
GM to build, test thousands of self-driving Bolts in 2018 - prostoalex
http://www.reuters.com/article/us-gm-autonomous-exclusive-idUSKBN15W283
======
brilliantcode
This is the biggest risk I see with TSLA:

\- Incumbent auto giants entrance diminishing Tesla's margins.

\- Incumbent expertise and brand that diminishes Tesla's appeal.

\- First mover disadvantage: rest of auto industry sees large initial ROI by
piggybacking off Tesla

GM can't be the only guys racing to bring Tesla experience to it's existing
brand followers. Luxury makers like BMW, Benz will woo the lion share of the
market Tesla originally pioneered. First movers rarely do well here unless
they've cemented their brand position in the luxury space such as Ferrari,
Lamborghini etc.

tl;dr: When the status quo catches up to Tesla, it will put downward pressure.
Tesla's winning strategy should be to limit quantity and artificially inflate
unit price. It is not equipped to take on dozen automotive brands in the long
run.

Please correct me where I'm wrong.

~~~
DenisM
Tesla is a vertically integrated company, so they have squeezed all the
margins out of their supply chain. The big automakers all share their supply
chain and have to feed it with margins at every level. Same story with SpaceX
- vertically integrated.

The whole integrated/shared thing has been going back and forth in different
industries at different points in time. Apple has been getting more and more
integrated recently whereas earlier wisdom in PC industry was to use shared
components.

Musk is betting that it's time to integrate the automotive industriy. If he is
right, Tesla will balooon to the size of Apple. The electric part is not the
most important here.

~~~
KirinDave
Personally I think Musk doesn't think this way. I think he sees the secondary
aspects of Tesla's work on cars (e.g., the battery plants and larger
infrastructure of the electric car industry and positioning on standards
bodies) as the actual big fish to hunt for.

Tesla cars are nice, but they didn't need to make the entire pipeline. They're
doing that because they want to reuse the pipeline and tech in other
industries.

~~~
baq
I believe Musk means it when he says he wants to wean humanity off of fossil
fuels. The big fish you talk about are definitely means to this end and not
the goal itself.

------
KirinDave
I own a Bolt, and I like it a lot. I have no desire to spend 4x that on a
Tesla that is simply overspec'd for a simple commute car. I derive my self-
esteem in other ways than fancy cars.

Maybe I should have waited for the self-driving version.

~~~
denzil_correa
> I have no desire to spend 4x that on a Tesla that is simply overspec'd for a
> simple commute car

The Model 3 and the Bolt would be similar in costs. Wouldn't it?

~~~
KirinDave
How long is that waiting list again?

Even if I didn't have some special access due to some relatives, I'd still
have a Bolt this month as opposed to mid-next year?

By that time, Chevy will be shipping self-driving ones and according to the
article they're going to NOT be doing that as a 40k addon.

I hope Musk has a very strong transition into a strong luxury brand. The
simple truth is that there is a massive rush on personal transportation and
all the small players are eager to sell to the Toyotas and Chevys of the
world. These people are by and large expats from the early self-driving car
projects.

------
Fricken
'Thousands' is very committed. I wonder if they are doing this to make a
statement, or if they feel rapidly scaling up to a thousands strong prototype
test fleet is the most effective way to accelerate progress towards market
ready L4 robotaxis.

As the analogy goes, just because it takes 1 woman 9 months to make a baby
does not mean 9 woman working together can make a baby in 1 month.

Either way, it's very committed. GM isn't fucking around, they mean business!

~~~
opaque_salmon
I think it's in the same vein as Telsa's strategy of autopilot roll-out
compared to Google's self-driving pilot program. 1000 self-driving vehicles
running for 1 month can collect data at a significantly higher rate than 1
self-driving vehicle running for 1000 months.

~~~
Fricken
It's the quality of the data and what you do with it that really matters. I
think the benefits of crowdsourcing driving data to develop autopilot have
been overstated. Waymo has pointed out that they are making the lion's share
of their progress testing in simulators, where they can play out every
conceivable variation of some strange or difficult edge case in a way that is
not feasible in the real world.

One thing you can do with 1000s of fleet vehicles is begin untangling the
logistics of running a publicly accessible robotaxi network, which will brings
with it a whole new set of problems above and beyond the autonomous os itself.

------
zitterbewegung
A lot of people here are balking on the price for consumers. Looking it at
another way is that the Bolt will be sold to ride sharing companies at 100k
each and they would buy it in a heartbeat.

~~~
oh_sigh
100k is the most generous interpretation of "6 figures". Would ride sharing
companies still buy them at 350k each? At that point it may take 5 years to
break even compared to having a human driving a 35k car

~~~
IanCal
Probably, people are expensive. Minimum wage + employer taxes for a 25 year
old in the UK is roughly £78,000 for 24 hour coverage assuming no overlap and
no illness, no hiring cost, no management.

I'd be interested to see what TCO they'd need to have to no longer be cheaper.

~~~
sib
TIL: Minimum wage for a 25-year-old is ~30% higher than for a 20-year-old in
the UK.

~~~
pbhjpbhj
I've never understood this. Hour does a under-25 need less as a basic income.
They have the same costs and are giving up the same time.

It's really wrong IMO to value 16-25yo lower when considering _minimum_ wages.

------
toomuchtodo
>"If you assume the cost of these autonomous vehicles, the very early ones,
will be six figures, there aren’t very many retail customers that are willing
to go out and spend that kind of money," Ableson said.

"Tesla Narrowly Misses 80,000-Vehicle Sales Goal in 2016"

[https://www.wsj.com/articles/tesla-misses-its-2016-sales-
goa...](https://www.wsj.com/articles/tesla-misses-its-2016-sales-goal-
despite-27-fourth-quarter-rise-1483479562)

~~~
hkmurakami
Well for GM, 80k cars doesn't move the needle.

GM sold 320k cars in December 2016 alone.

[https://www.wsj.com/articles/auto-industry-poised-to-set-
ann...](https://www.wsj.com/articles/auto-industry-poised-to-set-annual-sales-
record-1483541246)

~~~
toomuchtodo
None of those 320k cars GM sold have autopilot hardware sending data back to
the manufacturer for self-driving algorithm refinement. All of those Tesla
vehicles do (Autopilot 2 hardware). New Teslas are delivered every day that
accelerate the rate at which Tesla collects autopilot data.

Hence the comparison.

EDIT: [https://electrek.co/2016/11/13/tesla-autopilot-billion-
miles...](https://electrek.co/2016/11/13/tesla-autopilot-billion-miles-data-
self-driving-program/)

"Tesla has now 1.3 billion miles of Autopilot data going into its new self-
driving program"

There's a reason Tesla picks up the tab for your vehicle's machine to machine
cellular connection. And why it connects to wifi when you're at home.

~~~
hkmurakami
I think you're missing the point that a car manufacturer does not care about
autopilot for autopilot's sake. They care about the feature in so far as it
can drive sales and revenue.

Think about it this way: Companies like Google or Amazon don't launch products
just because the tech is cool or innovative. They only launch products that
can become $1B+ drivers of revenue for them.

(fwiw I am not the one downvoting you)

~~~
pbhjpbhj
>Google or Amazon don't launch products just because the tech is cool or
innovative. //

That is a thing though, have cool stuff that serves as advertising to showoff
your company as being cool & cutting-edge.

Amazon gets a lot of mindshare out of echo beyond the raw value accrued
through sales IMO.

------
sheeshkebab
>"If you assume the cost of these autonomous vehicles, the very early ones,
will be six figures, there aren’t very many retail customers that are willing
to go out and spend that kind of money," Ableson said.

Oh well I guess it will be a few years before I can recline and take a nap in
my robo car while in traffic

~~~
pkamb
You'll _never_ own a robo car, Uber and Lyft and Tesla and GM will.

~~~
jonknee
Why not? It's a technology problem and technology almost magically gets
cheaper over time. I don't see why it won't eventually be like all the other
required safety features (airbags, ABS, etc).

If you live in the middle of SF it might sound silly to own an autonomous
vehicle, but if you live out in rural Sonoma County it is going to sound a lot
less silly. I frequently go out to the mountains and I doubt I'm going to want
to call an Uber to load all my camping gear into and be gone for a week.

~~~
paulddraper
I live in the suburbs and I go on road trips all the time with the family.

About half of my neighbors own RVs.

Self-driving vehicles would be a dream come true.

~~~
ghaff
Furthermore, if it's your own vehicle, fully autonomous mode under certain
pre-defined conditions and roads can still be a huge win. But that constraint
makes the same vehicles basically uninteresting as a shared vehicle taxi
service for the near term.

It's great that all this work is being done but IMO summoning Johnny cab to
take you home from a bar in SF is decades away.

------
bogomipz
I have question given that 2018 is the date to deploy test vehicles how much
time do they need to their tech operationally mature?

I see in the article that they acquired a self-driving tech startup but that
doesn't say much about how much experience that start up brings, and it not
like there's many veterans in this field.

Will they be playing catch up with Tesla, Google et al for years to come or
will the tech soon start becoming commoditized?

------
fnazeeri
I agree with the folks who see this as a serious risk to TSLA. If you've
driven a Model S or Model X you know that the design, the software and the
performance are insane, but the fit and finish (especially of the interior) is
like a 1980s Cadillac. When BMW and Benz start making EVs, TSLA is going to be
pushed hard and could likely end up becoming a software or powertrain T1
supplier.

~~~
drcross
1\. People are not going to avoid a tesla on the basis of a slightly crummy
interior, they sell based on virtue signalling. 2\. The mass produced version
of the Tesla is yet to be revealed and it may have a better finish so this may
be a moot point anyway.

------
a3n
I picture thousands of Bolts rolling off the assembly lines one by one, and
autonomously driving themselves to their assigned dealers.

------
mtgx
Yet they probably don't even encrypt their app's user credentials, as most of
the big car makers seem to be doing:

[https://securelist.com/analysis/publications/77576/mobile-
ap...](https://securelist.com/analysis/publications/77576/mobile-apps-and-
stealing-a-connected-car/)

Good luck to the beta testers buying them.

------
Hasz
This is more a comment on TSLA than GM, but I still feel it's relevant given
the competition between the two.

I don't understand the Gigafactory, from a capital allocation point of view.

Geographically, it's not near any major lithium, cobalt, (economical to
extract) rare earth, etc deposits, and it's not in a traditional manufacturing
area. Maybe they're getting a sweet tax deal. There are a number of tangential
benefits, like heat recycling, solar availability, USA made (given the
currently protectionist administration, but that could change in less than 4
years, max 8) etc, but I'm not sure these benefits outweigh the cost of being
so far from raw material and export lines.

Obviously, the Gigafactory makes batteries, a technology which improves at an
unbelievably slow rate compared to virtually anything else. However, battery
research is an intense area of research focus, and the whole factory is one
Nobel from becoming obselete, barring (probably expensive) retooling. A game
changing improvement is not a matter of if, but when.

TSLA's bet is that this does not happen until they've paid off the asset. If
you makes batteries as a core business, investment in facilities is the cost
of doing business. If you make cars, it's a silly and imprudent experiment in
vertical integration. Why bet the farm when you can pay marginally more for
your batteries and cement the luxury market you already own? Batteries are a
commodity, and at TSLA's scale, they surely can negotiate a good deal.
Realistically, TSLA's target market is fine with absorbing a 2 or 3% increase
in battery cost that a 3rd party supplier would demand.

Given the investment in vertical integration, it seems TSLA is trying to go
after the low/mid-market. Why beats me -- razor thin margins necessitate
scaling incredibly quickly. They are taking an incredible risk for meager
rewards in fiercely contested territory. Contrary to what most outlets will
tell you, Ford/GM/Japanese automakers are not stupid. Slow, yes, but not
stupid. They will move quickly to shred TSLA in the low end market, assuming
they recognize the threat. Not only that, but they take on comparatively
little additional risk in doing so, outside of product development costs. They
don't need to build assembly lines, factories etc, because they already exist.
Even if one mfg misses the electric vehicle trend, it's highly unlikely 6 of
them will.

That's all, and I'd really like a counterargument.

~~~
LAMike
I heard Elon say that if they were to produce 1M cars per year, they would
need to consume all Lithium-Ion batteries produced in the year 2014. Obviously
there will be more batteries produced in 2020, but Tesla's fate would be at
the mercy of the battery producers, which could collude to drive the price of
batteries.

For better or worse, Tesla is hell-bent on vertically integrating every single
aspect of production. I believe they might be working on software that will
allow them to stop relying on NVDA's chips for self driving as well. "First
principles" business model will make or break Tesla/Elon.

------
zodPod
"Bolt"? They really couldn't name it something more identifying and clever
than the self-driving bolt?

I came here thinking they were attempting some way to make things self
assemble. "It's a self driving bolt. You don't have to use a screw driver to
screw it in it does that itself."

Besides, GM building a self driving car feels like letting the people who make
plastic grocery bags make doors for safes or something. Sounds dangerous and
it just sounds like it'll cause the name "Bolt" to stand for "run away
suddenly out of control."...

~~~
aanm1988
Bolt is their electric model. They are adding self driving tech. Why rename
it?

~~~
zodPod
I kind of covered my personal answer to that in my original comment.

It also annoys me that companies name things common English names because that
makes it hard to search for things. "Chevy bolt loose steering" "bolt bolt
size trunk latch" "bolt size for tires"

Ultimately, it's obviously a battle that I'm not going to win because I'd
prefer everything just have a GUID so I can easily identify exactly what I
have. "The Chevrolet B0F30517-BAFE-43EB-BA62-1832AC5272F7"

Lastly, I know it's been a common theme for a long time but it just seems to
keep getting worse. Apple Ping. Chevy Bolt. Chevy Volt. Chevy Spark. Many
different products called Hydrogen etc. Rust. I know of at least 2 products
called Go. It just wouldn't be difficult to change spelling or do something
clever instead of just taking direct, common dictionary words and grabbing
them for your product.

~~~
greglindahl
Search engines easily handle things like [Chevy bolt] once they become popular
enough. [chevy bolt size] in google already shows me stuff related to the
Bolt.

