BBC Dialogues: Elon Musk’s Ludicrous Plan for Tesla

BBC Dialogues: Elon Musk’s Ludicrous Plan for Tesla

By Alison van Diggelen, host of Fresh Dialogues

Elon Musk continues to make ambitious plans for Tesla Motors, some even call them “ludicrous.” Not content to make a niche product for electric vehicle enthusiasts, he now wants to conquer the mass market, competing in the major leagues against GM, BMW, Ford et al. Musk is promising an annual production of 1 million cars by 2020, a staggering increase from last year’s paltry: 76,000.  Is he insane?

On a conference call with Musk and media colleagues this week, I learned that Musk is still calm and laser-focused on executing his “Tesla Master plan.” This year is crunch time for Tesla. The future of the company rests on the timely and efficient production of the Model 3, Tesla’s smaller, mass market car. Will demand stay strong, despite intense competition and reservation holders threatening to cancel due to his position on Trump’s economic advisory team? Musk seemed to flounder a bit on this question and refused to disclose the latest reservation numbers, for fear of analysts “reading too much into them.”

During the discussion of  Tesla’s 2016 financial results, some anomalies arose.  Despite continuing to make massive losses (due to capital investment in the Tesla Factory and the Gigafactories), its share price is still in the stratosphere. Tesla might produce a small fraction of GM and Ford’s output, but the company is valued on par with them. What gives?

“The recent run-up in Tesla stock has less to do, in our view, with anything around the near-term financials, and more to do with the nearly superhero status of Elon Musk,” Barclays analyst, Brian Johnson.

Superhero status? More ludicrousness…The superheroes Tesla is focused on are the mighty robots on the factory floor. Musk has named them after X-men superheroes, like Cyclops and Thunderbird (see photo above); and they’re the ones that’ll have to earn their superhero status as manufacturing goes into top gear in the next few month.

“Tesla is going to be hell-bent on becoming the best manufacturer on earth.” Elon Musk

The BBC’s Fergus Nicoll invited me on Business Matters to help explain more.

Listen to the full podcast on BBC World Service (starts at 37:30) or the 5 minute clip below:

Here’s a transcript of our conversation (edited for length and clarity):

BBC Host, Fergus Nicoll: Tesla stock has hit record highs, soaring 50% since December. With investor confidence growing that Tesla will deliver its Model 3 on time. Let’s explore this with Alison in Silicon Valley. Before we get into the nitty gritty of Model 3, and the other numbers, I know you watched Elon Musk do the webcast that go with the Q4 figures. What kind of presentation did he come up with?

Alison van Diggelen: I listened to the (live conference call) podcast. Elon Musk was on the podcast with his (retiring) CFO, answering questions from the media. They were generally upbeat. Elon Musk always over-promises how soon his vehicles will be delivered, but he is confident that they’re going to start deliveries of their Model 3 in July of this year, for employees first…beta testing for employees. He’s hoping for the mass rollout starting in September of this year. They’re pretty bullish about that.

Fergus Nicoll: Here’s the thing: Tesla has a valuation pretty close to Ford. But compared to Ford it makes about five cars! So what are we seeing? A massive future priced into that?

Alison van Diggelen: That’s right. Last year, Tesla delivered 76,000 vehicles (compared to Ford’s 2.5 million), but Elon Musk is very bullish. He’s aiming for the factory to produce 500,000 cars by the end of 2018, and one million a year by 2020. He’s ludicrously ambitious. Brian Johnson, who’s an analyst with Barclays, called this run up in the Tesla stock more “Elon Musk superhero status” than short term financials. What Elon Musk says, he often delivers….eventually.

Tesla merged with SolarCity, the rooftop solar provider, so that is also giving an upside. They’ll be able to cut costs: Tesla showrooms will also become showrooms for the SolarCity solar panels. They’re also doing the other side of the equation: energy storage….

Fergus Nicoll: The household and business batteries.

Alison van Diggelen: Exactly.

Fergus Nicoll: The thing is, Americans drive insane distances. Electric cars have to go a long way….the infrastructure has to catch up with the company?

Continue listening to the podcast clip above, or at BBC Business Matters for more about:

The ambitious supercharger network expansion

The fact that all cars will be equipped to be fully self-driving

Why the market continues to bet on Elon Musk

***

For Tesla to succeed in becoming “the best manufacturer on earth,” three big questions remain:

  1. Will the Tesla Model 3 be delivered on time and on budget this year?
  2. Will demand stay strong for Tesla, despite stiff competition from GM, Ford, BMW, Nissan, etc?
  3. Can Tesla make the huge capital investment required (for the Tesla Factory and Gigafactories expansion), without running out of money?

Read more about Tesla and Elon Musk from Fresh Dialogues archives

BBC Tech Tent: Trump, Zuckerberg and Clean Tech

BBC Tech Tent: Trump, Zuckerberg and Clean Tech

By Alison van Diggelen, host of Fresh Dialogues

Last week, I was in Scotland when the unexpected U.S. election results rocked the world. It felt like Brexit all over again, except more momentous and ominous on multiple levels. Jat Gill, a senior BBC producer invited me to the London headquarters of the BBC to appear on the show Tech Tent. He asked me to analyze the role of tech in the election and predict what’s next for Silicon Valley and clean tech. We explored:

Did Facebook help swing the election in favor of Trump by propagating “fake news” or are we all partly culpable by following those with whom we agree, and demonizing others?

How will a Trump presidency impact Silicon Valley and the clean tech sector?

During the campaign, Trump called global warming a hoax “created by and for the Chinese in order to make U.S. manufacturing non-competitive.” His choice of Myron Ebell, a climate change skeptic and non-scientist, to oversee the EPA transition is threatening for the clean tech sector. There is growing fear that a Trump presidency will cripple the Paris climate pact and derail global progress toward a low carbon economy. Despite these fears, I am hopeful that the worst excesses of the Trump agenda will be tempered by the concerted efforts of state and local leaders, leveraging existing state laws and making legal challenges when necessary.

You can listen to the show at the BBC’s Tech Tent or below:

Here are some program highlights, edited for length and clarity:

Rory Cellan Jones: Hello and welcome to Tech Tent. This week we’re going to be focusing on the technology of Trump. How did the unexpected winner of the presidential election harness data science to zero-in on key voters? And we’ll be looking at the role social media played in the election and whether Facebook’s Mark Zuckerberg is the media baron who swung it for the Republican candidate. To help me in all of that I’m joined from the BBC Tech Desk by Chris Foxx. Hello Chris.

Chris Foxx: Hi everyone!

Rory Cellan Jones: And my special guest all the way from California is Alison van Diggelen, our regular commentator on Silicon Valley and green energy. She’s in London with us this time. Good to see you in person.

Alison van Diggelen: Good to see you Rory.

Rory Cellan Jones: Alison will be commenting on all our stories…

It appears that Facebook founder and CEO, Mark Zuckerberg, has been stung by any suggestion that the social network helped swing the election in favor of Donald Trump. Here’s what he said at the Techonomy Conference overnight:

Mark Zuckerberg: I think the idea that fake news on Facebook influenced the election in any way is a pretty crazy idea. There’s a profound lack of empathy in asserting that the only reason why someone could’ve voted the way they did is because they saw some fake news. If you believe that, then I don’t think you’ve internalized the message that Trump supporters are trying to send in this election.

Rory Cellan Jones: Our Silicon Valley reporter, Dave Lee is on the line from California. Dave, how do you see this Facebook role playing out?

BBC North America Tech Correspondent, Dave Lee: I saw a rattled Mark Zuckerberg in that interview. He was very strongly defending Facebook there. The post he put up about the election… the picture of him and with his daughter, Max, watching the television…as if he was just any kind of onlooker, like the rest of us. I don’t think people are buying that. Of course he had a big role to play. But I think it’s important to take his point: at a time when many people are finding any reason to explain to themselves how this election played out…blaming Facebook is like blaming the mainstream media…various different excuses, other than just a large part of America being extremely angry with how they see the state of the world. We should take his point on that. But to suggest that Facebook hasn’t had a massive influence in this election is naive and I’m not sure Mark Zuckerberg really believes that.

Rory Cellan Jones: Let’s bring in Alison van Diggelen who lives in Silicon Valley. Do you see the impact yourself? I presume you’re a Facebook user. The idea is that Facebook just filters out anything which doesn’t accord with the view you already see.

Alison van Diggelen: I think we are all guilty of (choosing) this siloed information. You follow the people whose opinions you enjoy, that resonate with you. So there is that self perpetuating opinion-making that’s out there. But I think it’s good to listen to Zuckerberg. Donald Trump’s message resonated strongly with people. That’s something that the liberal media and intelligentsia should not overlook. A large percentage of the US population is angry and wants change, even if that means taking a risky change.

Rory Cellan Jones: Before we go, I want to make sure our special guest, Alison van Diggelen, who is an expert on green energy and reports on it a lot from Silicon Valley, gives us the perspective now. How’s that looking given that the president-elect is not noted for his interest in environmental issues?

Alison van Diggelen: Yes, in fact he is a known climate skeptic. I think the clean energy sector is taking a deep breath right now. Trump has said he wants to destroy, or at least not take part in the Paris Agreement and rescind Obama’s Climate Action Plan. But I think it’s not going to be as easy as that to dismantle everything that Obama has put in place. Utility scale wind and solar are already competitive. But I think it is going to hit hard the immature cleantech sector that relies on subsidies. Electric vehicles are somewhere in between.

Rory Cellan Jones: Electric vehicles…one of the arguments about them in middle America maybe is that A: they take away the pleasure of driving and B: they’re a threat to jobs and he’s made big promises about jobs.

Alison van Diggelen: That’s true (re job promises), but Tesla employs about 15,000 people. They’re actually manufacturing in the U.S. which is a rare thing. The thing to remember about Donald Trump is that he is a businessman and I don’t think he’s going to intentionally destroy jobs. But I think what is at risk is the long term research and development investment from the federal government and that could impact America’s ability to compete globally in the clean energy market, which is going to be a big market. You have China and India and Europe which are moving ahead, and I think America needs to look at its global competitiveness in this arena. Hillary Clinton’s plan to be the international leader in cleantech is now a distant dream. It is no longer.

Rory Cellan Jones: Yes, that was then, this is now. We’re moving into a new world. We’ll see how it pans out. Thanks to my special guest Alison van Diggelen who’ll be back in Silicon Valley next week. Thanks to Chris Foxx from the BBC Technology news desk. All of his stories and more at BBC.com/Technology. Don’t forget our Facebook page and join us again in the Tech Tent at the same time next week.

Explore other BBC Reports from Silicon Valley here.

NB: This report and other BBC Reports and BBC Dialogues at Fresh Dialogues are shown here for demonstration purposes. The copyright of this radio report remains with the BBC.

BBC Report: NextEV Founder Shares Supercar Inspiration

BBC Report: NextEV Founder Shares Supercar Inspiration

By Alison van Diggelen, host of Fresh Dialogues

The race to build the “ultimate” electric car is heating up. Every month, it seems another electric car company joins the fray to offer a car stylish enough to attract the Tesla crowd, and affordable enough to meet the growing demand from China, the United States and Europe.

NextEV stands out from the crowd for two reasons:

  1. It has solid backing, from a broad range of top venture capital and Internet companies like Sequoia and Tencent.

2. Its Silicon Valley R&D facility is led by Padmasree Warrior, “The Queen of the Electric Car” and she’s rapidly attracting top tech talent from the likes of Tesla and Apple.

Last month, I attended the grand opening of NextEV Silicon Valley and interviewed its founder, William Li. He shared his “Blue Sky” ambition (he means it literally) and how his grandfather inspired him to go from cattle herder to Internet multi-millionaire. It was the first interview he’d ever done in English. I filed this report for the BBC World Service’s Tech Program, Click.

Here’s a transcript from today’s program, with some great insights from host Gareth Mitchell and BBC contributor, Bill Thompson. The transcript has been edited for length and clarity:

BBC Host, Gareth Mitchell: One event that did happen was the recent launch of yet another electric vehicle outfit in California. This is the Silicon Valley division of a Chinese startup called NextEV. The champagne flowed and the ribbon was cut – the digital ribbon – but our reporter Alison van Diggelen was most interested in the economics of it all. You don’t need to be an investor to know just how risky these ventures are as the technology gradually matures. In California and China state funding and tax breaks are all part of getting these businesses off the ground. Alison tracked down NextEV founder, former cattle herder and now big time entrepreneur, William Li.

Alison van Diggelen: At NextEV’s Silicon Valley launch, William Li confirmed that on November 21st, NextEV will reveal its first supercar in London. The electric car is expected to offer a 0-60 acceleration in under three seconds. Its Formula E racing team has used a dual-motor setup on its race car, and it’s likely to be a feature of the supercar. (The top speed of the sleek two-seater will be over 180 mph, and its price is likely to be equally extravagant!)

NextEV is late join to the electric car race. So how does Li intend to challenge Tesla and the dozens of electric car companies popping up worldwide?

William Li: Tesla is a great company, I respect them. But Tesla was founded 2003. Lots changed. It’s a mobile internet era. We can do better to communicate with our users, give our users a much better holistic user experience.

He aims to do for the car what Apple did for the smart phone.

NextEV William Li on stage, photo by Alison van Diggelen, BBC WSHe learned a lot about user experience from Bit Auto, a popular web portal in China and his first business success. He’s now built a global startup – with facilities in Beijing, Shanghai, Silicon Valley, London and Munich. The global workforce is 2000.

In Silicon Valley, its 250-strong team of auto and software experts is growing rapidly. U.S. CEO Padmasree Warrior – former CTO at Cisco – is hiring experts in artificial intelligence, voice interaction and user interface from the likes of Tesla, Apple and Dropbox.  Warrior says they’re already working on affordable cars for China’s burgeoning demand.

Padmasree Warrior: In China, There’s a large shift happening … Environment issues are driving the government to look at electric vehicles as part of the solution… It’s healthier for the environment to drive an electric vehicle.

China is offering generous tax incentives to electric carmakers and consumers, driving a flood of companies into the space. NextEV recently signed an agreement with the Nanjing Municipal Government in China, to build a $500 million factory to build electric motors.

Similarly in Silicon Valley, a fleet of electric car companies has chosen to locate here, thanks to state tax incentives and the strong talent base. These include Tesla, Atieva, and Le Eco.

I spoke with California’s Director of Economic Development, Panorea Avdis. She explained how state policy is helping reduce greenhouse gas emissions, by focusing on the tech industry…

Panorea Avdis:  The goal is to have 1 million electric zero emission vehicles on the road by 2020.

(Today, California has about 300,000 electric cars, about half of the nation’s total.)

Alison: NextEV secured $10M in tax credits. Tell me why that’s cost effective for the people of California.

Panorea Avdis:  The return on investment…nearly 1000 jobs in the next 5 years, speaks for itself. California is leading the way, there’s no other state in the union that has this type of aggressive polices and it’s really inspiring this innovation in technology to come forward.

But making cars is notoriously hard. News broke this month that Apple is shelving its electric car plans to focus on self-driving software.

William Li knows it’s a tough road ahead. He gives his company just over a 50% chance of success.

As a boy, Li was a cattle herder in China. He’s come a long way and credits his grandfather’s wisdom:

William Li: [Speaks first in Mandarin ] The journey is more important than the result. So follow your heart….your original wish. Don’t worry about failure.

Like Tesla’s Elon Musk, Li is concerned about climate change and also the dense smog in Beijing and Shanghai. He blames polluting gas-guzzling cars.

NextEV’s brand in China is called “Way-Lye”

William Li: It means blue sky coming. That’s my original wish.

It’s an ambitious goal that could be a very long way off, especially in China’s congested and polluted cities.

Gareth Mitchell: That’s Alison van Diggelen reporting from Silicon Valley. So Bill Thompson – the journey is more important that the result?

Bill Thompson: The result is much more important than the journey here, because unless we get much cleaner public and personal transport, then we’re in big trouble. It’s really good to see another serious entrant in this market. It’s not sewn up yet by anyone. As we heard there about Tesla, there’s no first mover advantage because the technology is developing so quickly.

We know Padmasree Warrior’s reputation for delivering. She’s been on the show a few years back.  She was senior at Motorola, then went to Cisco. They’ve got really good people.

But the really interesting part of this is what happens in China. In China because  they have much more control over what people can do. The government can actually mandate a move to electric vehicles much more easily than they ever could in California and that gives a great market. So NextEV may be getting money and expertise over in Silicon Valley, but it’s what happens in China that’s really interesting.

Gareth Mitchell: I was interested in the economics side of the piece: the reliance partly on state funding to get these businesses going.

Bill Thompson: Occasionally state funding helps. You might have heard of this little thing called the Internet, kicked off with defense department funding from the US. It did pretty well by being able to rely on that funding for a critical period while it developed and then was able to be used by the private sector. One or two of these examples of it actually working…

BBC Dialogues: Meet The Queen of the Electric Car, NextEV

BBC Dialogues: Meet The Queen of the Electric Car, NextEV

By Alison van Diggelen, host of Fresh Dialogues

Today began with news that Apple was in talks with British carmaker McLaren about a possible acquisition, linked to Apple’s “Project Titan” electric car. Rumors were later squashed by McLaren, but attention is still on Apple’s autonomous car plans and speculation is mounting.

Meanwhile, my friends at the BBC invited me to share my (verified) interview with new electric vehicle company, NextEV. This Chinese startup, with a growing R&D facility in Silicon Valley has just come out of stealth mode and plans to reveal its “supercar” in November. When I interviewed Padmasree Warrior, CEO of NextEV USA last month, she couldn’t reveal the specs of the car, but my investigations concluded that it would be autonomous. This week, her spokesperson confirmed that both the first generation NextEV cars, to be manufactured in China, and those to be made at a manufacturing facility in the U.S. will be autonomous.

Listen to my report at the BBC’s Business Matters. Our electric/autonomous car discussion starts at 32:46.

Here’s a transcript of our discussion and my report (edited for length and clarity)

BBC Host, Anu Anand: Apparently Apple is NOT in talks with McLaren as reported by the Financial Times. This all underscores the feverish speculation about driverless car technology and where the major tech companies like Apple are putting their chips and what they’re doing to prepare products for this market. This is something you’ve been looking at too, isn’t it Alison?

Alison van Diggelen: Absolutely. Apple is notoriously secret…It’s well known they’ve been working for two years on the electric car (Project Titan). The latest speculation says they may be in talks with a San Francisco startup called Lit Motors. There is a race for electric vehicle talent and Apple recently laid off dozens of its team and is looking to fill that gap. I’ve been talking with NextEV, a real electric car maker that’s just coming out of stealth mode. Its CEO, Padmasree Warrior, invited me to visit its brand new R&D facility in San Jose. Here’s my report:

The race for affordable electric vehicles is heating up around the world. Here in Silicon Valley, just 10 miles from the factory where Tesla makes its electric cars, NextEV, an electric vehicle startup is racing to get on the track. Former CTO at Cisco, Padmasree Warrior now leads the U.S. facility of this global startup with operations in China, Germany and the UK. Despite her lack of car experience, Warrior’s bold approach to beat Tesla in China is earning her the name: “Queen of the electric car.”

Padmasree Warrior: When you think about cars in the old paradigm…people used to talk about Horse Power…we think in the future people will talk about ease of use, user interface, Artificial Intelligence. And so the shift from HP to AI is one of the shifts that we will embrace much more rapidly. Our opportunity within China is to combine all of the capabilities from the mobile Internet to focus on user experience – from ownership, to maintenance to post ownership services.

NextEV US HQ, photo by Alison van Diggelen for BBC reportNextEV US headquarters in San Jose is 85,000 square feet. When remodeling is complete, it will house a 10,500 square feet auto lab.

Alison van Diggelen: Energized by NextEV’s $1Billion in funding, Warrior and her Silicon Valley R&D team has gone from zero to 160 employees in about 9 months. It has attracted auto and software experts from the likes of Tesla, Apple and Dropbox. It’s this focus on the software that Warrior hopes will differentiate her products in a crowded race. She suggests that the touch screens on NextEV cars will be more actively utilized than Tesla’s and the car will automatically “know who’s driving it.”

New team member skill-sets suggest that features will include voice interaction and autonomous driving.

I asked her if building an attractive car was important too?

Padmasree Warrior: This is why we have a design center in Munich; we have an amazing industrial design team and styling expertise… We believe European design is unbelievably superior in the consumer product space.

Alison van Diggelen: NextEV’s founder, Chinese Internet billionaire William Li has a global strategy that aims to leverage each location’s comparative advantage and use virtual reality tools to make sure that all its teams are driving forward together.

Padmasree Warrior: Silicon Valley is obviously the place to be for looking at technology, looking at disruptions. China’s expertise is manufacturing, supply chain…obviously the market is there.

NextEV hopes to make a flying start in the Chinese market next year, but is keeping the specs of its cars under wraps, until the “supercar” is revealed before the year end. Co-President Martin Leach confirmed that their cars will definitely be cheaper than Tesla’s.

He spoke to me from NextEV’s London office:

Martin Leach: We’re not making a company for ultra millionaires and billionaires and then trying to transition the company to a more affordable solution…the supercar plays a role in our overall strategy, and is being developed alongside our other mainstream products… from day one.

Living wall at NextEV HQ, photo by Alison van DiggelenThe “living wall” in NextEV US Headquarters in San Jose, CA

With about 200 electric car companies in China alone, NextEV’s William Li has put his company’s chance of success at just 5%, but that doesn’t deter Warrior.

Alison van Diggelen: Although the odds are against her, Warrior – who’s known as a champion for women in tech – is following her own advice to women in business:

Padmasree Warrior: Be confident, go for what your dreams are. Sometimes, we second guess ourselves, we stay with what is comfortable rather than what we really desire to do. Take risks wisely, but take risks.

Alison van Diggelen: Her team in Silicon Valley is putting pedal to the metal to make it happen…

Continue listening to the podcast (@38:00) to hear our discussion about driverless car fears and the impact of this week’s Department of Transport guidelines for automated cars.

Find out more about Tesla’s plans and other Electric Vehicle developments at Fresh Dialogues

NB: As with all my BBC Dialogues and Reports at Fresh Dialogues, the copyright of this report remains with the BBC.

BBC Report: Despite Tesla Crash, Authorities Urge Self-Driving Car Development

BBC Report: Despite Tesla Crash, Authorities Urge Self-Driving Car Development

By Alison van Diggelen, host of Fresh Dialogues

Will the fatal Tesla crash slow or even derail the development of self-driving cars? That was the topic we discussed on this week’s BBC World Service program, Click.

Despite complaints by consumer advocates that Tesla should disable its autopilot feature and not beta test “an unproven technology” on the public, Tesla is standing by its strategy. Today the BBC’s Dave Lee reported from the Gigafactory that Elon Musk has no regrets about how Tesla rolled out the autopilot.

“We have the internal data to know that we improved people’s safety, not just in fatalities but in injuries.” Elon Musk, CEO Tesla at Gigafactory, July 26 2016.

Remarkably, federal regulators at the Department of Transport (DOT) and the National Highway Traffic Safety Administration (NHTSA) appear to be siding with Tesla and urging a “full-steam ahead” approach. They’re focused on self-driving technology’s potential to save lives.

No one incident will derail the DOT and NHTSA on its mission to improve safety on the roads by pursuing new life saving technologies. We…can’t stand idly by while we wait for the ‘perfect.’ We lost 35,200 lives on our roads last year. We’re in a bad place and we should be desperate for new tools that will help us save lives. How many lives might we be losing if we wait?Mark Rosekind, Head of the NHTSA at the Automated Vehicles Symposium, July 20 2016.

The NHTSA is expected to release its new guidelines for self-driving (autonomous) cars any day now. I’ll post a link to them here as soon as they’re available.

Listen to our Tesla autopilot discussion below or  at the BBC Click Podcast. The first broadcast aired on the BBC World Service at 2:30pm PST on July 26th.

Here’s a transcript of our discussion (a shorter version aired on the BBC).

BBC Click Presenter, Gareth Mitchell: Now the first death of a Tesla driver on autopilot earlier this year was bound to overshadow the recent Automated Vehicle Symposium in San Francisco last week. But those at the meeting were also looking forward, at the latest innovations in driverless cars. BBC contributor, Alison van Diggelen was there for us, and she’s been telling me a bit more about what was being discussed.

Alison van Diggelen: The 3-day symposium assembled some of the top government authorities, academics and tech experts in the field of automated vehicles. The main topics included: the promise and challenges of automated vehicles; the federal guidance about to be released; and whether the Tesla crash will derail the development of automated vehicle technology. Mark Rosekind Head of the National Highway Traffic Safety Administration (“Nitsa”) spoke about all three topics and emphasized the technology’s potential to save lives.

Mark Rosekind:  We’re not in a good place that we’re trying to make better. We lost 35,200 lives on our roads last year. We’re in a bad place and we should be desperate for new tools that will help us save lives. How many lives might we be losing if we wait? We have to do everything we can to make sure the new technology doesn’t introduce new safety risks, but we also can’t stand idly by while we wait for the “perfect.”

Reports around the country seem to be sounding the alarm: they are shocked, shocked (!) to discover there’s vehicle automation that’s already here…they’re demanding to know: where was the government to stop this?

I am not going to comment on an ongoing (Tesla) investigation…but I can say three things:

  1. We know there will be incidents that occur with highly automated vehicles and NHTSA will always be ready to use its authority to investigate and take whatever action is necessary
  2. New highly automated vehicles offer enormous opportunities for learning…When something goes wrong,…that data can be taken, analyzed and the lessons can be shared with all automated vehicles.
  3. No one incident will derail the DOT and NHTSA on its mission to improve safety on the roads by pursuing new life saving technologies.

EV_Rally_Trollstigen_Tesla_Model_S

We’re writing the Declaration of Independence, not the Constitution. It’s the first step that will lay the road map to the next generation of vehicle technology – a harmonized approach not just across states but perhaps even internationally. It’s an approach that’ll provide certainty to manufacturers, to make sure you’re focused on safety in the right ways.

We see a future where disabled people can reclaim independence and freedom in a personal vehicle. We even see a future when a fully automated car can relieve the occupants of all driving responsibilities, leave them free to read a book, make a phone call and yes, catch a few more Pokemon.

Gareth Mitchell:  There was also talk of innovation, refining the technology and one UK voice in particular. Who was this, Alison?

Alison van Diggelen:  Ian Forbes is head of the Center for Connected & Automated Cars, a joint policy unit of the UK government. I chatted to him briefly after his presentation, where he gave a flavor of the opportunities and challenges ahead. Forbes played a short video that showed a junction in a UK city. The simulation showed that connected & autonomous vehicles bunch closer together when they approach the red light. This means that when the light turns green, more cars can go through, making that junction more efficient. He says it was a result they weren’t expecting…and they expect further simulations will help predict other benefits of self-driving cars. He also talked about the importance of public perceptions and behavior. They’re starting a 3 year study…

Ian Forbes: In the UK we share a problem with everyone in this room. Like everyone here, we can see the potential benefits: fewer crashes, more efficient transport, new high value jobs. It’s also likely we face the same challenges: how do you design a regulatory framework when so much of the future technology is uncertain? How do you get maximum value for your research so that it delivers something new? One tool in our toolbox is Micro-simulation using agent based models to understand the impact of different transport scenarios to inform our future transport traffic predictions.

Gareth Mitchell: Finally Alison, the meeting was overshadowed by the tragic death of a driver in autopilot mode in a Tesla. What kind of reflections were there about how that leaves the whole driverless project?

Alison van Diggelen: I spoke with a number of conference attendees from the academic and tech worlds, including Bob Denaro, a member of United States’ Transport Research Board (TRB) and venture capitalist advisor to Motus Ventures. He reframed the the Tesla crash in its historical context, talking about the Wright brothers and one of their early passenger deaths, during a demo for the U.S. army. So I think that gives the Tesla crash an interesting historical context. He and a lot of people said, this seems a disaster short term but in the long term, it’s going to be a small bump in the road.

Bob Denaro:  If we look at early days of aviation – the Wright brothers killed (one of) the first passengers….Frankly I’ve been surprised that the public reaction has been more muted than I feared it would be…I don’t think it’s going to be that big of an impediment to our progress and the speed of our progress.

The traditional automotive approach is: let’s test exhaustively over years and then put it on the market. Sometimes we make mistakes…maybe there are fatalities, recalls…The approach that Tesla is taking is: let’s put it out there early, before it’s completely done – let’s learn quickly, and because of the software updates over the air, let’s make changes…They may be on to something there.

My advice to Elon Musk would be: yes, be careful, make sure you test it, understand the results…But this approach – as different as it is to the traditional approach – just may be a better approach to minimizing the accidents we have to have along the way before we get close to perfection.

CACC Tweet re Queen, photo by Alison van Diggelen

Bonus material:

Ian Forbes shared a video that didn’t make the final cut. With a little help from Queen Elizabeth and a humorous Tweet, he sent ripples of laughter throughout the global audience. Here’s the transcript (it’s a wee bit awkward).

The Queen (via video): My ministers will ensure the United Kingdom is at the forefront of the technology for new forms of transport, including autonomous and electric vehicles.

Ian Forbes: That was the Queen, in the UK, back in May setting out the future legislative program of the UK government. My favorite response was on Twitter: Ah Britain – the only parliament in the world where someone turns up in by horse drawn carriage to promise everyone else driverless cars.

Find out more:

Fresh Dialogues reports on Tesla and Electric vehicles (from the first Master Plan to date)

More from the BBC about Google and Self-Driving cars

Fresh Dialogues reports on government policy

Fresh Dialogues report on Inspiring Women

 

BBC Report: How Can Tesla Deliver 400,000 Model 3s by 2018? Hubris vs Caution

BBC Report: How Can Tesla Deliver 400,000 Model 3s by 2018? Hubris vs Caution

By Alison van Diggelen, host of Fresh Dialogues

This week, I listened live to Tesla’s latest earnings call and was gobsmacked at Elon Musk’s audacious new goal to build half a million cars per year by 2018.

“This is based off the tremendous demand received for the Model 3, which I think is actually a fraction of the ultimate demand, when people fully understand what the car’s capable of….Tesla is going to be hell-bent on becoming the best manufacturer on earth.” Elon Musk

But how on earth is Tesla going to perform this ambitious ramp up in production? It’s a 1000% increase in Tesla’s 2015 production level (approx. 50,000 Model S and Xs). Here’s one more clue from Elon Musk, at the end of the conference call:

“We believe that there’s more potential for innovation in manufacturing, than there is in the design of the car by a long shot.” Elon Musk

Tesla’s Alexis Georgeson took me inside the Tesla factory last week to share some insights as to how this “mission impossible” just might be done.

My report aired today on the BBC World Service program, Tech Tent. You can listen to the podcast at the BBC here (Podcast: Seeking Satoshi, May 6th, @9:00) or below:

Here’s a transcript of my report on Tech Tent:

BBC Host, Rory Cellan-Jones: This week, the entrepreneur behind the Tesla cars made an extraordinary promise to his investors. He said his company would manufacture half a million cars a year by 2018. Given the fact that Tesla has missed much smaller production targets in the past this seemed, well, brave. But as Alison van Diggelen reports from Silicon Valley, Elon Musk is confident that this time, things will be different.

Alison van Diggelen: Tesla Motors astounded the auto industry last month when it received over 400,000 reservations (325,000 in the first week) for its new Model 3, an “affordable” all-electric car. In response, CEO Elon Musk just announced a production goal of half a million cars by 2018.

Elon Musk: My desk is at the end of the production line…I have a sleeping bag in the conference room… which I use quite frequently. The whole team is super focused on achieving rate and quality at the target cost, so I feel very confident in us achieving that goal.

Alison van Diggelen: I visited the Tesla factory in Silicon Valley to find out how they can deliver on time and in such huge numbers. Though beloved by fans, Tesla is also notorious for production delays.

Men & Women on Tesla production line, photo by FreshDialogues

Last year, the company spent over 1.5 Billion dollars in capital. Its cash burn-rate looks unsustainable. With General Motors coming out with a longer range electric car later this year and other competitors hot on their wheels, Tesla is under pressure to deliver, and fast.

Alexis Georgeson: There’s already been one major reorg since Model S production started in 2012. The original end of line used to be right here… we straightened out the line so we could expand and increase production.

Alison van Diggelen: That’s Alexis Georgeson, a Tesla spokesperson who explains in great detail the 7-day process that transforms a roll of aluminium into a shiny electric car. The two-week reorg and retooling in 2014 means that Tesla now has over 1000 state of the art robots, which helped ramp-up production by over 100% last year.

A separate production line for the Model 3 is planned and hard lessons from earlier models will help speed up their manufacture, especially more in-house capabilities and more thorough supplier validation. Musk says the new Model 3 will be designed to be easy to make.

Alexis Georgeson: We’re constantly learning and innovating. The great thing about Tesla is that so much is in-house and that we are so nimble.

Alison van Diggelen: I asked about the long delays in the Model X, largely caused by the flashy Falcon Wing doors.

What’s the trade off between hubris and caution at Tesla?

Alexis Georgeson: Our mission is not just to accelerate sustainable energy and transportation …You’re creating new features that haven’t been done before in the auto industry. With that comes natural growing pains…

Alison van Diggelen: So what about the cash flow issues?

Georgeson: The thing that’s missed there is the capital-intensive nature of the auto industry. Especially for a company like Tesla that’s ramping production so quickly…

Alison van Diggelen: Here’s Elon Musk…

Elon Musk: Tesla is hellbent on being the best in manufacturing… We believe that there is more potential for innovation in manufacturing than in design of the car, by a long shot.

Alison van Diggelen: Musk says the first Model 3 deliveries will start in late 2017. If he can prove naysayers wrong again, the majority of Model 3 reservation holders might see their cars coming off the production line in Silicon Valley within the next two years…

Read more Fresh Dialogues reports on Tesla here (scroll down for archives back to 2012)