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Poaching Tesla (aboveavalon.com)
107 points by mercutio2 3 months ago | hide | past | web | favorite | 153 comments



There are some errors here:

> The dramatic shift to SUVs in the U.S. is driven by consumers caring less about traditional car value metrics such as performance.

The cause of this was exactly the opposite -- the CAFE rules classify SUVs as trucks and allow them to fall into a less stringent fuel economy standard. The result allows SUVs to be mass-market gasoline-powered large vehicles with powerful engines, which is no longer possible for things classified as cars. That factor is primarily what caused (big-engined) SUVs to replace station wagons and large performace sedans in the market, and the small car market is as strong as it ever was.

He also calls Ives a visionary more than once, but that was Jobs. Apple has done well under Ives because of his management ability, not his ability to develop new product markets as Jobs did.

Project Titan is a huge gamble. They're essentially trying to buy their way into a market where their competitors have a head start. Apple has the cash to potentially succeed doing that, but they could also spend billions and have it come to nothing, and it's not clear what they're adding that Waymo or Telsa or Uber doesn't already have. It seems to be some combination of "Google is doing it" and the fact that Steve Jobs saw that Telsa was onto something -- but there has been ten years of progress between then and now.

And the speculation that Apple will focus on personalization is odd. Their model is walled-garden, curation, single USB port on the MacBook, everything soldered and nothing modular, any color you want as long as it's black. If anything vehicle personalization is going to become less prevalant with autonomous vehicles as it makes it easier to share vehicles if they can show up at the location of whichever part-owner needs it at a given time, or be leased out for ride sharing when not in use.


> Project Titan is a huge gamble.

Titan is not a gamble. It's a hobby. And from the eyes of a Trillion Dollar Company, it's not even an expensive one.

What's the worst that can happen? They spend a few more years on it, poaching talent from Tesla and other car companies and from internal teams, and end up with nothing. Sure, they might spend a few billion in the process, but they already did that building a spaceship, and spending at that level doesn't hurt their books at all.

iPhone on the other hand, was a huge gamble at the time. It had the potential to ruin the company by cannibalizing iPod sales, diluting the brand, and destroying morale of top engineers who were at the time the "best" employees they had.

What's the best thing that can happen? They launch the equivalent of an iPhone in the auto industry, figure out how to scale, and change the way people go from point a to b. They are recognized as the company that pulled off something Tesla couldn't, and Tim Cook / Jony Ives get to put their names on a revolutionary product that changed the world again.

So it's a low risk high return situation for them to work on it. Can they pull it off? I would say much more likely than "traditional" auto companies but less likely than Tesla. But again, it doesn't really matter to them (part of why chances of success are lower), and competition is a good thing. As a shareholder of TSLA, I don't want to see Elon Musk smoking weed on YouTube anymore. Somebody please take away his Twitter account too.


> As a shareholder of TSLA, I don't want to see Elon Musk smoking weed on YouTube anymore.

Much ado about nothing. One puff when it was offered to him. So what? He was much more affected by the whiskey, but curiously no one has a problem with that. He even made it clear that he doesn't use weed because he feels it affects his productivity. All you're upset about is a nonsensical stigma.

Furthermore, the actual content of the interview was interesting.

Stop trying to turn Elon into a yet another fake CEO.


I’m wondering if the weed smoking (that no one ought to care about practically/medically) will cause his security clearance to be reviewed/revoked, what impact that may have on Space-X, and what impact that overall distraction will have on Tesla.

Also not sure if Tesla has government contracts of significance where a security clearance would be relevant.


smoking weed is not the problem

the problem is, he said he doesn't smoke weed because it decreases productivity, and then smokes weed anyways.

Nothing he said makes sense anymore


He took one puff of weed on a casual podcast at ~11 p.m. local time. Not certain this is the canary in the coal mine some people are making it out to be... but I guess volatile stocks will find reasons to be volatile?


The problem is that most of the people who run the economy and the Government are still from a generation that views cannabis consumption as dangerous, anti-establishment drug use not appropriate for people they consider as "proper". This view has been codified into law by Marijuana ban laws, and as I realized just today, into banning it from being used by anyone with a security clearance.

As far as we've come with legalizing marijuana and shifting societies perception about cannabis, the vestiges of the old order still exist.


You're absolutely right; but I have a hard time believing this depresses stock valuations with so much smart money out there (by ~20% no less!).

Otherwise I think there's a serious market opportunity to be exploited.


This is not smart money fleeing, it is old money.

Why would all of today’s young engineers, who collectively consume marijuana and concentrates by the ton, suddenly take issue with one of their foremost peers partaking in the same activity? It makes more sense that the older investors who are making a bet on this generation’s promising stallion, in their eyes, are seeing what is to them, aberrant behavior. Given how often and well honored the theme of “older generation not progressing with the times” is, seems much more likely especially when thought in the same context as Occam’s Assertion.


AGAIN, smoking weed is not the problem. I don't mind him smoking weed

The problem is that, he said he wouldn't do X because he thinks it decreases productivity, and then goes and does X.

That's the problem


My point was that I don't think there's a ton of productivity to be lost by smoking 1 puff in the middle of the night vs. smoking a whole joint in the middle of the day.

The "X" in this case has too wide of a range of interpretation to jump the gun on hypocrisy.


For me, eating reduces productivity, as well as drinking alcohol, so I abstain from both while working. The distinction being that while working I modify my behavior to be productive, however, during leisure time I do not have the goal of being productive, I have the goal of relaxation and my preferences now include food and sometimes drink.


> my preferences include food

How long do you go without eating? I find that fasting increases mental clarity.


On average, I work 8-10 hours before eating because I choose to eat in a way that is time consuming. Every meal is cooked using basic cuts of meat and vegetables as they were grown. This takes time to prepare but not much skill. I use my attentive hours to work and choose to cook during my less attentive hours.


The problem is that it was wreckless and unpredictable. How can you trust someone with your money when they are behaving in a way that is unpredictable and careless.


> As a shareholder of TSLA, I don't want to see Elon Musk smoking weed on YouTube anymore

But the whiskey was ok with you? Should CEO's have to hide their recreational drug (of which alcohol is a subset) use?

FWIW I also hold TSLA and want to see them succeed but a puff of weed (that he didn't inhale) is the least of our concerns.

That said, we can probably both agree 3 hours of sleep rather than an interview with Joe Rogan probably would have been the smart move.


Personally, I'm entirely ok with normalizing marijuana usage. It has been legal all year here in SF, and de facto legal for years before that. Nothing bad happened. I'd love for the rest of the country to get over the moral panic on it.

That said, I think Musk's move was colossally dumb. Tesla's valuation is based in large part on future expectations, and those expectations are deeply tied with Musk personally in a way that's true for very few other companies.

If Tesla were in the black and shipping lots of cars, he could have done this happily. But people have a lot of very reasonable concerns about Tesla. One of those concerns is that the CEO is getting erratic under pressure. Publicly dating and breaking up with a pop star. Spending his time shitposting on Twitter. Calling a hero of the Thai cave rescue a pedophile, and then doubling down on it. Announcing he was taking the company private and then changing his mind.

Given that, video of him smoking weed would have been foolish on its own. Doing that at the same time Tesla announced two executive resignations? Absurd. And given that one of those resignations was the Chief Accounting Officer leaving after 29 days? Plain dumb. It makes him look entirely irresponsible.

Is he being irresponsible with the business? Who knows. But Musk knows better than anybody how much of Tesla's valuation is based on his own very personalized PR efforts. He should go find a crisis communications consultant. And then listen to them.


> He should go find a crisis communications consultant. And then listen to them.

What I don't understand is, why isn't the board putting him under severe pressure to do this? Something like: Musk old buddy old pal, you need to pull your head in for another year or so, then maybe he can go on a "sabbatical", without your Twitter password, and have a massive bender.


Isn’t tesla one of those companies were the board and voting rights on the stock were set up in such a way that the board has very little control, sort of like Zuckerberg and Facebook? ?


As I understand it, the board is set up to require something like a 90% vote for something like that, and it’s loaded with his friends. It’s a good setup for getting things done in a hurry in accordance with one man’s vision, but now... it’s pretty much useless.


> and it’s loaded with his friends.

All the more embarrassing for them!


The board of any company is selected by the shareholders, and the biggest shareholder of TSLA is Musk.


Does constitution of Tesla lack rule of exclusion for board elections? Musk should not have been able to vote for himself.


> Chief Accounting Officer leaving after 29 days?

The narrative seems to be that the person joined, and then left because of Musk's erratic public behaviors. What really concerns me is what the guy found out to leave so quickly. Or what Musk did to him that made him leave.

Not sure if its different for C-level folks but changing jobs is a huge personal decision that people generally don't take lightly. The person had to have know about the erratic public behavior before, so maybe it was something else.


If the CEO is appearing erratic under pressure, we might investigate where it is being applied and who is applying that pressure.

> Investors are nervous because CEO appears erratic under pressure.

> Investors apply pressure in response to erratic behavior.

If an investor truly believes that he’s acting erratic under pressure, then the best response is not changing the type of pressure to societal and financial pressure.


The best response for the investor who loses confidence in the CEO of a company they’ve invested in where the CEO is personally a large part of the valuation of the company is to salvage as much value as they can and GTFO.

The investor isn’t interested in what’s best for the CEO or company further than the extent to which that’s good for the investor.


> The investor isn’t interested in what’s best for the CEO or company further than the extent to which that’s good for the investor.

Someone who owns shares in a company like this has multiple options. One option is to sell your shares and be done with it, assuming you think the problem is insurmountable. But if you remain invested, you can still do things that reduce the problem or things that exacerbate the problem. The last one seems particularly counterproductive.


One of Tesla's PR angles is that they are anti-establishment and different from the corporate automobile industry. So Musk smoking weed plays into that well.

Controversy is not always a bad thing, even when your company has problems.


> If Tesla were in the black and shipping lots of cars, he could have done this happily. But people have a lot of very reasonable concerns about Tesla.

There is also this business with the short sellers. That may explain at least part of this lately -- all people regularly do random small-scale unwise things but most of the time (even for celebrities) nobody cares. But take some rich short sellers who already kind of dislike you and publicly challenge them to a duel, when they already had a profit motive to cause your company's shares to decline, and is it any surprise if they put their dirt finding and publicizing apparatus into overdrive?

That still doesn't excuse Musk's behavior. Especially since this should have been a predictable consequence of challenging them so he should be keeping his nose extra clean. But it isn't an implausible explanation for the sudden rise in bad press.


There are likely many short-sellers of Tesla who wish Musk would succeed.

I’m in that camp. I want viable, cost-effective on their own merits, electric cars. I want a vibrant, accessible space industry. I want extra-terrestrial coloNization planning.

I’m short TSLA (about 25% of my liquid investment balance) since the summer not because I hate Musk, but because I believe it’s personally profitable to be so due to the utterly insane valuation. Near flawless execution is baked in on a manufacturing company likely less than 15 months from being out of cash.

I wish Musk well. I hope he navigates through the challenges ahead for the good of humankind. Even if he does so fairly successfully, I like the expected value of my short position.


> Near flawless execution is baked in on a manufacturing company likely less than 15 months from being out of cash.

I'm less sure about that. They have risk, certainly, but they could stumble somewhat or have to raise more funding and still ultimately end up doing as much business as Ford or GM.

Their valuation is slightly higher than that because if everything really goes their way they could end up as the electric version of Toyota at more than three times their current market cap. With higher margins because of the simpler powertrain, which reduces both manufacturing costs for Tesla and maintenance costs for customers who are correspondingly more willing to pay a higher purchase price.

Or they could fail outright or become a small irrelevant electric supercar company.

The efficient market hypothesis says their valuation should approximate their risk-adjusted actual value. Which is always wrong by a little, usually not by a lot.

The interesting thing here is that they're a rather large company that nonetheless has potentially high volatility, which is actually pretty unusual, and invites speculation (and therefore drama). And if a $45B valuation is a result of a 40% chance at a continued $45B valuation and a 15% chance at a $180B valuation, the valuation is correct even though some people may lose their shirts. We just don't know which people yet.


Are you applying a 0% discount rate to future outcomes above?

No sane investor will pay $45 for a 40% chance of $45 and 15% chance of $180 in 8 or 10 years.

(I agree with your premise, but the numbers need to be larger such that their present value, not future value solves.)


Yes, of course, it's all back of the envelope. Assume the future numbers are in net present value. Or assign some non-zero value to the 45% probability that they "fail" in the sense of losing value, since it presumably wouldn't be a 100% write off even then.


I have no sympathy here; the short-sellers are Musk's own creation.

Even after the big selloff, Tesla's market cap is still higher than GM's. Its valuation is extraordinarily high in large part because Musk has hyped it to the heavens. That has given him an amazingly low cost of capital and enormous free advertising. But the downside is that people who aren't drinking the koolaid can reasonably think that the valuation is too high, and want to bet accordingly. GM has 1/10th the short position because most people think the stock is priced correctly. Tl;dr: Musk's hype made some people go long and some go short. That's what talking a stock up does.

The rise in bad press isn't primarily due to the short-sellers. Plenty of reasonable analysts are concerned about Tesla's repeated failure to meet projections, long-running manufacturing issues, and bad cash position. That's a good chunk of the press. But I think the bulk of it comes from a) the inevitable turning of the hype cycle, and b) Musk's own public antics. Short-sellers didn't make him call a hero a pedophile. They didn't make him spend a lot of time shitposting on Twitter. They didn't make him sell flamethrowers or date Grimes or have Azlea Banks over. They didn't make him smoke weed on camera. They certainly didn't make him write to a reporter to double down, calling the cave diver a "child rapist". [1]

I feel bad for the guy; I know from personal experience that entrepreneurship is high stress. But he knew what he was getting into, and he could be handling this a lot better.

[1] https://www.buzzfeednews.com/article/ryanmac/elon-musk-thai-...


> Even after the big selloff, Tesla's market cap is still higher than GM's.

Part of that is because GM has a low valuation relative to e.g. their sales volume, because they not so long ago had to be bailed out by the government, are loaded up with debt, and are facing the prospect of a market shift toward electric and autonomous cars that may favor new entrants over incumbents.

> Plenty of reasonable analysts are concerned about Tesla's repeated failure to meet projections, long-running manufacturing issues, and bad cash position. That's a good chunk of the press.

Sure, but none of that is really new and is the sort of thing analysts always cover about any company.

> Short-sellers didn't make him call a hero a pedophile. They didn't make him spend a lot of time shitposting on Twitter. They didn't make him sell flamethrowers or date Grimes or have Azlea Banks over. They didn't make him smoke weed on camera. They certainly didn't make him write to a reporter to double down, calling the cave diver a "child rapist".

It's not that they made him do it, it's that they may be spurring coverage of things like that even though they have little to do with the fundamentals of the business. Half the people are saying he should take a vacation and the other half (or maybe the same people) are saying he shouldn't be wasting time shitposting on Twitter as though he should be working 24/7. So is he working too much or not enough?


> Half the people are saying he should take a vacation and the other half (or maybe the same people) are saying he shouldn't be wasting time shitposting on Twitter as though he should be working 24/7. So is he working too much or not enough?

It's more probable than not that he should take a short vacation (or some other kind of break) and stop shit-posting on Twitter. Those aren't mutually exclusive options.

Temporarily taking a slightly lower profile and spending his focus on things that actually matter to his companies (cave divers, pop stars, and short-sellers are not in that set, IMO) would probably be good for everyone/everything that Musk cares about.


I agree with you, because people care about these things when they shouldn't, but given that fact that they do anyway, continuing to do them is unhelpful.

What I'm asking is, why do people care? It can't just be because other people do. It takes a significant number of people to care for no good reason before it makes sense to care just because other people do.

It's simultaneously possible to be against Musk continuing to do things like that and be against the media continuing to cover it as though it should matter.


A huge part of Tesla’s value is wrapped up in the Musk mystique. If/as that starts to tarnish and crack, the valuation of the company is reduced as some investors decide it’s no longer for them.

As to why other people care, people love celebrity gossip, especially “bad” gossip. It sells ads and clicks and generates conversation. At some point, it becomes self-sustaining. I agree that it’s terribly uninteresting in general to me.

Note that I believe his erratic and lightly considered Twitter posts are one thing (ignorable) generally, but I think the $420/“funding secured” tweet to be much more likely legitimate news and quite likely of the “watch me burn these shorts!” securities fraud variety. There is an extent to which such legitimate interest in that tweet brings interest in his other tweets to understand whether the CEO of a many-multi-billion market cap company is prone to communications that put his company/others’ investments at risk. I suspect that extent is less than what is being covered, because it’s a justification for why (largely) respected financial news sources are now able to cover salacious details of his private life with plausible explanation as to why.


Telsa is the Elon Musk Show. Most people can't even name the CEO of another car company. For better or worse, the valuation of Telsa is predicated on the perceived genius leadership of Musk. And that is entirely due to choices made by Musk.

He could have pursued Tesla in a quiet, modest way. Instea of making bold predictions, he could have underpromised and overdelivered, letting results do the talking. He could have stayed out of the limelight, remaining just another CEO.

We all know what he did instead. And that surely got him a low cost of capital and a ton of free PR, so it's reasonable to argue it was the right business move. But having put himself in the spotlight and made it all about Elon, I don't think it's reasonable to claim it's unfair that he's now in the spotlight.

If we're being purely rational, people shouldn't care about the technology genius mystique, and they shouldn't worship high-profile business executives. But they do, and Musk grabbed that with both hands. He can't do that, glory in the upsides, and be upset about the downsides. It's a package deal.


>But the whiskey was ok with you? Should CEO's have to hide their recreational drug (of which alcohol is a subset) use?

Yes, given the fact that weed isn't federally legal and the fact that it could compromise SpaceX contracts with the air force it shows a shocking lack of judgment. It looks like he's coming unglued.

Until weed is actually legal federally, it's absolutely insane for the face of such a large company to take that risk.

Not a moral judgment, just a legal reality.


> it could compromise SpaceX contracts with the air force

If that's true, then you have a good point that I hadn't considered. I can't fathom that could ever become a reality, but my "that will never happen" sense has been way off lately.


The USAF definitely noticed. He technically shouldn't be able to maintain his security clearance after this. It's probably going to amount to nothing, but it's still bad- https://www.theverge.com/2018/9/7/17833208/elon-musk-air-for...


A USAF public affairs officer (Capt Hope Cronin) put out a statement denying those false allegations.

https://www.reuters.com/article/us-tesla-musk-air-force/repo...

The articles floating around are all speculation designed to pull in click/views, which you can immediately tell since none of them cited a source and even worse, mentioned having a source.

The Verge has recently turned mostly into a clickbaity outlet. I stopped visiting the site after I watched the Tesla Q2 2018 conference and them immediately releasing a video with a sensational headline claiming many things like "Elon almost lost his job", “Tesla is in trouble” which contradict the facts and were not representative of the event at all.


This is fake news. Time to update your sources. If this was an issue for a clearance, then you might as well insta-ban the majority of holders.


It is an issue for clearance. You can get by with admitting to past youthful indiscretions during the background investigation but you absolutely can't actively violate federal law and keep a security clearance.


At best, it's uncharted territory. Someone will have to lose their security clearance for using marijuana, then they will sue the government, then the court will decide whether or not state laws can override federal laws here.

The fact that the federal government has not pressed the issue is telling as to which way they think courts will rule.


There can be a big difference between doing something you’re not supposed to and FLONTING that you’re doing it.

Add to that his level of importance (vs some military office worker with a clearance) and I’d say he’s at a much higher risk.


> There can be a big difference between doing something you’re not supposed to and FLONTING that you’re doing it.

Flaunting it actually makes it less of a security risk in some ways; for one things no one is going to blackmail him with the threat of exposing it.


Interesting. I actually dictated that to Siri and that’s how she chose to spell it. I see now it’s not a word.

I thought it looked off but I figured she knew better than I did. It’s not exactly word I use all the time.


Clearance is about being compromised. Do you think Musk would reveal state secrets in exchange for weed? Do you think he would exchange state secrets to avoid the public finding out he smokes weed?

The agent who interviewed me said, "Are you the kind of person who speeds and owns up to it, or are you the kind of person who speeds and lies about it?" One of those is risky but generally acceptable.

I dunno. We're in a weird time. I can point to a few people that, i think, should not have clearances. But compartmentalization is a thing, perhaps those folks don't have a need to know the kinds of things i worry about.

My super casual, outside observer view is, the military might provide some facts and figures about payloads, but they're not saying this telescope can resolve .1mm from geosynchronous orbit. they're saying, it weighs this much and can withstand this much acceleration. There will likely be new revised policies on what's shared with spaceX about their payloads. But does anyone think Musk actions would lead him to be compromised?


It's also about the ability to follow rules (arbitrary or not). If you can't be trusted to follow the rules about not doing drugs, why should they assume you can be trusted to follow the rules about protecting classified information?

(That represents my understanding of the clearance processes' view of the issue, not my personal beliefs).


My, very shallow, understanding is, people can’t follow rules. There are a few rare individuals that can, but not the tens of thousands that are required.


Having once held a U.S. security clearance, I can guarantee you that Defense Intelligence Agency investigators are going to have a word or two with Musk. Occasional "experimental" marijuana use prior to the clearance issuance is often waived, but any use after can be a bit of a problem.


True for the most part regarding waivers on service members and civilian federal employees. But false in this case, see above.


Not saying the clearance will be revoked, rather a "Please don't do that again" accompanied with a mild finger wag.


> Should CEO's have to hide their recreational drug (of which alcohol is a subset) use?

It’s not even about the drug use. Just a general lack of professionalism. Like if he showed up for this interview and ate 3 gallons of ice cream. Why is he participating in such stupid bits for a radio show?

The galaxy brain take is that Elon has always been doing this, and his dumb flamethrower thing is what should get people mad. Don’t tweet about lack of sleep while wasting your time on dumb jokes

I mean people are allowed to have fun , but a bit less so when the company they’re supposed to be running is supposedly falling apart


> Just a general lack of professionalism

This is the final straw in this regard!? This is nothing. It's just him smoking a spliff on Joe Rogan's podcast. He's done like ten more ridiculous things that are unprofessional in public in the last 6 months that I can recall off the top of my head.


> Titan is not a gamble. It's a hobby. And from the eyes of a Trillion Dollar Company, it's not even an expensive one.

Gambling billions of dollars is gambling billions of dollars even when you have a trillion. And everything is tiny compared to their capitalization. They could buy General Motors and burn it to the ground for ~4% of their market cap. That doesn't make it a good idea.

The question isn't what percent of their company size it is, it's whether it's a cost effective use of shareholder money. And best case vs. worst case doesn't tell you anything until you consider the probability of each.


To me, a business decision is always based on _relative_ risk to reward ratio. If you're a startup hiring employee number 3 vs Google hiring employee number 739813, your risk profile is completely different, but the absolute dollar investment in one employee is about the same. In that scenario hiring an employee number 3 could be a huge gamble in a way that hiring employee number 739813 could never be.

But lets leave out the technicalities. Call it a gamble, stupid investment, whatever. Yes, I agree a billion is a lot of money. Apple still needs to have this project, in order to stay relevant to competitors and current/potential employees. Even if it does fail, the side effects of having this project mainly to attract talented engineers and stay relevant make it worth the investment.


> To me, a business decision is always based on _relative_ risk to reward ratio. If you're a startup hiring employee number 3 vs Google hiring employee number 739813, your risk profile is completely different, but the absolute dollar investment in one employee is about the same. In that scenario hiring an employee number 3 could be a huge gamble in a way that hiring employee number 739813 could never be.

Sure, but that's mostly because a startup has a very high risk profile, because success or failure is existential. In nearly all other cases, even for smallish companies, the risk is lower, even for employee number 3. If you're a small doctor's office and you hire a crappy receptionist, you'll have a bad time but you'll survive. If your startup hires a bad marketing person and some competitor popularizes their tech before you do, game over.

And once we're not talking about existential risk, we're talking about dollar risk. Which doesn't depend that much on who you are. If it costs ten billion dollars to have a 10% chance to make fifty billion dollars, is it worth it?

> Apple still needs to have this project, in order to stay relevant to competitors and current/potential employees. Even if it does fail, the side effects of having this project mainly to attract talented engineers and stay relevant make it worth the investment.

But it's a secret. How is it helping them attract anyone if nobody knows about it? They may even have something actually interesting but we won't know until they reveal it (or it leaks), and in the meantime it sounds like pretty boring and expensive follow-the-leader behavior.

And if it does fail they won't even tell anyone about it.


One difference is that the amount of starting capital matters. Say someone tells you that you can spend a million dollars for a 1% chance at a trillion dollars. That makes perfect sense for Apple, but I’d question your judgement if you throw your life savings into that gamble. That’s because the value of a marginal dollar is worth a lot less when you already have a lot of money. To see another example, consider the value that Bill Gates gets from having an extra $100,000 (essentially none) versus a homeless person (life changing).


> One difference is that the amount of starting capital matters.

Well, yes and no. If you're incommunicado in some kind of locked room with a timebombed offer, sure, if you can't afford to lose the money you say no. But if someone actually offered you a 1% chance at a trillion dollars for a million dollars, you take the offer and then immediately sell the company that owns the contract for ten billion dollars and pocket the ten billion dollars.

Or sell half of it for five billion dollars and keep the other half.


> But it's a secret. How is it helping them attract anyone if nobody knows about it?

They don't need to announce it publicly. Only to intended recipients.


> It had the potential to ruin the company by cannibalizing iPod sales

It would only cannibalize iPod sales if it was a success, and then it isn't a problem at all.


It’s not even a hobby. If something comes out of it, they’ll completely remake the category. I seriously doubt their end goal is a car in the way we understand them to be.


elon probably didn't smoke weed because of a lack of competition... probably the opposite actually. the man is in a complete burnout.


The iPhone doesn't stand out as customizable because, compared to its current competition, it's not. But it's massively more customizable than what was on the market before, thanks to the app store. Yes, it's software-based customization, but the hardware is so strong that that's still huge. Again, if you compare to Android, the options seem limited ... now. But compare to the then current state of the art, where you could install custom software, if you could find it, but few people actually did. Apple enabled a staggering degree of customization that we take for granted now.

I don't think Apple's going to create modular cars where you can swap out hardware or that just come in a variety of form factors. If they create customizable cars (if they get into the car biz at all), it'll be through software. Tesla already hints at some of the possibilities here: on the same hardware platform you can upgrade your autopilot or performance, even your range. (I have a 60D, which has a 75KWh battery. I can order an online software upgrade to a 75D for $2K.) That's just what Tesla already does. I can't imagine what Apple might offer, but the possibilities are intriguing.


This isn't a "software upgrade" it's a "software lock" on your hardware that they will remove for $X


It's an upgrade from my perspective. I paid $10K less than I would have paid for a 75D. But I take your point. It's not the best example. Nor are the other two I offered. But they're the best I can come up with, and I think they hint at the possibilities for software-customizable cars.


You don't think you're paying for the hardware? So you think Tesla takes a loss whenever it sells a car with Autopilot hardware for which the customers don't buy the software upgrade?

If they don't, then you're already paying for it. I think it was a mistake to do it like this, and it made all Model 3's more expensive than they could have been.


Yep, that’s rampant in the electronic test equipment industry. Keysight will sell you a $13k box, with $26k of hardware options to enable.


It’s the business model IBM basically pioneered that rocketed them to the top of the mainframe space.

It may be new in the world of consumer cars, but it’s not new under the sun.


You’re missing the point on SUVs. I’m 6’5” and have 3 kids. I need a full size car that can accommodate the legally mandated safety requirements for my kids.

No sedan meets that requirement. I have to buy a midsize+ SUV or minivan, period.

Even for my personal use, cars are uncomfortable and painful for me to use. I drove a 1999 Accord until recently as a commuter. The 2018 Accord was too low for me (to meet the CAFE targets) and most midsize sedans has similar challenges. I ended up choosing between a Honda Fit, a Honda Pilot, BMW X3 or Chevy Tahoe. I ended up with the Pilot as a trade off between comfort/efficiency/cost.

The fetishization of ridesharing in the Valley and on HN reveals the blind spot of the culture of tech — family. Try using Uber to move two adults and 2-3 kids.


To be fair: while large on the outside, the interior space of many modern SUVs isn't great either. So you need either a large SUV, a classic station wagon, a minivan or any other car designed for space. Incidentally I have a friend who is also 6'5", and he ended up with a Golf Variant, as this turned out the most comfortable car for him back then.


Apple can choose to enter the market when it's good and ready. That is, when it knows it has a very solid product that brings clear advantage. If it can't find that, keep looking or stop.

Tesla is on a death match to outrun the rest of the auto industry. It can't afford mistakes. If 3 doesn't work it's screwed. Musk pushes those people so hard they could well burn out first.

I'd much rather be Apple than Tesla.


The CAFE rules explain why SUVs emerged in the past, but over the past decade many SUVs have been classified as cars under CAFE standards. Most crossovers are now classified as cars.


Anecdotal: I prefer a sedan over SUVs, but there are so many SUVs in the US that I feel my view is frequently blocked by all the high SUVs when not in a SUV myself.


This is a big reason why people buy SUV's. That, and the belief it's safer since momentum is mass*velocity, so the winner in a crash favors the heavier car. I think we need some more taxes to punish the externalities of driving taller/bigger/heavier vehicles.


The sad thing is that they have the math wrong. Whether you live or die depends more on what the other person is driving than what you are. Car vs. car both people live, truck vs. truck both people die. The extra mass isn't making you safer, it's just killing the other guy because there is a limit to how much total force crumple zones and other safety features can absorb.


The IIHS disagrees... https://www.iihs.org/iihs/news/desktopnews/new-crash-tests-d... smaller cars arent as safe as bigger ones


That's talking about "mini cars" like Smart that are so tiny they actually are compromising safety for weight, not normal sized sedans.

For example:

> The second factor is vehicle size, specifically the distance from the front of a vehicle to its occupant compartment. The longer this is, the lower the forces on the occupants.

A compact car and a crossover are typically about the same length. A "mini car" is shorter than that, which is what compromises its safety. And unlike making the vehicle heavier, making the nose longer doesn't harm the occupants of the other vehicle in a two party collision, and does actually help you in a collision with a massive stationary object (e.g. overpass) whereas weight in that case does almost nothing.


That’s the one thing I missed when I moved down to a sedan.

It’s not actually that bad, which I was quite worried about, but it is an inconvenience.

The irony is when I started driving a van or an SUV would let you see above almost everyone and give you a great view. Everyone moved up for that reason (among others) and now it’s not an advantage at all.


This is mostly because hybrids have brought the car averages up enough that they can now sell larger "cars" without blowing their targets.

And crossovers are cars. A Subaru Forester used to be called a station wagon, now it's a crossover.

Most of them also have a similar power to weight ratio to a 1980s 5.0 liter V8 Mustang, so I still don't see the argument that people stopped caring about performance.


I think some of the SUV numbers come from the classification of vehicles as SUV that really aren't SUVs in the traditional sense.

I have a Kia Niro that is classified as an SUV by the manufacture and insurance company. It gets about 50mpg in the summer. I look at it and compare it to my old 1984 Chevy Citation II. It is almost the same size and the Citation was a "hatchback". Look, your crossover is a station wagon, and a lot of SUVs are just hatchbacks.


The classifications are not consistent and often don't mean anything. For example, the Niro is not classified as an SUV by the CAFE standards the OP is talking about. The Insurance Institute for Highway Safety also calls it a small car and a 4 door wagon (https://m.iihs.org/iihs/ratings/vehicle/v/kia/niro-hybrid-4-...)


Whether Ive is a visionary is ancillary to the point. The vision of the robotaxi has been had by many, including myself long before autonomous vehicles were regarded as anything less than science fiction. What matters to Apple and everyone else is execution.

Robotaxis will be more personalized than privately owned ones. Rather than be limited to a single one-sided fits all form factor for all your transportation needs, you'll be able to call upon the optimal vehicle depending on whether you're commuting, hauling a load, going on a road trip, spending a lavish night on the town, or sending your kids to soccer practice.


> Rather than be limited to a single one-sided fits all form factor for all your transportation needs, you'll be able to call upon the optimal vehicle depending on whether you're commuting, hauling a load, going on a road trip, spending a lavish night on the town, or sending your kids to soccer practice.

This is the opposite of personalization. It's commodification. Instead of your car personalized to your specifications to fit into your niche, you get a dozen generic categories and decide that today you'll be summoning Generic Touring Vehicle but tomorrow it will be Generic Multi-Personnel Transport Vehicle or Generic Light Duty Towing Vehicle.

The fact that they offer fries in three different sizes doesn't mean yours is personalized because you picked the medium one.


What does personalized mean then if it doesn't mean tailored to suit your needs? What do personalized fries look like if it doesn't mean getting the size/type of French fries you asked for?


It means the one you got is not interchangeable with the one anybody else got in some non-frivolous way. It's not personalization when fifty other people got exactly the same thing. Buses aren't personalized just because they each go to a different place.


I don't get it. Cars are mass produced, they make millions of them, all same. Between one person's Honda civic and another, what's the non-frivilous difference?


There isn't one. Existing cars aren't personalized by the factory. Some people personalize their own after the fact.

Other examples of personalized things: A caricature of you drawn at a carnival, the local chef who knows just how you like your meal, that thing your nephew made you in shop class, etc.

In tech it usually means using the surveillance the company has conducted on you to make search suggestions and things like that. But people are increasingly finding that creepy and invasive, so it's not clear more of that is going to be a winner in the transportation market. Even historically it has been mostly backfill to rationalize the surveillance. Having some cloud surveillance technology literally following you around and recording your whereabouts isn't exactly the same kind of warm feeling you get from your favorite chef knowing how you like your dinner.


Your car is blue, black, red, or whatever. It may have bigger/wider wheels, a spoiler, a better radio, stickers on its back that express your preferences, those sunglasses in its glove compartment that you never use, but have fond memories of, etc.

Whether those are frivolous, I think is in the eye of the beholder.


> Ives because of his management ability, not his ability to develop new product markets as Jobs did.

Did you mean Cook?


> Did you mean Cook?

You're right, I was thinking of Cook. I would actually be more inclined to agree with calling Jony Ive a visionary when I haven't confused the two of them with each other.

It's really still the same trouble though. It's good that they have Ive to do his piece, but they still need someone to do the separate piece that Jobs used to do.


Yes he did. And it’s funny to see someone repeat an oppinion they’ve obviously just read but didn’t understand the contents of eg “Jobs was a visionary, Cook is a great manager” and then just assume that Ives is Cook because someone mentions him as Apples visionary.


> it's not clear what they're adding that Waymo or Telsa or Uber doesn't already have.

It’s not clear what they’re adding that BlackBerry and Nokia or Motorola doesn’t already have..

— something we could have said just before iPhone arrived.


But it was clear what the iPhone was adding. Capacitive multitouch, big screen, desktop browser on mobile, etc...


That wasn’t clear at all. None of that was public before they launched. And when they did launch the entire industry was saying “touchscreens suck, who cares about desktop browser pages aren’t designed for that, we have WAP for that!”

So no, it wasn’t clear for any outsiders that he iPhone was even going to be a success. And like plenty times before people where predicting the death of Apple due to their stupidity of going into a different market.


It's not clear what they're adding that iOS or Android doesn't already have -- something we could have said just before Windows Phone 7 arrived.


> Even acquisitions that included consumer-facing products like Beats, Beddit, and Shazam (pending approval) were ultimately about the technology behind the products.

I doubt the Beats acquisition is about the technology behind their headphones, especially with their questionable acoustics engineering [1]. The music service sounds more plausible, but then it wouldn't be about technology either.

[1]: https://www.designnews.com/gadget-freak/beats-dre-teardown-w...


Financially, it doesn't make sense. Getting into the car business would pull down Apple's stock. Apple is in a high-margin business. Autos are a low-margin business. When a high-margin company buys a low-margin one, the return on investment declines.

That's the reason Apple can't acquire other large companies. Few companies have Apple's margins. Most acquisitions would drag them down. Even if they're profitable.


In a world where Apple chooses to invest scarce cash in A or B, with B being low-margin, and then choosing B.

Not in a world where Apple's cash isn't so scarce that it has to choose either, but can choose both.

The real question is, do investments in the car space get it a better return than whatever the return they had on their cash, which was likely quite small, too, and with no upside.


Apple can always use that cash to buy back its stock. Spending it on Tesla has to get better returns than buying back itself for it to be worthwhile.


> This lack of fresh perspective in automobile design is one factor likely fueling the growing interest in bikes and scooters in high density areas

Cars suffer from a tragedy of the commons, even if you have the best Apple iCar in the world with self-driving, you will still get stuck in traffic because of all the people who don't.

If Apple wants to improve the experience of cars they need to start a political party because that is a local governance problem not a design problem.


Why do people insist on using the word "poach" when referring to people who were offered and accepted a new and usually better job or pay by a competing firm? It gives a negative connotation to a happy event for someone.


You answered your own question. It's used to recast the employee as property of their employer, and the act of offering them another job as dishonourable.


The deck is already so stacked against workers - we shouldn’t be perpetuating these terms


Once cars are shared and autonomous they're going to be like riding a private bus, plane or train (or an Uber without a driver). You'll be staring at your phone/laptop/iPad for the whole ride and will not be personalizing anything but the sound playing over the speakers.

An Apple Care would be as if Apple wanted to get into the house market. HomeKit+devices, Apple TV, HomePod etc. are analogous to what Apple could achieve in the car space. I can't see them releasing anything better than a fully autonomous Tesla that allows you to AirPlay to the center screen.

It almost saddens me to see them poaching talent from Tesla when Tesla has so much momentum right now. I don't see Apple achieving anything Tesla won't in the long term. Instead, they're just going to delay how long it takes Tesla to get there.


> Even acquisitions that included consumer-facing products like Beats, Beddit, and Shazam (pending approval) were ultimately about the technology behind the products.

Err, Beats? Their technology was shit, Apple bought a millenial brand.


Beats was purchased for the excellent music service and people.

The headphone brand was a nice to have, premium image and all.

Apple didn’t need people to tell them how to make headphones, they were already capable of that.


Yup. I wouldn't give up my three K141s for a truck loaded with Beats phones, but try asking to any teen out there.


I remember someone tearing down fake beats and finding more expensive drivers in them than in the original thing beats are garbage.


I have a feeling that:

a) Elon is having a mental breakdown

b) Titan will die because of design by committee


If Elon avoided a mental breakdown in 2008, he certainly won't get one now.


Once a human has avoided having a cognitive overload, it's impossible for them to suffer another in the future.


Correct


Nothing is designed by committee at Apple. That isn’t how they work.


Which, ironically, seems to be one of the big issues now with many of their products. Division going into them seems to be a little too singular.


I know Steve talked alot about not having committees at Apple. I wonder if that is still the case today.


Apple entering the space would benefit consumers, but if Apple can't deliver a simple power mat (Airpower), it is hard to believe that they would be able to develop a car. Doug Field left Tesla probably because he couldn't scale the manufacturing plant for them. Apple doesn't build the hardware themselves but hires third-parties to do it, like Foxconn. It would be hard to imagine a company designing cars and letting third-parties build for them


Actually, it's more common than you think for a major brand to design a car and outsource the building to a third party or even to outsource the whole design and development of a model entirely.

For example, Magna Steyr builds the E-Pace for Jaguar, the Countryman for Mini and the G-Wagon for Daimler in Graz, Austria. It also developed several cars on behalf of manufacturers such as the Audi TT, Fiat Bravo and Peugeot RCZ[1].

There were even rumors in Graz that execs from Cupertino have flown here to discuss the possibility of Magna building a car for Apple.

[1]https://en.wikipedia.org/wiki/Magna_Steyr


Apple won't outsource its products design to someone else. That's not Apple


The comment you’re replying to doesn’t say anything about outsourcing design.


Apple is not a person or a single-thinking entity


“PC guys are not going to just figure this out. They're not going to just walk in.”


> It would be hard to imagine a company designing cars and letting third-parties build for them

TFA said they have (or speculatively have, don't remember?) a partnership with VW so it wouldn't be too far fetched for an Apple branded VW robocar in the works. Extra props for it being on the microbus platform[0].

[0]https://www.businessinsider.com/vw-microbus-launching-in-202...


I imagine there are multiple companies would be more than willing to build cars for Apple at the right price. Companies that really know what they’re doing.

I bet Honda, Toyota, or maybe forward would be happy to do it for the right price. As long as they don’t think Apple is too big of a competitor it seems like a win-win. And since we all know Apple is going to be focusing on the high-end/luxury segment it might be worth their while.


Performance... Style... Price...

Reliability.

Reliability is not just a part of performance. When it comes to cars, reliability is its own category and it's every bit as important as the others. How many cars are great performers but are rendered impractical by their lack of reliability? For many people, reliability trumps all other considerations. Personally, I'll pay extra and put up with a slower, clunkier vehicle if just works.

Apple no longer produces particularly reliable software or hardware. Tesla is having problems doing that themselves. The marriage of the two? It would take a lot to make me trust a vehicle made by these two companies in partnership.

If anything, Apple needs to acquire or partner with a proven auto company with a track-record of producing reliable designs. Quite frankly, Tesla would benefit from doing the same. Their vehicles are exciting in terms of their performance, but the reliability just isn't there yet.


> * Personally, I'll pay extra and put up with a slower, clunkier vehicle if just works.*

Toyota Camry is the car with the track record for reliability.


I don't understand what they mean when they say that "personalization" is the most important thing for customers when buying cars.


I never thought I'd miss station wagons. Even classic car collectors/restorers avoid them.


Apple has run out of steam. What do we have to look forward too; the iPhone 20?


A trillion dollar market cap can support the production of a hell of a lot of steam.

I can't stand Apple's products of the last ~7 years, but I wouldn't bet against them in nearly any regard. They have the resources to weather any storm.


I should have said innovation. At this point they are more like a utility company.


I’m not sure if you’re trolling. Have a scroll through this article and say that again;

https://www.bloomberg.com/features/apple-iphone-guts/

There’s certainly a dearth of groundbreaking category defining new products, but you have to be blind to what is actually going into the intervals of each successive iPhone model to claim there’s no innovation happening.

Personally I think the level of expertise, technology, and craftsmanship which has gone into the iPhone line is astounding. They have absolutely mastered the form factor to the point where you take it completely for granted.


Who could ignore such innovation as the removal of the headphone jack?


I’ve missed it on occasion, but once I added a Bluetooth adaptor [1] to my old QC15s I haven’t given it a second thought. And now my QC15s also pair to the Apple TV which is great for watching late night Netflix while the family is sleeping.

But my point isn’t at all that you have to agree with every outward design decision. My point is that the internals reveal an incredible amount of engineering prowess of their own right. The stacked circuit boards in the X, along with the FaceID suite of sensors, and I’m particularly fond of how well it all integrates with the secure element, for example.

Also have to mention the camera — the “portrait” mode pictures are so beautiful and easy — all my favorite photos were shot on iPhone while my EOS collects dust.

Edit: I should add — it was removing the Home button which actually is my favorite part of the X. I love swiping all around the phone and not having that clunky button to click, or worse, double click.

[1] - https://www.amazon.com/dp/B0786VF6PS/


AirPods are an amazing feat of technology. Incredibly tiny, easy to use, and they sound great. They almost never cut out for me (a problem many Bluetooth devices are supposed to have).

There was nothing close to them on the market when they came out. You either had to have terrible battery life, much larger headphones, or pay a TON more money.

I’m with you on the camera. If Apple made a camera I’d buy it in a heartbeat. The responsiveness and quality they can get out of that ridiculously tiny sensor is extremely impressive. Imagine what they could do with an APS-C or Micro 4/3s.

You already mentioned some of their other amazing tech like Face ID. The role they’ve been on with the A-series chips since they started taking the designs in house has also been pretty incredible.


If only they stayed in my ear!

I bought these [1] which lock them in perfectly but defeats their ease-of-use because you have to remove them to fit them back in the charger-case of course.

Some people have had luck with hole-punch sized waterproof tape [2] which I haven’t tried but has the advantage of not interfering with the case.

[1] - https://www.amazon.com/dp/B019BREFE4

[2] - https://lifehacker.com/keep-your-airpods-in-your-ears-with-t...


I despaired over which bluetooth earbuds to buy. I don't like either the Jaybird or Beats form factor. And especially not the Airpod/Earpod style.

I greatly prefer the Shure line (style) of earbuds. The shape works great for my ears. But I had grown weary of the tethered cable. (And the jack is going away.)

It took me way too long to figure out the MMCX connector allows me to mix & match. https://en.wikipedia.org/wiki/MMCX_connector

There's a few different styles and mfg of bluetooth audio cables. And of course a zillion earbuds.

Here's the low-end Shure SE215 http://a.co/d/39g7Mbr

Here's one of the cheapo ($20) cables I bought Luxray http://a.co/d/8ux9eg7

The Luxray is meh, okay. Fantastic for $20. But I'd like something more modern, full featured.

A generic MMCX & bluetooth & codec base cable would be a great kickstarter project. I'd happily pay $200 for something that was robust, (firmware) upgradeable.

I envision the same base electronics available in different form factors, eg Jaybird-style necklace, Bose-style neck horseshoe, lanyard-style dangly thing.

When comparing bluetooth cables, be mindful of the codecs supported. The cheapos I bought support AAC, allegedly best (preferred) for my Apple gear. I've read that aptX (and later) is best for Android.


That’s the unfortunate thing about the design. They are such fantastic headphones but for many people it doesn’t matter since they simply can’t wear them. Apple doesn’t have any other styles or adapters or anything so if you or someone they don’t fit… you’re just out of luck.

I understand it a little bit, how would you advertise to people how they’re supposed to figure out which ‘fit’ they should buy? It is easier just to make one that fits the majority of people (whether that’s 60% or 90% I don’t know) and just avoid the issue.


Do you also pine for your missing floppy drive?

I’ve used wired headphones maybe twice in the 18 months since I got my AirPods. In ten years almost no phones will have analog audio jacks and (almost) no one will care.


> Accordingly, some have concluded that Apple should acquire Tesla as a way of quickly jumping into the transportation industry.

I produce salty remarks. McDonald's produces salty food. Therefore McDonald's should buy me out as a way of quickly jumping into the HN snark industry.


To be fair, if McDonald's did want to move into the HN snark space, buying out existing contributors would be an effective way to go about doing it.


I will stand by for the screenshot of my smiling mug on Our Incredible Journey.


I have been given a job offer with a car company to work in their research division in which they plan to develop more electric vehicles to take on Tesla.

I am still on the fence but the job sounds interesting, its just that its a big corporate and I am skeptical they will be able to take on Tesla's monopoly on electric vehicles.


In January, Nissan passed the 300,000 unit mark for deliveries of the Leaf worldwide. Tesla reached 300,000 deliveries across all models a month later. No one has a monopoly on electric vehicles.


Ok I think I'll take the job then


You should go for it. Don't bother to think about Tesla, it's a small company that doesn't even have a presence outside the US. They just enjoy nice news because the David vs Goliath archetype sells in media.

Any major manufacturer can roll out an equivalent car globally anytime and get in front of a Tesla in a heartbeat. I bet your new company will give you anything you need to do just that.


Tesla doesn’t have a monopoly on electric vehicles. They have a near monopoly on press coverage for electric vehicles.


Here’s a tip - Tesla’s domination is only 80% due to the vehicle. The remaining 20% can be summed up as “minimize the pain in the neck that owning a car usually is” - the buying process, the maintenance, the warranty, the mobile app and the massive supercharger network.

And yet no manufacturer so far has been willing to even match the last 20%, let alone exceed it.


> they will be able to take on Tesla's monopoly on electric vehicles

How is that statement supported by sales data?


Tesla delivered a total of ~23 175 cars in August in the US. For comparison BMW delivered 23 789.

And that's only because the former is supply-constrained.




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