I’m not privy to whom is critical or not and the circumstances under which they come and go. Some of it may be a retention problem, demands of the job, and Musk’s own reputation for having little willingness to retain talent that isn’t meaningful to the task at hand.
The other issue is Tesla has been phasing out traditional engineering roles for roboticists and AI experts as part of its shift and focus. I don’t know anything about xAI to comment on its talent and the change over and how much that had to do with the integration into Space X and or disappointment over the progress with Grok.
Again, I don’t want to speak out of turn. I have been a long time shareholder and have stepped back from following the changes in personnel. I agree it at times has been frequent but I wouldn’t know enough of about the importance of the individuals leaving and how it might be negatively impacting the culture or the business, if that’s your point.
As to traditional engineers, there have been a slew of departures as the auto production consolidates to exclude future production of the Model X and S. They have been replaced by engineers with focus on AI and Robotics, is what I have read.
One of the things I’ve read about Musk, but a view I don’t share, is the belief in cutting personnel to the point you have to add back. He believes you haven’t sufficiently matched up resources until you know you have gone too far. I could see where that might add some angst and cause increased turnover. However, I don’t think it impacts my thesis on the culture as to its ability as a large company to think and take action like a startup.
Yeah I’m pretty sure that will come to be seen as destructive in many dimensions-: institutional memory, morale, unsustainable workloads, communication problems and so on. For a while the business community was in thrall to the “stack ranking” method of employee evaluation, which only caused people to blame shift, subterfuge, and sabotage other employees to make sure they stayed out of the bottom 10%. Just one more terrible business theory we can thank Jack Welch for (I would have thought that smarties like Bill Gates and Zuck would have figured it out long before they did, but no.)
Tesla does not necessarily struggle to attract talent—often receiving a surplus of applicants—but the company faces significant retention and recruitment friction. Major hurdles include a notoriously demanding work culture, high costs of living in primary engineering hubs like Fremont, CA, and aggressive poaching by competitors like OpenAI. [1, 2, 3, 4, 5]
There is always lots of speculation around the turnover at Tesla. I find little value in focusing on it as an investor. The largest criticism seems to come from people that have never worked there and don’t know the business any better than any other causal observer and usually have no vested financial interest.
He has created more millionaire employees than any other company and history. He and his teams have managed to build not 1 but 2 companies that are each worth more than the largest public company trading on the European stock market.
You don’t get to that point without a successful team of people committed to being there. The great danger to capital intensive businesses is the cost structure getting out of control. I think Musk is mindful that its survival and success is partially dependent on being disciplined about labor costs and productivity.
I do agree with you regarding Welch. Much of his legacy has been undone over the years and with good reason.
Sure, I would pick it up. But I wouldn’t then falsely conclude that my wealth was mostly “pavement money picking-up” money. Because the ten dollar bill is a rounding error in my overall net worth. Which is why your suggestion that Tesla looks more like a software company than a car company is false.
Jury’s still out on that - literally. Because there might be some serious bills that come with that cash flow maneuver.
But regardless, my point was (again) that Tesla isn’t getting a lot of current revenue from FSD relative to the size of the company. Which is why it isn’t more like a software company. Because their software revenues are a trivial part of overall revenues.
Not really. My post was about the present. I specifically noted that if Tesla ever gets Robotaxi out of open beta, that might change. But as long as they’re still struggling to get FSD to work without a human driver in the car, software revenues will remain a very tiny part of total revenues - and they therefore won’t look like a software company, contrary to ccc’s assertion.
Median lawn size in America is less than 1/4 an acre. That means MOST of the market can get their lawn mowed with a single charge.
But let’s assume the median was much larger or the charge was shorter - who cares? The robot is doing the mowing. It can mow at 7 PM, recharge at 8 PM, and go back and finish at 9 PM. I don’t think range anxiety exists in this scenario.
Hawkwin
Who has a battery mower, edger, blower, and chainsaw that will occasionally require him to use his second battery to finish weekly yard maintenance - I can change batteries quicker than one can refill the gas on their mower.
You seem to ignore that the FSD technology will be driving the CyberCabs and animating the Optimus robot. Investing is not about the past but about the future. Listen to Elon! The timing might be off but the results are real.
The FSD technology isn’t actually delivering any material software revenue from Cybercabs or their robotaxis (or from driver assist, by the way).
Because it doesn’t actually do much driving.
But, because Tesla has a great culture and the ceo is a manufacturing genius, some time in the future Tesla is going to accelerate way ahead of Waymo and do everything better and faster and cheaper than Waymo, and same goes for all other competitors.
Even though Tesla has shown zero indication of the ability to do that in AI so far.
cashflow, future, vertical integration, more future, google AI says so, etc
I’m not ignoring Tesla’s hopes for the future. I’m simply responding to your comment, which was based on current revenues from FSD and suggested that Tesla looks more like a software company. It does not. Their current software revenues - which are what you cited - are a trivial component of their business.
Perhaps one day in the future they might look more like a software company, but not at present
Right. But you made your point using current numbers. I was merely responding that the figures you cited - the current numbers - do not support the notion that Tesla looks like a software company. It is important not to confuse a potential outcome with one that has already been achieved. Current is what a company has demonstrated they are capable of - the future is about what they might be able to do, but might also fail to achieve. As so many of Tesla’s efforts have done.
Tesla’s successes have made it one of the wealthiest companies in the world. Maybe the outlook depends on one’s optimism or. pessimism while looking at the same facts. Or one’s familiarity with the software industry…
On the way home I was thinking about car maker market values. Here is what Google AI said:
Tesla currently leads the global automotive industry in market capitalization, valued at roughly $1.56 trillion. It is followed by Toyota (approx. $200-$317 billion), and China’s EV leader, BYD (approx. $122 billion). Market capitalization reflects future investor confidence, which differs heavily from traditional vehicle sales volume.[1, 2, 3]
The top global car makers by market capitalization:
Note: While Toyota trades at a fraction of Tesla’s market cap, it remains the world’s largest automaker by actual volume, selling over 11 million vehicles annually. [1]
This is what I came up with…
Brand
Market Value
Pct.
Tesla
1,560,000
60.39%
Toyota
317,400
12.29%
BYD
122,300
4.73%
Xiaomi
119,300
4.62%
Hyundai
85,600
3.31%
GM
75,200
2.91%
BMW
64,800
2.51%
VW
62,300
2.41%
Mercedes
62,000
2.40%
Ferrari
60,000
2.32%
Ford
54,100
2.09%
Total
2,583,000
100.00%
If Tesla were just a car company, why would it be worth half the car industry when even Toyota, by itself, outsells it in units? What are investors seeing that Tesla bears miss?
For the same reason that AOL was one-third again larger than Time Warner, even though AOL had modest profits, if any, and Time Warner was one of the largest media conglomerates on earth. Happy and buoyant retail investors thought AOL was the inevitable future, and there was something in the air that other investors thought the days of legacy media were done.
And then, and not all at once but inevitably, reality set in and people realized AOL was never going to reach those dreamy goals, and the entire thing collapsed, including the legacy media house it took down with it.
Kara Swisher outlines it nicely in multiple takes, “There Must Be A Pony In Here Somewhere” is the most complete, but she reprises bits of it in others. Also, please see the game Elon is playing with SpaceX, putting only a small fraction of shares available and once the astronomical value is established, immediately pivoting to the bond market for funding.
The man’s no dummy, but he’s taking somebody for a ride. I think I know who.
