Any day now, Elon Musk could step down as Twitter CEO, on the heels of a recent poll in the Twitterverse showing 58% want him out as boss. On Twitter, he said he would resign as CEO "as soon as I find someone foolish enough to take the job!" *
Even when he quits and appoints another CEO, the future of what happens to Twitter is unclear. However, that’s a story for another day.
By comparison, what happens in coming months to Tesla where he is also CEO will be far more important to millions of engineers (whether they work at Tesla or not) who design hardware and software for electric vehicles and futuristic self-driving vehicles, but also robots and other machines dependent on artificial intelligence. Tesla has about 100,000 employees and is consistently cited by engineering colleges as a top destination for graduates, along with SpaceX, where Musk is also CEO and CTO.
Tesla has been a clear leader in EV, driving companies like Ford and GM to pick up the EV mantle. Yet, in dramatic fashion, Tesla stock has lost 50% of its value in the past year, and many investors blame Musk’s involvement in Twitter, primarily. Tesla’s stock price on Monday* was $123.15, down from $168 on Nov. 21, which was the lowest it had been in the prior two years.
At CES 2023 starting Jan. 5, Tesla is not listed on the official exhibitor directory, although it probably will use the event to meet partners privately as many vendors do. Nonetheless, the show is touting a sold-out West Hall of carmakers and various chip and MCU designers and producers, including many offering radar, lidar and camera sensing technology described as enabling Level 4/5 self-driving autonomy.
The interest in vehicle automation at CES jives with global interest in chip design for automotive. A survey by KPMG of 150 chip executives found the top revenue producer expected in 2023 will be in automotive chips, ahead of wireless, cloud, metaverse and other categories.
RELATED: Auto chips seen as biggest revenue producer in ’23: KPMG
Even if Tesla is not present at CES or other trade events in 2023, the company is still widely considered today’s driving force in the automotive engineering field whether or not the general public considers Musk to be a jerk, or worse, and bad for investors because of what has happened at Twitter.
A long-term concern for Tesla will be how it handles safety concerns with self-driving technology amid National Highway Traffic Safety Administration probes into dozens of Tesla crashes, even as California has passed a law that effectively bars Tesla from advertising some vehicles as fully self-driving.
Baron's focus on the Tesla positives
Against this backdrop, Investor Ron Baron tried to bring out Musk’s and Tesla’s positives in an interview in early November captured in full on YouTube, the same day Musk fired half the Twitter staff. Some of his philosophies about engineering are worthy of reflection.
Musk was confident, if not overly self-congratulatory, throughout the interview. “Before Tesla, no one was doing electric cars and now almost every car company is building electric cars,” Musk said. “At Tesla, our goal is to drive sustainable energy and we can’t do it by ourselves.”
The interview helped reveal Musk’s ongoing philosophy about engineering and engineers, especially when he said his job as CEO is 80% or more devoted to engineering duties. He described ways Tesla has been able to produce more than 1 million cars a year, including by catching costly mistakes in production. ”Over and over again I found parts that were not needed or put in by mistake,” Musk said. “We’ve deleted so many parts from the car that did nothing,”
He gave two examples of eliminating unneeded parts. One was removing three fiberglass mats atop the EV battery pack. The team overseeing noise and vibration thought the mats were included for fire prevention, but when Musk asked fire prevention engineers, they said the mats were designed to reduce noise and vibration. Musk directed microphones be put in two cars, one with the mats and the other without, “and we could not tell the difference…We went to a lot of trouble for a part that should not exist.”
The other example was revealed when problems developed on the production line with a laser welding operation on a cross-car beam in the passenger side footwell. The production team said the beam was for crash safety and, later, the crash safety engineers said, no, the beam doesn’t do anything. “It turned out totally useless and they forgot to tell production,”he said.
At times, working in manufacturing production is “like living in a Dilbert cartoon,” he said. Production companies and engineers should “try to keep the Dilbert quotient low.” Musk said he lived and slept in Tesla plants for three years so workers would see him and would pop up at choke points “like a Tasmanian devil running around like a lunatic.”
Musk defended Tesla’s stock price and said investors are still attracted to buy it largely because of the long-term value proposition of self-driving vehicles. “Autonomy is the biggest factor in value,” Musk said. Most cars today are driven by owners just 1.5 hours a day or up to 12 hours a week out of a 168-hour week. With an autonomous vehicle, a car might be used 50 hours or more a week, a five-fold increase. That concept has been raised by experts as a possibility with futuristic car-sharing economies.
“This is a gigantic thing. There will not be as many parking lots and far fewer cars,” Musk said.
Later, Musk told an audience member he rarely convinces anyone to invest in Tesla but conceded, “With self-driving, the car becomes five times more useful, but costs the same amount to build.” Tesla’s Optimus humanoid robot will also benefit from the intelligence obtained from self driving. Without a limit on humans needed to power the economy over the long-term future of robots, he added, “there’s no limit to the size of the size of the economy. These things will happen.”
Musk was also optimistic about the value of SpaceX and Twitter, eventually. For SpaceX, the prospect of producing a reusable Starship spacecraft to land and take off repeatedly from the moon or Mars represents a tremendous cost savings over conventional methods, a reduction of 1,000 times. “It’s impossible to say how profound a change this will be.”
As for Twitter, he predicted it “will ultimately be extremely valuable,” although he somewhat jokingly reminded the audience he had tried to get out of the deal to buy Twitter for $42 billion. He quickly added, “What could possibly go wrong?”
The audience laughed.
In light of recent Tesla crashes, possibly related to Fully Self-Driving functions, there is no question the company faces a bind.Tesla has always said drivers are fully in charge of their vehicles, even with self-driving functions working, but there could be a course correction coming in how Tesla and Musk describe what their cars can do. It might be Tesla's biggest problem is marketing, not necessarily engineering.
*This story has been updated with recent Tesla stock prices, the impact of Tesla crashes and a California law on self-driving. It ran in its original version on Dec. 20.
Matt Hamblen is editor of Fierce Electronics