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, Alison van Diggelen, host of Fresh Dialogues 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:
- Will the Tesla Model 3 be delivered on time and on budget this year?
- Will demand stay strong for Tesla, despite stiff competition from GM, Ford, BMW, Nissan, etc?
- 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
By Alison van Diggelen, host of Fresh Dialogues
Since Tesla CEO Elon Musk joined the Trump business advisory team in December he’s been under intense pressure to step down. That pressure intensified this month after Donald Trump signed an executive order banning immigrants from seven countries with Muslim majorities. On February 2nd, Musk’s colleague, Uber CEO Travis Kalanick pulled out of the Trump team after a widespread #DeleteUber campaign went viral and his employees urged him to withdraw.
“Joining the group was not meant to be an endorsement of the President or his agenda but unfortunately it has been misinterpreted to be exactly that,” wrote Kalanick to his staff.
Musk faced a barrage of similar criticism, with some saying he’s a crony capitalist and others claiming to have cancelled their orders for Tesla Model 3.
Last week, I joined the BBC’s Fergus Nicholl on the BBC World Service program, Business Matters. We discussed Silicon Valley tech’s furious reaction to the Trump travel ban and Elon Musk’s high pressure predicament.
Listen to the podcast excerpt below (it includes commentary from the always provocative Lucy Kellaway):
Here’s a transcript of our conversation (edited for length and clarity):
Fergus Nicoll: Elon Musk has run into Twitter trouble…when he spoke to Mr. Trump in person and when he was seen having a drink with Steve Bannon in the White House, a lot of people said: “What on earth are you thinking?” And he came up with a fairly strong defense…
Alison van Diggelen: His key message is: “Activists should be pushing for more moderates like him, to advise the president not fewer.” And he asks, “How could having only extremists advise him possibly be good?”
Alison van Diggelen: He’s faced a lot of criticism, people even saying they’re cancelling their orders for the next generation of cars, the Tesla Model 3. He is under this pressure, but he is a powerful influencer, a poster child for Donald Trump’s manufacturing jobs being in the U.S. Musk is an idealist, he wants to save the planet. He’s bringing his message of climate change and green jobs, almost as a Trojan horse, into Trump’s meeting rooms. I think a lot of people who think about this deeply deeply, are not having this knee jerk reaction and saying don’t associate with Trump. Instead they’re saying this might be a good conduit for Trump hearing this green point of view.
Here is some of the pushback Elon Musk received on Twitter and his responses:
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.
Photo: Skyward CEO Jonathan Evans is convinced we’ll see “Jetsons” human-moving drones in 5 to 10 years
By Alison van Diggelen, host of Fresh Dialogues
Portland is better known for its environmental activism and the quirky comedy Portlandia
than its tech; but that reputation is beginning to change. This month, I visited two Portland startups that are helping accelerate the future of transportation through innovative technology for drones and autonomous vehicles. Skyward
, a drone operations startup, predicts that the Jetsons
future of flying cars is closer than we think. And in the fast-moving autonomous vehicle sector, Polysync’s
software is being widely used to speed up the development of self-driving cars.
“It’s harder to move from A to B and when you look at the sky, you have a blank slate. Within 5-10 years you will see human-moving aero robots that will be moving programmatically in space. It’s a lot like the vision we have of the Jetsons. It’s going to be much more on-demand, much cheaper, empowering all of us to be able to access the sky for whatever we want to,” Jonathan Evans, CEO Skyward
“That’s the problem with autonomous driving: each one of these sensing modalities has their limitations: some don’t see well in rain, in fog, at dusk. The Mobile Eye, what Tesla was using to detect lanes, some objects…that does very poorly at dusk….when the sun is head on. You really want backup, systems that are all corroborating its perception of the environment. In my opinion, the more sensing, the better,” Evan Livingston, Polysync Test Engineer
BBC tech writer, and Click contributor, Bill Thompson
shared some good insights on my report, emphasizing the importance of new drone regulations
that will help bring drones from the Wild West era to “civilization in the sky.”
Here’s a transcript of my report (edited for length and clarity).
BBC Click Host, Gareth Mitchell: Flying cars are part of the subject for our final item. We’re off to Portland, Oregon to its famous “Silicon Forest”, their counterpart to Silicon Valley in California. There’s a startup there working on flying cars, another is working on autonomous vehicles and we have this report from Alison van Diggelen, who’s been there.
Alison van Diggelen: My first stop was the Technology Association of Oregon. Its President, Skip Newberry is bullish about Portland’s growth prospects: in data, software development, and the Internet of Things.
Skip Newberry: I refer to Portland as having this Goldilocks phenomenon: we’re not too big, not too small, not too expensive and yet we also have some interesting amenities and international connections. We have a great quality of life.
Alison van Diggelen: He sent me to Polysync, a software startup that helps speed up the development of autonomous cars.
Polysync just earned a top 10 startup ranking at this year’s L.A. Auto Show.
Evan Livingston: On the right trigger we have acceleration, on the left trigger we have breaking. [Ambi: car accelerating and breaking]
Alison van Diggelen: In a converted warehouse, Polysync’s engineers test the software of autonomous cars to make sure all the sensors are communicating. Field engineer, Evan Livingston gave me a demo.
Evan Livingston: On this car, we have about 15 different sensors…we have 4 cameras that give us 360 degree views of the environment, we have six radars. We have 2 different LIDAR systems, and then we have a GPS inertial movement unit…so it gives us a very accurate location of the vehicle.
Alison van Diggelen: We discuss the recent fatal crash involving Tesla’s autopilot feature.
Evan Livingston: That’s the problem with autonomous driving: each one of these sensing modalities has their limitations: some don’t see well in rain, in fog, at dusk. The Mobile Eye, what Tesla was using to detect lanes, some objects…that does very poorly at dusk….when the sun is head on. You really want backup, systems that are all corroborating its perception of the environment. In my opinion, the more sensing, the better.
Evan Livingston sets up a demo of the Polysync software that connects the car’s 15 sensors.
Alison van Diggelen: Polysync’s team has doubled in size in this year, driven by partnerships with over 50 major car manufacturers and their suppliers. The company uses a 32-acre “mock city” campus near Detroit for testing. It’s called M-City. Here’s Polysync’s CEO, Josh Hartung.
Josh Hartung says MCity’s physical test track allows them to test near collisions and real world simulations.
Josh Hartung: They have cute fake buildings, and intersections, a small section of highway, little stop lights…. They have different ways they can trick an algorithm to think that it’s a real person with cardboard cutouts or inflatable targets. It’s one of the first in the world.
Polysync demo shows the car sensors in action
Alison van Diggelen: Across the Willamette River, I meet with Jonathan Evans, a former Blackhawk pilot in the army. He leads Skyward, an operations platform for commercial drones. He’s excited about how our perception of drones is changing as they touch our lives ever more closely…from fun toys to aerial surveys to even delivering breaking news.
Jonathan Evans: They look at this really beautiful piece of technology that is really like a flying cellphone. It’s gyro-stabilized, grid-oriented, information-oriented robot that can move ubiquitously in space… We take the pilots and the aircraft and we put them into the global airspace and help them conform to whatever the rules of the road are there. We were in the era of the Wild West… but now we have regulators that have provided us the channels to flow into responsibly. You can see a dramatic shift into civilization in the sky.
Alison van Diggelen: Evans thinks that drones will soon make (package) deliveries –even Internet delivery – and anticipates a paradigm shift in transportation.
Jonathan Evans: On the ground, things are getting much more clogged and it’s harder to move from A to B and when you look at the sky, you have a blank slate. Within 5-10 years you will see human-moving aero robots that will be moving programmatically in space. It’s a lot like the vision we have of the Jetsons. It’s going to be much more on-demand, much cheaper, empowering all of us to be able to access the sky for whatever we want to.
Alison van Diggelen: Silicon Valley companies may steal the limelight but behind the scenes, Portland’s “Silicon Forest” is making its mark on the evolution and impact of technology around the world. [Ambi: Skyward flight ops team, DJI Phantom 3 Professional drone]
Jonathan Natiuk: “That’s kinda cool, man!”
Gareth Mitchell: Are we really heading for the Jetsons in our lives, do you think Bill Thompson?
Bill Thompson: Well, I started off being really skeptical about this…but then I discovered a human carrying drone is being tested in Nevada, the eHang drone…the actual hardware is being built. It can go 100 km/hour. The hardware is there and what we hear from Skyward is that the regulation is starting to be there. That’s the crucial thing. It’s about making sure if we have the technology that can deliver these things. It fits into a broader regulatory environment, so it becomes both legal and as safe as it can be to do them. It took a long time for the automobile, for the car, to go from being something strange and mysterious to dominating our cities. I do think we will get to the stage where we’re using the skies in these new ways, so actually, yeah: it is coming.
Find out more about electric and autonomous vehicles, from Tesla to Hyperloop at Fresh Dialogues EV archives
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 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.
The “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.