The Exchanges

Q And so what does that mean for the engineering teams who are deep in this? What is, what kind of scramble does this set off inside Tesla?

A It means that, so the, uh, the Roadster, remember, was the first car that Tesla produced in 2008, and he had been promising a reboot of the Roadster for years, and now He's going to do it. Now he says, okay, now I'm, I'm going to do it. It's going to come out in 20, 26. And this means that the body crew, the battery crew, the electric motor, the whole powertrain, everyone has to be aligned in terms of the, of the specs that he establishes for that vehicle. In this case, the roadster. Now, if you're going twice as fast, That means that within the battery, when, when you accelerate, that means that the, that the lithium ions, the lithium that's in the battery is traveling from the anode to the cathode twice as fast, right? That means when you push down the accelerator, what that means is that the, the lithium is moving from one electrode to the other. Now you're, you're, you're saying, well, we want those electrons to move twice as fast, and it's not, You can't just say that, right? The, the, you, you have to set up the electrochemistry so that can happen, uh, without the lithium really getting gummed up in the anode or in the cathode or, uh, or, or getting lost in the, uh, electrolyte, and when you move like that, you create heat. You can't have the battery over, over heat. Uh, lithium is a highly volatile A highly flammable metal, and you, you have to, one of the big challenges…

AI assessment note: “everyone has to be aligned in terms of the, of the specs that he establishes”

Q it's wild because of what it does to the teams inside Tesla. Uh, there's some design crossover between the Model Two and the RoboTaxi, which you write about in your recent story, but they're very different cars. Um, why is that such a radical move for the teams working on these cars to suddenly slow or even pause the Model Two work and then put it all into the RoboTaxi?

A One thing to know is that a lot of people who work at Tesla are there because they believe in sustainability. They believe in the mission that was, uh, that was set 14 years ago to electrify the world and to help resolve climate change. The 25,000 dollar Model Two, the one they were developing, was The key, the, the key, um, to doing that, to getting there, right? That was going to be the, the, you know, ten million cars a year by 20 30 of those vehicles were going to be, were going to be sold, and that, that was how they were going to get there. When you cancel the Model Two You're messing with those people. That's the reason why they're at the company. But let's say that you're in it, you know, that you say, okay, well, you know, okay, Elon wants to do it this way, so let's do it that way. So you've been, you've been spending all of your time engineering that model to getting the battery, getting the powertrain, getting the vehicle ready for mass production next year. And That's no small thing, right? Because you're, you're, you're taking cars, right? The Model Three, the Model Y, these cost in the mid-thirties and into the forties when, you know, when you're adding other features to them, and suddenly you're saying, uh, you know, we want, we want a car that's 40 or 50% less, so you have to do all kinds of things, especially to the battery, to get there. All of that work is p…

AI assessment note: “All of that work is put on the scrap. On the scrap heap.”

Q confusion in the electric vehicle market. In mid-April, Musk announces major layoffs across the company because of lagging sales. A senior leader wrote An email to the supercharger team at that time saying must believe their work was critical, which you reported on. And then two weeks later, that supercharger team was gone. Uh, leadership was scrapped. The whole team was fired. Why was that such a head scratching move?

A The, this is the supercharger team, especially those are the crown jewels of Tesla. People are not going to buy an electric car ordinary. I mean, I mean, mainstream you and me, right? We're not going to buy one unless we think we can charge it up when we want and fast. Musk from the beginning understood that and built ahead of demand, this global Supercharger network across the United States and across the world, these places that, that not only charge fast, not only were, were convenient, but were pleasant to go to, right? You know, you wanted to go charge, I have friends, right, who go charge their car and sit in the back seat and, and, and play video games. This is fun, right? And, uh, and now, Musk is saying, well, actually, we're not going to build them at the rate we were, and I'm firing the entire team in charge, 500 people, and the person in charge of that team. I'm firing all of them. It, it, it's not just head-scratching, it's mystifying. You get rid of the, uh, team responsible for your most valuable asset, and You put all the bets of your company, you bet the company on a technology that isn't, isn't anywhere near ready for the market. All of these things together, they're not rational. They are not rational.

AI assessment note: “You get rid of the, uh, team responsible for your most valuable asset”

Q car teams into turmoil and radically changing the course of the company. If there's any starting point for the current Tesla turmoil, it might be February 28th when Elon posted, tonight we radically increased the design goals for the new Tesla Roadster, and he said the car would hit zero to 60 in less than a second. When he said we, he really meant I, didn't he? What, what happened?

A He decided, so that, that week, it's the week of February 26th. He, ever since he bought Twitter, has kind of stepped away from his other companies, including Tesla. But every now and then, he would step back into Tesla, into his other companies, and this was one of those weeks. And among the things he did, among the meetings that he had that week, was with his Roadster crew, his Roadster team. And he decided to Himself, uh, without, without telling anyone else that, uh, that it's gonna go twice as fast as I said before, so instead of going from zero to 60 in 1.9 seconds, which is very fast, like, think in your mind how long Okay, that was about two seconds, like that pause that I just did, right? That's going from zero to 60. He decided we're gonna go, we're gonna get there twice as fast. And so, um, he, he, he tweets that. He said, tonight we decided, so he sent this late at night, but the, his crew, the people actually working who would carry this out, learned of this on Twitter.

AI assessment note: “He decided to Himself, uh, without, without telling anyone else”

Q kind of different, and I wonder if you can give us the market backdrop about why this moment is different for Tesla. You've got a slip in sales, we've got pressure from EV, Makers in China. Factory delays. Like, what is happening in the EV market generally that is putting more pressure on Tesla and perhaps forcing Elon's hand to make some of these, ah, moves that are baffling folks?

A This can be, this question can be divided into two. One is, why is this, why is this, so he's faced other challenges. There have been other crises in, um, Tesla history, and there have been moments where he fired 10, 15% of the company, twenty-nineteen, twenty-twenty-two, uh, the, the most recent ones. There have been numerous times, Musk himself has narrated when he thought the company was gonna go Bankrupt. But all of those times, right, there's the Model S, there's the Model Three, there's production hell, there's the Model Y, uh, I'm running out of money, calling all his friends, you know, before the midnight, the midnight deadlines, uh, you know, to try to get them to, to, to pour money into, into the company. But though, but those are different because each one of those was him advancing the development of electric cars, uh, Right. Ok, I have this model that cost, you know, 125,000. Now I'm going down to 80,000 and then 50 and so on. Right. You could see the progression. There's something rational there. Even if you didn't believe that it would work, it made sense. This one makes a lot less, a lot less sense. The second part of this, what, what are the things that are happening? One is that the mainstream market outside China has not Bought into electric cars. They, so the, the, the non-Chinese market almost around the world, not everywhere. There, there, there's some cou…

AI assessment note: “One is that the mainstream market outside China has not Bought into electric cars.”

Q And a lot of companies have gone bankrupt or downsized. Apple just gave up on its autonomous car effort. After a decade of development, you had some of the brightest AI engineers and automotive folks working on that program. Tesla itself is under federal investigation for securities and wire fraud for, uh, for Claims around its own self-driving system. Why is Musk running so hard into autonomy? What's your read?

A You know, we, we, we can reference, in terms of getting into his mind, the best thing is Walter Eisenstein's book, because he sat with Musk for two years, fly on the wall, and that's priceless. Musk, beyond what he, what, what he said originally, 14 years ago, what he said on battery day, what he said last year, uh, and in the shareholders meeting, and in all of those places, he was very enthusiastic about the Model Two, and, you know, it's gonna blow, blow your mind, you've never seen a car like this, you know, uh, you know, and so on, you know, the way he can talk. He blew hot and cold on. In fact, Internally, he blew hot and cold. He was not excited about this car. He, he told Walter, this isn't the most exciting thing in, you know, that, that, that we're doing. I think there's some of that. Number two, there's a question in my mind about whether he thought that, uh, this was really going to be, uh, a, uh, Tesla, right? So in his mind, what is a Tesla? And, and he's looking at The Model Two mock-up that, that his design crew had, um, had put together. And, you know, in his mind, was it a Tesla? And, and, and three, and if it was a Tesla, would it hit the margins, the profit margin? Could it really be made at 25,000 dollars with a healthy profit margin? And this is something that, that changed in him over the years. He didn't really talk about, I mean, he, he did in his, in h…

AI assessment note: “in terms of getting into his mind, the best thing is Walter Eisenstein's book”