it has turned into a global behemoth. They have oodles of money. The fact that Musk tirelessly insists on trying new moonshots that seem ridiculous is a GOOD thing - it’s the thing we _lack_. Inventive, audacious risk-taking is exactly what our stupid extractive scam economy lacks. Compared to you and me, yes, Musk is a cringey edgelord with the energy of a weird kid at the sleepover who tells bragging lies. But compared to his cohort who run large businesses, he is a goal oriented doer who attracts great talent and then relentlessly pushes them to achieve the impossible. And they actually succeed some non-zero amount of the time. It doesn’t matter that not every idea is a winner. That’s not how moonshots work. The point is that _some_ moonshot ideas do work though and actually move us up the tech tree. And the probable reality is that the delusional unrealistic asshole _helps_ push you there, precisely because they cannot be reasoned with. No, you cannot build moonshot companies without grandiosity, because the people working on it need to have a mission that is bigger than dollars and cents or common sense. If the only thing pushing you is good financials, you will quit as soon as “projections” start to look bad. In the area of moonshots, projections are just the opinions of uninformed non-believers who will ALWAYS mount until the world convinces you to stop working on the “stupid” thing.
All that said, the flying car is the dumbest thing I’ve seen him push and I don’t find it remotely exciting. Self-driving and robots are way cooler.
However, the root of this conversation is not about Musk at all but about whether Tesla's core business (automotive) is in trouble. The answer to that, as Musk is demonstrably convinced as well as I am, is "yes."
Then we get into Musk's own personal idiosyncrasies and to what degree they're a liability or an asset to pull Tesla away from doom. For the reasons you mention, they're an asset. Not many leaders are willing to throw the wheel like he is (Zuck being another example). For other reasons, his idiosyncrasies are a liability. Like the fact that he personally was single-handedly responsible for destroying huge amounts of Tesla's brand power and that his personal project (the Cybertruck) inflicted such gargantuan direct and indirect cost on Tesla at such a critical moment.
Again, the question is whether Tesla's core business is in trouble. The answer is yes. Nobody remarks that it's such an incredible thing that a CEO of an unambiguously crushing-it company is willing to yolo the company into new directions.
Point being: phrases like 'rationalization' and 'wishful thinking' exist for a reason. You should be extremely skeptical of how fairly you are assessing the prospects of a company run by people you hate. You are almost definitely interpreting the outlook uncharitably.
Late stage capitalism was coined over a century ago. It still hasn't happened.
What does happen, however, is a company will grow until it strangles itself with committees and bureaucracy. And then gets replaced with a younger company. A good book on this is "The Innovator's Dilemma".
The only new western car company in decades to not fail, based on a technology nobody believed in at the time, least of all other car companies
SpaceX being a private space company, which was completely unheard of. No experts though they could succeed
Smaller earlier businesses like Zip2, paypal, etc
These are gigantic high risk companies with high failure probabilities, the chance they they all happened to be successful despite Musk and not at least in part because of him is stretching reasonable doubt for me.
I'm absolutely no fan of his politics or personality, but the man can run a business that nobody else even dares try (at least until he demonstrates viability and the market starts to generate competitors)
Of course it’s still early days for all these companies and they’re not exactly fiscally solid, but if Tesla had not made all those cars, someone else would have.
Three sucesses.
Not so successful: Solar City, Neuralink, TBC, X.
(X exists, but before it was valued-and-bought by one of Musk's other companies, it appeared to have lost about half its value).
Richard Branson he aint.
They put out this video of a patient with ALS regaining the ability to communicate.
Hard to see that not being successful, once it passes the FDA, assuming it's real.
The main problem isn't even the tech, though the tech isn't as good as it seems either.
Their main advance hasn't been the BCI: other teams also do this, main limiting factor is product lifetime rather than electrode count (though yes their count is higher).
The surgical robot is a much more interesting thing than the BCI. But even with the robot, "interesting" rather than "amazing" because (1) what else can that robot do? (2) what does it cost to use? (3) was it reliable enough for humans, or the reason for all the animal welfare issues? (4) some other BCI teams working on delivery via blood vessel and less invasive is better.
Main thing though for any sucessful medical tech is cost. Even with FDA (or non-US equivalents, somehow I don't even know the name of my local equivalent), medical interventions are famously expensive enough in the US to bankrupt and insurance in the US is famously reluctant to pay the full costs.
And up a level, the problem with Neuralink is their output suggests a lack of care to detail, of emphasis on speed over quality, and of having inherited Musk's personal attitude problem when faced with criticism.
Hyperloop was a tech not a company and if I listed every tech he's done wrong I'd be rightly accused of misunderstanding how R&D investments are necessarily gambles.