Elon Musk: Humans Must Colonize Mars To Survive WW3 But AI Is More Dangerous Than Nukes

Elon Musk, the founder of Space X, says humanity must colonize Mars so that our survival is insured after the onslaught of a third world war. Amid rising nuclear tension, humans must make the colonization of Mars a priority, says Musk.

According to The Guardian, Musk believes getting to the Red Planet should be at the top of humanity’s to do list. “If there’s a third world war we want to make sure there’s enough of a seed of human civilization somewhere else to bring it back and shorten the length of the dark ages,” Musk said, responding to questions from his friend Jonah Nolan, co-creator of TV show Westworld. “It’s important to get a self-sustaining base on Mars because it’s far enough away from Earth that [in the event of a war] it’s more likely to survive than a moon base,” Musk said on stage at SXSW, just days after Donald Trump announced plans to meet the North Korean dictator, Kim Jong-un, in an attempt to defuse rising nuclear tension.

Space X is currently working on a vehicle that will take humans to Mars in a 100-meter ship codenamed the BFR (Big F**king Rocket). But building a colony would require “tremendous entrepreneurial resources”, Musk said.  He also suggested that Mars may be an “escape hatch for rich people.”He said, “It will be like Shackleton’s ad for Antarctic explorers: ‘Difficult, dangerous, a good chance you’ll die, excitement for those who survive.’ That kind of thing.”

He also said those risks may outweigh the rewards. “There’s not many people who will want to go in the beginning,” he said, adding that over time the Red Planet colony would be hospitable and have “great bars. The Mars Bar! I love dad jokes, I’m a dad!”

The BFR will fly for the first time in the first half of 2019, Musk said, acknowledging that his “timelines historically have been optimistic”.  Musk said he initially gave SpaceX and Tesla an estimated likelihood of success of just 10 %. “I wouldn’t let my friends invest because I didn’t want them to lose their money,” he said of SpaceX. Instead, he funneled his own money, from the sale of PayPal, into the businesses. “SpaceX is alive by the skin of its teeth. So is Tesla. If things had gone a little bit the other way, both companies would be dead.”

But Musk also had a warning for humanity. “Mark my words,” he said, “AI is much more dangerous than nukes.”

A.I. Is Taking Over Bit By Bit: The Implication Of Rapidly Improving Artificial Intelligence

Recognizing the human voice, new tech gadgets can play music, search the web, shop online, check the weather, and even switch on the lights or control the central heating. But while we get to know these new interactive electronics, a report last week sounded the alarm over the implications of rapidly improving artificial intelligence.

They listen, they talk and very soon, according to some experts, they will be taking over our homes, our jobs and our lives. Thousands of Americans unwrapped voice-activated electronic devices on Christmas Day. Amazon’s Alexa service, Apple’s Home Pod, and Google’s Home speakers were among the best-sellers.

The study, from the Institute for Public Policy Research (IPPR) warns of thousands of jobs being lost to robots and those with those on lowest wages likely to be hardest hit. As it becomes more expensive to hire people for work because of government intervention like minimum wage hikes and overbearing regulations, more companies are shifting to robotics to save money on labor.

Of course, this all leads to humans needing to compete with artificial intelligence and robots for jobs. Joe Joseph of The Daily Sheeple says that “nothing could go wrong” sarcastically. “That means bracing perhaps the research of Neuralink, Elon Musk’s company, and ‘neural lace‘,” says Joseph. “Because nothing could possibly go wrong by creating a nano-particulate web that actually goes on your brain...over your brain…and provides a machine-brain interface.”

“I would imagine that there’d be some sort of transmission system associated with that,” Joseph continued. “And nothing like putting a transmission system, albeit tiny, directly on your brain. ‘Cuz we don’t get cancer enough in this country.” Of course, there are a few ways humanity can benefit from A.I., especially when used the right way.

“How cool would it be to just be able to walk down the street and communicate with anybody, because, you know, instantly at your fingertips you have the translation to every language out there,” says Joseph. The technology is there for that, however, and it could so many people some good. “This is coming like a freight train at full speed,” Joseph continued. The good and the bad are both coming whether we like it or not.

Uninvestable Tesla

Tesla is an uninvestable stock for me, not just because of its high valuation but also because it fails our fairly basic quality test, which I shamelessly borrowed from Warren Buffett: Would I still buy this stock if right after the purchase the stock market were to close for ten years? If you are a big Tesla car and stock fan, before you start throwing rocks at me, pause and wait till you finish this article – the rocks and I will still be there.

Think about the next ten years. But before you start mentally drawing upward-sloping lines from the current environment into the next decade and drooling over the rosy vision of Tesla’s future that Elon Musk has painted – produce half a million model 3s and bunches of semis and roadsters, and then send a roadster to Mars (I kid you not; that is in his 2018 plan – I’d like you to think about another version of the next ten years: higher (maybe much higher) interest rates, a recession in the US and around the globe, and a less promiscuous bond market where Tesla would have pay a substantial premium to US Treasuries (as would any other company that loses over a billion dollars a year in a highly cyclical industry). And now answer this question: Would Tesla survive this change in economic weather if it happened next year or even three years out? And the answer is … a weak “maybe” at best, and “unlikely” at worst.

The counterargument I’d get: Yes, but we are not going into a recession. Actually, we are. I (and nobody else, for that matter) just don’t know when. After nine years of appreciating stock markets and tepid economic growth, we tend to forget that recessions are a regular  economic fact of life, usually arriving every four to five years (so we are overdue for one). Most Millennials have yet to experience adulthood (have a job and a family) through a recession. They have also never had to borrow at high interest rates – but that is liable to happen, too.

Recessions are usually caused by expansions. Recessions are like the hangover that comes after the wild college party (economic expansion). It’s hard to have a good, fun college party with lots of booze and then not experience a hangover. (I am not speaking from recent personal experience but rather am trying to communicate in language to which Millennials can relate). During the expansion party, companies may build up too much inventory or erect too many factories, and consumers may overconsume.

If you own high-quality companies, ones that meet Buffett’s “ten-year stock market closed rule” (as we do), you don’t have to spend a lot of time and energy thinking about when the recession will hit (we don’t). However, if you own Tesla you’d better have a very clear, shiny crystal ball that will reveal lots of detail about the direction of interest rates and the global economy.

Recessions are tough for deeply cyclical companies: The bulk of their costs are fixed, and thus lower sales usually result in significant declines in net income and often lead to losses. This is why car companies and their deeply cyclical brethren don’t trade at high price-to-earnings levels when the economy is doing well. That is when their earnings are high. The market doesn’t usually take these high earnings at face value, knowing full well that there are lower earnings (or losses) around the corner when recession comes. Tesla, however, doesn’t have to worry about this low price-to-earnings problem, because in spite of its $50 billion market valuation, it has no earnings, just losses. It trades at whatever price-to-future Elon Musk tells you it does.

If you own Tesla stock and you only see one rosy (Musk) version of the future, you are ignoring the very real risk that the benign economic environment of today will not persist indefinitely into the future . Good luck – you’ll need plenty.

One additional but very important point. In the past I was dismissive of traditional automakers’ ability to compete with Tesla. I felt their hundred-year past of producing internal combustion engine (ICE) cars was going to hold them back, the same way Nokia’s dumb-phone past prevented it from effectively competing against Apple’s iPhone. Nokia tried to take the dumb-phone operating system Symbian and turn it into a smartphone operating system. It had a lot of engineers who knew the Symbian operating system, and thus it seemed a logical path at the time. The right approach would have been the more difficult one: Hire new engineers and create a brand new operating system. There was absolutely no reason why Nokia could not have developed its own Android-like OS, even if doing so would have required either retraining or, more likely, laying off Symbian engineers.

For a while it looked like I was right about cars, as the Big Three took a hybrid (Symbian-like) approach to electric cars – they were having a hard time saying goodbye to ICE. However, as we look at the future lines of electric cars coming from  US and German automakers, we now see them severing the connection to their ICE past and embracing electric.

Disclosure: I am an unsecured lender to Tesla through my $1,000 deposit on a Model 3. 

So, how does one invest in this overvalued stock market? Our strategy is spelled out in this fairly lengthy article.

Vitaliy Katsenelson is chief investment officer at  Investment Management Associates  in Denver, Colo. He is the author of “Active Value Investing” (Wiley) and “The Little Book of Sideways Markets” (Wiley). Read more on Katsenelson’s  Contrarian Edge  blog.

Elon Musk"s First Payload To Mars: His "Midnight Cherry Tesla Roadster Playing Space Oddity"

In late November, we reported on Elon Musk’s desperate attempt to boost market confidence with a shock and awe performance unveiling Tesla’s new semi-truck and roadster. While the event was a thriller, it appears the laws of physics may have finally caught up with Tesla’s stock - now in a bear-market from September highs.

Musk is undeniably the greatest snake oil salesman modern financial markets have ever seen, and that is why he is planning the next spectacular event before a further correction.

On Friday evening, Musk tweeted what the payload of the Falcon Heavy would be— his “midnight cherry Tesla Roadster playing Space Oddity”.

But the story gets better, because the powerful Falcon Heavy rocket will launch his Tesla into the orbit around Mars. Musk added, the Tesla “will be in deep space for a billion years or so if it doesn’t blow up on ascent.”

Payload will be my midnight cherry Tesla Roadster playing Space Oddity. Destination is Mars orbit. Will be in deep space for a billion years or so if it doesn’t blow up on ascent.

— Elon Musk (@elonmusk) December 2, 2017

As Musk would say, the show must go on with the Falcon Heavy launch expected “next month” (January 2018) from Pad 39A at Kennedy Space Center in Florida. According to ARS Techinca, “a static fire test of the rocket’s three cores, and 27 engines, on the launch pad this month.”

Falcon Heavy to launch next month from Apollo 11 pad at the Cape. Will have double thrust of next largest rocket. Guaranteed to be exciting, one way or another.

— Elon Musk (@elonmusk) December 2, 2017

In simplest terms, the Falcon Heavy is three of the company’s Falcon 9 rockets strapped together. It will then create enough lift as proposed by Musk to propel his Tesla out of low Earth orbit onto a trajectory to Mars. When it comes to timing— don’t take the company seriously. Musk has pushed back Falcon Heavy’s maiden flight more than once: it was originally planned for a summer launch but moved to November and now to January 2018.

Musk said, at a press conference in July, that the Falcon Heavy might not even make it to orbit on its first attempt to leave the atmosphere. That means the upcoming event could turn into a very expensive firework showing.

While the practical use for a Tesla roadster on Mars is still unknown, it would buy Musk some time to keep the stock elevated for perhaps a few more secondly offerings. If Musk is successful in this latest endeavor, it would signal that NASA’s ambitions to Mars could be fulfilled by a Falcon Heavy. So far, no private company has launched a rocket beyond low-Earth orbit, nevertheless to another plant.

Phil Larson, an assistant dean at the University of Colorado, and a former SpaceX official said, “the launch of the biggest rocket since the U.S. Moon booster is a game changer for our country’s space exploration future and for national security. The fact that development of such a capability is coming from U.S. industry is a very positive sign for our economic competitiveness.”

As we have highlighted before, the short thesis for Tesla (see: Jim Chanos Adds To Tesla Short, Sees Musk Stepping Down) explains the financial circumstances of why Musk is attempting to conduct the great show ever known to man through SpaceX, as it means the cross promotion would keep his scheme alive. In the mean time, the short theses build:

1. Negative Cash Flows

“If you can’t make money selling a $100,000 car to rich people, how are you going to make money selling a $45,000 car to normal people?” Rocker told The Times. He was referring to the upcoming mass-market Model 3. “I’m saying they’re going to lose money on every Model 3 they build and sell,” Spiegel said. Based on Tesla’s Q4 2016 earnings report, he figured the combined average selling price for non-leased Model S and X is about $104,000 and the combined average cost of building them about $82,000.

 

2. Competition from the Big Guys

Electric vehicles are still only a tiny fraction of total new vehicle sales in the US. Tesla sold about half of them. In March, according to Autodata, Tesla sold 4,050 vehicles in the US, similar to Porsche. All automakers combined sold 1.56 million new vehicles. This gave Tesla a market share of 0.26%. “Tesla faces a formidable set of competitors, and they’re coming in with guns blazing,” Wahlman told The Times. “Once the market is flooded with electric vehicles from manufacturers who can cross-subsidize them with profits from their conventional cars, somewhere around 2020 or 2021, Tesla will be driven into bankruptcy,” Spiegel said.

 

3. Tesla’s vanishing tax credits

The federal tax credit of $7,500 that EV buyers currently get is limited to 200,000 vehicles for each automaker. Once that automaker hits that point, tax credits are reduced and then phased out. Of all automakers, Tesla is closest to the 200,000 mark. Under its current production goals, the tax credits for its cars could start declining in 2018. This would give competitors, whose customers still get the full tax credit, a major advantage. About 370,000 folks put down a refundable $1,000 deposit on Tesla’s Model 3, perhaps figuring they’d get the $7,500 tax credit. But as it stands, many won’t. Rocker thinks that this is going to be an issue. The refundable deposit “commits them to nothing,” he said. Those that don’t get the tax credit may just ask for their money back and buy an EV that is still eligible for the credit.

 

4. The Question of patent protection

Tesla has made its patents available to all comers, thus lowering its patent protections against competitors. Also, the key part of an EV, the battery, is produced by suppliers; they, and not Tesla, own the intellectual property. This is true for all automakers. But Tesla might still be closely guarding crucial trade secrets that are not patented.

 

5. Musk’s distractions from his day job

Musk has a lot of irons in the fire: Tesla, SpaceX (with which he wants to build a colony on Mars or something), solar-panel installer SolarCity which Tesla bailed out last year; projects ranging from artificial intelligence to tunnel digging; venture capital activities…. “He’s all over the map, from tunneling to flights to Mars to solar roof tiles,” Rocker said. These announcements have the effect of boosting Tesla’s stock: “It’s ‘Let’s get the acolytes excited. Implant in the brain! Let’s buy Tesla stock!’”

 

6. Execution risk

“Investing is all about possibility and probability,” Yusko said. “Is it possible that Tesla will produce 500,000 cars in the next two or three years? Yes. Is it probable? No.” Tesla has missed many deadlines and goals, and quality problems cropped up in early production models. As Tesla is trying to make the transition to a mass-market automaker, execution risk will grow since mass-market customers are less forgiving.

 

7. Investor fatigue

Having lost money in every one of its 10 years of existence, Tesla asks investors regularly for more money to fill the new holes. In March, it got $1.2 billion. In May last year, it got $1.5 billion. Tesla will need many more billions to scale up production and to digest the losses. Tesla has been ingenious in this department. But when will investors get tired of it? “We’re awfully close to the point where people wake up and realize these guys are seriously diluting our equity” with new stock and convertible bond issues, Yusko said. According to The Times, Yusko “is looking for the moment when the true believers begin to lose faith.”

 

*Update

8. Emerging solid-state battery technology

Musk has invested a lot into his Gigafactory and technology producing lithium-ion batteries. The EV game is all about the best battery technology and a new threat has emerged using solid-state technology. If Tesla does not adopt to these new battery trends consumers would likely gravitate to EVs who posses such technology, because of the longer distance and shorter charge time.

 

The Flat Earth Society Responded To A Tweet By Elon Musk: ‘Thanks For The Question’

The Tesla and SpaceX chief, Elon Musk, has a rather complex understanding of the universe, and Earth’s shape. He even made a tweet directed at those who believe the Earth is flat, and the response from the Flat Earth society will leave you dumbfounded.

Elon Musk would have to have a working knowledge of Earth’s shape in order for his math to work and his company to propel a spacecraft to Mars, which is a goal of SpaceX’s. With all the news swirling around flat Earth conspiracy theories recently, Musk got a little philosophical on Twitter.

While pondering the exotic spectacle of the Martian sunset, the CEO asked the question: given there’s such a thing as the Flat Earth Society, why doesn’t the Red Planet have its own equivalent? “Why is there no Flat Mars Society!?” he tweeted, probably just to amuse himself and his followers, and likely never expecting to find a serious response.

Why is there no Flat Mars Society!?

— Elon Musk (@elonmusk) November 28, 2017

But he got one, and Darwin himself is rolling over in his grave at the undeniably de-evolved response from the operator of The Flat Earth Society’s twitter account.

Hi Elon, thanks for the question. Unlike the Earth, Mars has been observed to be round.

We hope you have a fantastic day!

— Flat Earth Society (@FlatEarthOrg) November 28, 2017

That’s funny.  There have been astronauts who have observed Earth from the International Space Station, all of whom say the Earth is a globe.

Umm…right. So about this selfie I took while orbiting the Earth. pic.twitter.com/9bAAozVqOo

— Garrett Reisman (@astro_g_dogg) November 30, 2017

Of course, that didn’t convince those who actually believe that the laws of physics created the moon, the Sun, and Mars as globes, and made Earth flat.  But the Mars Reconnaissance Orbiter took an image of the moon and the Earth, and both are indeed globes. 

Read more about Mars missions here.

 

This is the kind of conspiracy thinking that leads flat-Earthers to set up ambitious crowdfunding campaigns to ostensibly conduct their own “real” scientific experiments. For example, when rapper and evident flat-Earther B.o.B ran a GoFundMe campaign to launch “one, if not multiple” satellites into space. Astronauts had a lot of fun at B.o.B’s expense, and now, given the publicity around flat-earther Mike Hughes’s rocket launch, (which the government shut down) scientists are again appealing for a bit of common sense here.

While others tend to just laugh at those who actually believe the earth is flat.  Personally, we are all up for a good conspiracy theory, but please make sure you’ve at least got a shred of evidence to back up your theory, or you’ll just end up looking crazy.

"Sweet Dreams" - Elon Musk"s Periodic Reminder Of The Coming AI Apocalypse

Elon Musk just gave people a powerful and eerie visual related to his belief that Artificial Intelligence (AI) could usher in a SkyNet style apocalypse where the machines take over and kill us all. In a talk given last July, Musk said, “I keep sounding the alarm bell but until people see robots going down the street killing people, they don’t know how to react because it seems so ethereal."

On Sunday Musk took to twitter to vividly illustrate his point, retweeting a creepy viral video which showcases the DARPA-funded Boston Dynamics "Atlas" military robot"s astounding ability to do a back flip - something which researchers have called "bonkers" for the shocking and unexpected compounding leaps in development of humanoid robot technology that Atlas represents. 

Musk commented on the original "we dead" tweet with the ominous warning: "This is nothing. In a few years, that bot will move so fast you"ll need a strobe light to see it. Sweet dreams..." 

And he followed with another tweet accompanied by the 90"s hip-hop song "Regulate" emphasizing his oft-repeated message that AI is a "public risk" that must be regulated: "Got to regulate AI/robotics like we do food, drugs, aircraft & cars. Public risks require public oversight. Getting rid of the FAA wouldn’t make flying safer. They’re there for good reason."

This is nothing. In a few years, that bot will move so fast you’ll need a strobe light to see it. Sweet dreams… https://t.co/0MYNixQXMw

— Elon Musk (@elonmusk) November 26, 2017

we dead pic.twitter.com/lUys7DptdZ

— alex medina (@mrmedina) November 16, 2017

Got to regulate AI/robotics like we do food, drugs, aircraft & cars. Public risks require public oversight. Getting rid of the FAA wdn’t make flying safer. They’re there for good reason.https://t.co/6OXZC3UdMW

— Elon Musk (@elonmusk) November 26, 2017

In a recent Rolling Stone interview Musk told Neuralink staff after showing them a documentary on AI, “Maybe there"s a five to 10 percent chance of success [of making AI safe].” He"s long emphasized that governments need to "proactively" regulate and monitor advances in artificial intelligence before it"s too late, as the technology poses "a fundamental existential risk for human civilization."

Rolling Stone"s summation of Musk"s words to the Neuralink crew points out that, "the problem with building something that"s smarter than you is ... that it"s smarter than you. Add to that the fact that AI has no remorse, no morality, no emotions – and humanity may be in deep shit. This is the good son"s second chance against the remorseless father he couldn"t change."

He further admitted to the group that he invested in DeepMind - the British AI research company acquired by Google in 2014 - with the aim of keeping an eye on Google’s development of AI. "There"s a lot of risk in concentration of power. So if AGI [artificial general intelligence] represents an extreme level of power, should that be controlled by a few people at Google with no oversight?" Musk told Rolling Stone. 

And Musk"s instincts appear to be correct, as DeepMind itself proudly defines its purpose on its website as follows: "We’re on a scientific mission to push the boundaries of AI." Such personal monitoring of the industry is what Musk referenced in a previous talk in July when he said, "I have exposure to the most cutting-edge AI and I think people should be really concerned about it." 

Meanwhile, it appears that Musk"s "sweet dreams" tweet regarding DARPA/Boston Dynamics" back flipping humanoid military robot hints at the future possibility that such a mind-numbingly advanced and capable machine is a prime example of just the type of robot, when equipped with AI, that will do us all in. As one researcher, commenting on the significance of the pre-back flip/post-back flip threshold, characterizes:

But I think we"re in a new robotic age now. There was a time before Atlas could do backflips, back when robots were for factories, bomb disposal, vacuuming, and the occasional gimmick, and none of the useful ones were humanoids. Now we"re living in an era where humanoid robots are apparently as agile as we are. So what will they be used for? It’s time to get out the popcorn.

Or ask Musk might point out, it will be too late to get out the popcorn as it will already be "lights out/sweet dreams" on the end of humanity from the moment such a super bot comes online and goes conscious.

There is just one thing preventing Elon Musk’s vision from coming true: The laws of physics

When Elon Musk stepped on stage at Tesla’s product-launch event earlier this month, he knew the market’s confidence in Tesla’s brand had sunk to an all-time low since he took over the company a decade ago. So, he resorted to a tactic that should be familiar to anybody who has been following the company: Shock and awe.

While the event was ostensibly scheduled to introduce Tesla’s new semi-truck – a model that won’t make it’s market debut for another two years, assuming Tesla sticks to its product-rollout deadline – Musk had a surprise in store: A new model of the Tesla Roadster that, he bragged, would be the fastest production car ever sold.

Musk made similarly lofty claims about the battery life and performance of both vehicles. The Tesla semi-trucks, he said, would be able to travel for 500 miles on a single charge. The roadster could clock a staggering 620 – more than double the closest challenger.

There was just one problem, as Tesla fans would later find out, courtesy of Bloomberg: None of it was true.

In fact, many of the promises defy the capabilities of modern battery technology.

Elon Musk knows how to make promises. Even by his own standards, the promises made last week while introducing two new Tesla vehicles—the heavy-duty Semi Truck and the speedy Roadster—are monuments of envelope pushing.

To deliver, according to close observers of battery technology, Tesla would have to far exceed what is currently thought possible.

Take the Tesla Semi: Musk vowed it would haul an unprecedented 80,000 pounds for 500 miles on a single charge, then recharge 400 miles of range in 30 minutes. That would require, based on Bloomberg estimates, a charging system that’s 10 times more powerful than one of the fastest battery-charging networks on the road today—Tesla’s own Superchargers.

The diminutive Tesla Roadster is promised to be the quickest production car ever built. But that achievement would mean squeezing into its tiny frame a battery twice as powerful as the largest battery currently available in an electric car.

These claims are so far beyond current industry standards for electric vehicles that they would require either advances in battery technology or a new understanding of how batteries are put to use, said Sam Jaffe, battery analyst for Cairn Energy Research in Boulder, Colorado. In some cases, experts suspect Tesla might be banking on technological improvements between now and the time when new vehicles are actually ready for delivery.

“I don’t think they’re lying,” Jaffe said. “I just think they left something out of the public reveal that would have explained how these numbers work.”

While Jaffe seems inclined to give Tesla the benefit of the doubt, there’s little, if anything, in Musk’s recent behavior to justify this level of credulity. In recent months, Musk has repeatedly suffered the humiliation of seeing his lies and half-truths exposed. For example, the self-styled “visionary” claimed during the unveiling of the Model 3 Sedan that he would have 1,500 copies of the new model ready for customers by the end of the third quarter. Instead, the company managed a meager 260 models as factory-line workers at its Fremont, Calif. factory struggled to assemble the vehicles by hand as the Model 3 assembly line hadn’t been completed.

Increasingly agitated customers who placed deposits with Tesla back in March 2016 have begun asking for refunds, only to be chagrined by the company’s sluggish response. While nobody in the mainstream press has (somewhat bafflingly) made the connection, Tesla revealed earlier this month that it burned an unprecedented $1.4 billion of cash during the third quarter – or roughly $16 million per day – despite Elon Musk’s assurance that Tesla had its “all-time best quarter” for Model S and X deliveries.

And let’s not forget the fiasco surrounding Tesla’s autopilot software. Musk has repeatedly exaggerated its performance claims. And customers who paid more than $8,000 for a software upgrade more than a year ago have been repeatedly disappointed by delays and sub-par performance.

Musk’s exaggerations about the Tesla Roadster were particularly egregious.

Tesla claims that its new $200,000 Roadster is the quickest production car ever made, clocking zero to 60 in 1.9 seconds. Even crazier is the car’s unprecedented battery range: some 620 miles on a single charge. That’s a longer range than any battery-powered vehicle on the road—almost twice as long as Tesla’s class-leading Model S and Model X.

To achieve such power and range, Musk said the tiny Roadster will need to pack a massive 200-kilowatt-hour battery. That’s twice the size of any battery Tesla currently has on the road. Musk has previously said he won’t be making the packs bigger on the Model S and Model X because of space constraints. So how can he double the pack size in the smaller Roadster.

BNEF’s Morsy has a twofold answer. First, he expects Tesla will probably double-stack battery packs, one on top of the other, beneath the Roadster’s floor. That creates some engineering problems for the battery-management system, but those should not be insurmountable. Still, Morsy said, the batteries required would be too large to fit in such a small frame.

“I really don’t think the car you saw last week had the full 200 kilowatt hours in it,” Morsy said. “I don’t think it’s physically possible to do that right now.”

Is it possible that, thanks to incremental improvements in battery density and cost, Musk somehow manages to hit these lofty targets? Perhaps, though, as Bloomberg points out, the fact that Musk is basing these claims on a set of projections that haven’t yet been realized is hardly confidence inspiring.

To be sure, there’s an important caveat to Musk’s claims. While they may be staggeringly exaggerated, there’s still the possibility that incremental improvements in battery technology will make these targets more feasible by the time the models hit the market.

Again, Musk may be banking on the future. While Tesla began taking deposits on the Roadster immediately—$50,000 for the base model—the first vehicles won’t be delivered until 2020. Meanwhile, battery density has been improving at a rate of 7.5 percent a year, meaning that by the time production starts, packs will be smaller and more powerful, even without a major breakthrough in battery chemistry.

“The trend in battery density is, I think, central to any claim Tesla made about both the Roadster and the Semi,” Morsy said. “That’s totally fair. The assumptions on a pack in 2020 shouldn’t be the same ones you use today.”

However, in its analysis of the feasibility of Musk’s claims, Bloomberg overlooked one crucial detail: Back in August, the company’s veteran director of battery technology, Kurt Kelty, unexpectedly resigned to “explore new opportunities,” abruptly ending a tenure with the company that stretched for more than a decade, and comes at a critical time for Elon Musk.

Kelty’s resignation – part of an exodus of high-level executives that is alarming in and of itself – hardly inspires confidence in Tesla’s ability to innovate. We’ve noticed a trend with Tesla: The more the company underdelivers, the more Musk overpromises.

In our opinion, this is not a sustainable business strategy.  

Via Zero Hedge

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Featured Image: Elon Musk (OnInnovation/Flickr)

The post There is just one thing preventing Elon Musk’s vision from coming true: The laws of physics appeared first on Intellihub.

There Is Just One Thing Preventing Elon Musk"s Vision From Coming True: The Laws Of Physics

When Elon Musk stepped on stage at Tesla’s product-launch event earlier this month, he knew the market’s confidence in Tesla’s brand had sunk to an all-time low since he took over the company a decade ago. So, he resorted to a tactic that should be familiar to anybody who has been following the company: Shock and awe.

While the event was ostensibly scheduled to introduce Tesla’s new semi-truck – a model that won’t make it’s market debut for another two years, assuming Tesla sticks to its product-rollout deadline – Musk had a surprise in store: A new model of the Tesla Roadster that, he bragged, would be the fastest production car ever sold.

Musk made similarly lofty claims about the battery life and performance of both vehicles. The Tesla semi-trucks, he said, would be able to travel for 500 miles on a single charge. The roadster could clock a staggering 620 – more than double the closest challenger.

There was just one problem, as Tesla fans would later find out, courtesy of Bloomberg: None of it was true.

In fact, many of the promises defy the capabilities of modern battery technology.

Elon Musk knows how to make promises. Even by his own standards, the promises made last week while introducing two new Tesla vehicles—the heavy-duty Semi Truck and the speedy Roadster—are monuments of envelope pushing.

 

To deliver, according to close observers of battery technology, Tesla would have to far exceed what is currently thought possible.

 

Take the Tesla Semi: Musk vowed it would haul an unprecedented 80,000 pounds for 500 miles on a single charge, then recharge 400 miles of range in 30 minutes. That would require, based on Bloomberg estimates, a charging system that"s 10 times more powerful than one of the fastest battery-charging networks on the road today—Tesla’s own Superchargers.

 

The diminutive Tesla Roadster is promised to be the quickest production car ever built. But that achievement would mean squeezing into its tiny frame a battery twice as powerful as the largest battery currently available in an electric car.

 

These claims are so far beyond current industry standards for electric vehicles that they would require either advances in battery technology or a new understanding of how batteries are put to use, said Sam Jaffe, battery analyst for Cairn Energy Research in Boulder, Colorado. In some cases, experts suspect Tesla might be banking on technological improvements between now and the time when new vehicles are actually ready for delivery.

 

“I don"t think they"re lying,” Jaffe said. “I just think they left something out of the public reveal that would have explained how these numbers work."

While Jaffe seems inclined to give Tesla the benefit of the doubt, there’s little, if anything, in Musk’s recent behavior to justify this level of credulity. In recent months, Musk has repeatedly suffered the humiliation of seeing his lies and half-truths exposed. For example, the self-styled “visionary” claimed during the unveiling of the Model 3 Sedan that he would have 1,500 copies of the new model ready for customers by the end of the third quarter. Instead, the company managed a meager 260 models as factory-line workers at its Fremont, Calif. factory struggled to assemble the vehicles by hand as the Model 3 assembly line hadn’t been completed.

Increasingly agitated customers who placed deposits with Tesla back in March 2016 have begun asking for refunds, only to be chagrined by the company’s sluggish response. While nobody in the mainstream press has (somewhat bafflingly) made the connection, Tesla revealed earlier this month that it burned an unprecedented $1.4 billion of cash during the third quarter - or roughly $16 million per day - despite Elon Musk"s assurance that Tesla had its "all-time best quarter" for Model S and X deliveries.

And let’s not forget the fiasco surrounding Tesla’s autopilot software. Musk has repeatedly exaggerated its performance claims. And customers who paid more than $8,000 for a software upgrade more than a year ago have been repeatedly disappointed by delays and sub-par performance.

Musk’s exaggerations about the Tesla Roadster were particularly egregious.

Tesla claims that its new $200,000 Roadster is the quickest production car ever made, clocking zero to 60 in 1.9 seconds. Even crazier is the car’s unprecedented battery range: some 620 miles on a single charge. That"s a longer range than any battery-powered vehicle on the road—almost twice as long as Tesla"s class-leading Model S and Model X.

 

To achieve such power and range, Musk said the tiny Roadster will need to pack a massive 200-kilowatt-hour battery. That’s twice the size of any battery Tesla currently has on the road. Musk has previously said he won"t be making the packs bigger on the Model S and Model X because of space constraints. So how can he double the pack size in the smaller Roadster?

 

BNEF’s Morsy has a twofold answer. First, he expects Tesla will probably double-stack battery packs, one on top of the other, beneath the Roadster"s floor. That creates some engineering problems for the battery-management system, but those should not be insurmountable. Still, Morsy said, the batteries required would be too large to fit in such a small frame.

 

“I really don’t think the car you saw last week had the full 200 kilowatt hours in it,” Morsy said. “I don’t think it’s physically possible to do that right now."

Is it possible that, thanks to incremental improvements in battery density and cost, Musk somehow manages to hit these lofty targets? Perhaps, though, as Bloomberg points out, the fact that Musk is basing these claims on a set of projections that haven’t yet been realized is hardly confidence inspiring.

To be sure, there’s an important caveat to Musk’s claims. While they may be staggeringly exaggerated, there’s still the possibility that incremental improvements in battery technology will make these targets more feasible by the time the models hit the market.

Again, Musk may be banking on the future. While Tesla began taking deposits on the Roadster immediately—$50,000 for the base model—the first vehicles won"t be delivered until 2020. Meanwhile, battery density has been improving at a rate of 7.5 percent a year, meaning that by the time production starts, packs will be smaller and more powerful, even without a major breakthrough in battery chemistry.

 

“The trend in battery density is, I think, central to any claim Tesla made about both the Roadster and the Semi,” Morsy said. “That’s totally fair. The assumptions on a pack in 2020 shouldn’t be the same ones you use today."

However, in its analysis of the feasibility of Musk’s claims, Bloomberg overlooked one crucial detail: Back in August, the company"s veteran director of battery technology, Kurt Kelty, unexpectedly resigned to "explore new opportunities," abruptly ending a tenure with the company that stretched for more than a decade, and comes at a critical time for Elon Musk.

Kelty’s resignation – part of an exodus of high-level executives that is alarming in and of itself - hardly inspires confidence in Tesla’s ability to innovate. We’ve noticed a trend with Tesla: The more the company underdelivers, the more Musk overpromises.

In our opinion, this is not a sustainable business strategy.  
 

Elon Musk Pulls An ICO

By Chris at www.CapitalistExploits.at

First up, this beauty received by one of the crew here at HMS Capitalist Exploits:

Marketing an ICO...

Killer!

The Tesla ICO

Speaking of ICOs, last week something amazing, breathtaking, and revolutionary happened. We had another ICO... the very first of its kind.

An Initial Car Offering.

Pundits said it was an unveiling of the Tesla semi truck, but we now all know it was actually a thinly veiled capital raise.

Like many good things in life, this also began with foreplay.

Customers and shareholders are like women ovens - they need to be warmed up first.

So a few weeks before launching the ICO, the oven was dialled up:

Amazingly, I woke up this morning and, though having watched the unveiling, I looked around me and couldn"t notice anything different (though my dog had this strange look in his eyes).

My mind was surprisingly still in my skull and had not been sent into an alternate dimension, which was disappointing as I was quite excited by the prospects of that.

Anyway, so once the engine was warmed, we were treated to the de-robing of this.

I thought at first I"d missed it. Then I watched it again. And no, I hadn"t.

There was zero explanation of how Tesla would get all the dough to build this creature, where it would build it, and how (given the competition all have existing production plants, positive cashflows, dough in their treasuries, and access to credit markets) Tesla miraculously thinks that by the time it gets there it will have all of these things as well as the technology (that does not yet exist) to pull it off.

But then my nerves were calmed when they offered a warranty on the product. Wait, what? A warranty BEFORE they have a product? Killer!

I guess there"s a first time for everything.

But that wasn"t to be all.

No, then came the real showstopper as Elon went a step further in prostituting promoting Tesla. The fastest sports car in the world. And it may even just fly.

The kid in me did backflips. I sooo want a car that flies. Don"t you?

But then I remembered that there was a time when I really wanted the Easter bunny to be real, too.

Now, being older and wiser, I realise that rabbits screw up your lawn and chocolates make you fat, and I want nothing to do with either of them.

What I would like to know is how they found the time to muck around developing both a sports car and a giant truck when they can"t get a little Model 3 out?

Maybe that"s just me being a grouch. Heck, what do I know about cars? Mine"s 5 years old and smells of kids sweaty football socks which are buried in the back there somewhere.

Thankfully, I didn"t have to wait too long to figure out how they intend to fund some of this:

Now, when I saw this I"ll admit to having made the sort of noise a cat would make if fed through a mangle.

I realised then that Tesla was trying to pull off an ICO.

You see, the thing with 99% of ICOs is they"re kinda like the deals on Kickstarter, which means that you don"t actually get anything. It"s more like a donation... or part of a rewards points system. You know, like your air points where you get to trade them for a flight to Greece for a dirty weekend away or to upgrade your flight to first class so you can sit next to all the folks who eat lobsters in their bathrobes.

This works spectacularly well for anyone uneducated in investment markets. And that, my friends, is perfect for Tesla. Because you know what?

That"s about 90% of the population.

For the other 10%, here are some things to consider.

I"ll gladly admit to not really knowing a lot about cars. I like them very much as long as they take me where I want to go and do all the cool things that modern cars do.

But try explain to me about all the ins and outs of the bits inside and my brain does that man thing - it stops working and starts thinking about sex.

But what I do know a thing or two about is numbers and markets. And frankly, when Musk starts talking about these things he may as well be speaking Nepalese and explaining how to cook a yak stew because it"s all complete gibberish.

Tesla by the Colours

Last week when we were staring at Margot Robbie (don"t tell me you didn"t stare), and we said:

It was overconfidence that led the pointy-shoed suits on Wall Street to package subprime mortgages up, believing that a pile of isht when added to other piles of isht through the magic of diversification turns isht into non isht.

Like Margot explained in the Big Short (and bear with me as I"m extrapolating here): If we use Wall Street logic, you take the colour red and add it to more red... much more... you can get green.

So let"s run through Tesla by the colours, and then after that we"ll run through it by the numbers. Sounds fair?

• SolarCity: Red


• Gigafactory: Red


• Model 3: What Model 3?


• Model 3 in full production: Red


• Tax credits: Green... ah isht... no, make it red

Excellent!

So red + red + red + red + red = Green.

Tesla by the Numbers

Let"s take Q3 cashflow and toss in interest charges for 2017 (which is only fair — after all, someone has to pay them).

With that we realise that Tesla burned through about US$1.7bn or about US$500m a month.

Now, let"s be super conservative and say capital expenditures remain at 2017 levels, which is absurd and impossible given the new initial car offering and that semi truck, too (it"ll be far higher).

Anyway, let"s give it to them.

Well, let"s say they can find 1,000 fools buyers to drop a quarter million bucks on a pre-order for a car that they hope to receive some years in the future. Let"s say they can do that.

That"ll put US$250m into Tesla"s treasury, which will buy them less than 3 weeks. Killer!

I"m going to go out on a limb here and say that in the first quarter of 2018 Tesla"s going to lose US$1bn. Crazy, I know. How long for? It"ll go on until it doesn"t.

And here"s something to think about...

Here"s Venezuela"s 5-year sovereign CDS spread:

You may ask, why Chris are you posting this in an article about Tesla?

Well, Venezuela — like Tesla — made promises it couldn"t keep.

What I"d really like to know from you today is this:

Cast your vote here and also see what others think will happen

- Chris

“If you wouldn’t be short a multi-billion-dollar loss-making enterprise in a cyclical business, with a leveraged balance sheet, questionable accounting, every executive leaving, run by a CEO with a questionable relationship with the truth, what would you be short? It sort of ticks all the boxes.” — Jim Chanos

--------------------------------------

Liked this article? Then you"ll probably like my other missives on

this topic as well. Go here to access them (free, of course).

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Morgan Stanley: Tesla Will Surge To $400 Before Crashing To $200

When it comes to Wall Street cheerleaders, Tesla has few closer friends than Morgan Stanley"s Adam Jonas (current price target of $379). To be sure, the relationship cuts both ways, with Jonas relentless enthusiasm "for the EV maker granting Morgan Stanley a reserved spot for any future debt, convert and equity underwriting, as well as associated IB fees.  Yet, following the recent volatility in Tesla"s business model, in which the "production hell" that is Model 3 has been quietly relegated to the latest and greatest hype involving the company"s truck (funded in turn by deposits for the new Tesla $250,000 flying roadster) as well as stock price, not even Jonas can pretend that it"s smooth sailing ahead.

And so, in his latest forecast released overnight which has the same interval of confidence as a bitcoin price prediction, Jonas previews the stock performance of Tesla over the coming year, writing that he expects "Tesla shares to be extremely volatile in 2018, divided into two stages: (1) The alleviation of production bottlenecks with strong cash inflow, and (2) mounting concerns over the sustainability of the competitive moat."

His enthusiasm is even more constrained in his thesis:

Our Equal-weight rating on Tesla expresses our view that any number of positive and negative forces influencing the stock are more or less in equilibrium. While our $379 price target offers 20% upside from current levels, we believe such upside is less interesting on a risk-adjusted basis. From a shorter-term trading perspective, we anticipate Tesla’s stock price may  reach highs in the range of $400 or more over the next few months before facing some more serious headwinds later in the year that could take the stock significantly below current levels.

While the upside forecast is hardly new for Jonas, the downside is certainly a headscratcher for the TSLA faithful, because if Musk is suddenly left without his biggest Wall Street fan, who else is left to drum up interest in a business model that would send PT Barnum in an orgasm of shivering delight.

And just in case there is some doubt about Jonas" sincerity, he provides the following five bullets to justify why even he has gotten cold feet:

1. It is our working assumption that Tesla’s battery module production bottlenecks may be resolved in weeks. It is not possible to prove precisely when problems with zone 2 will be overcome, if they ever are at all. There is only evidence that Tesla is throwing its human and financial capital at the problem. Elon Musk stated that it is better to be late and get it right than to be early and get it wrong. We agree. Tesla is trying to make battery packs with extremely high levels of volume and unprecedented automation with bespoke high-speed robotics. In high-volume battery manufacturing, robotics is a core competency and a competitive advantage.


2. We believe that Tesla baked in flexibility to allow for a highly unpredictable production ramp. Tesla’s Model launch timeline was always seen as extremely aggressive. When the July 2017 launch date was originally communicated to the market, we had seen it as a stretch goal and a form of supply chain management to increase the probability of a successful volume ramp in 2018. Given Tesla’s experience with the Model S and X launches and the unprecedented level of vertical integration and automation of the battery assembly, we believe Tesla had negotiated unusual levels of flexibility with its supply base compared to its prior launches and the industry standard.


3. The motivation of the Tier 1 and Tier 2 supplier base to be involved with the Model 3 project is a relevant factor in de-risking the ramp. It is our understanding that the Model 3 has been seen as a ‘trophy contract’ for the supply base. For any Tier 1 supplier wanting to be associated with the cutting edge of automotive technology (electric, autonomous) the Model 3 was a ‘must win.’ Tesla’s early success with Model S had a profound impact on its image in the supplier community. Where suppliers previously viewed Tesla with high degrees of  skepticism/trepidation, many of the same suppliers were willing to prioritize supply of key systems and even to colocate key production facilities near Tesla’s factory. We believe flexibility on working capital during the sensitive early ramp phase could have reasonably been a part of the negotiation process.


4. The Model 3 working capital arrangement may be highly favorable to Tesla, at least in the short term, during the inflection of the ramp… substantially alleviating concerns over near term liquidity. Like many auto OEMs, Tesla pays its suppliers over many weeks (as long as 60 to 90 days depending on the supplier) while it collects from its customers far faster, particularly given Tesla’s ownership of its distribution channel. Tesla’s own financials bear this out as it collects on its receivables 10 to 20x faster than it pays its suppliers. During times of fast production growth (as we’d expect through 1Q/2Q18), this can pull forward significant amounts of cash which can serve to address much of the market’s concerns over near-term liquidity.


5. Following a hypothetical 1H18 pop in the share price, we could see scope for longer-term risks in the story to come to the fore. The key drivers of our downgrade last May are 2-fold: (1) our view that the global addressable market may not be as accessible as the market expects, and (2) increasing encroachment from consumer electrics and mega-tech firms who are planning comprehensive strategies focused on shared, electric and autonomous transport systems in direct competition with Tesla. We expect a steady and increasing amount of evidence to hit the market as 2018 develops that could stunt the enthusiasm of surmounting the Model 3 production hurdles. Admittedly, we cannot be precise with the timing of positive (1H) and negative (2H) catalysts that could move the stock significantly in the quarters ahead, leaving us EW on the stock.

As a result of the above, Jonas now assumes only 1,000 Model 3 deliveries in 4Q, down from 10,000 deliveries previously. That said, he leaves his 2018 forecast of 120,000 Model 3  deliveries unchanged, and some more details: 

We took 2018 GAAP operating profit from ($688) to ($1,001). Our 2018 GAAP EPS (ex stock comp) estimates went from ($3.66) to ($6.17) and our US GAAP EPS estimate went from ($6.58) to ($9.00). From 2018 through 2020, our average GAAP OP forecast moved from positive $280mm to negative $70mm. From 2021 through 2025, our average GAAP OP forecast moved from $4,491 to $4,242…. A 5% cut. The cuts are even smaller in the out-years. Our Tesla Mobility forecasts remain unchanged. We roll forward our DCF start date to December 1st, and our price target remains unchanged at $379

As of this moment, investors appear just as confused about Tesla"s future as its former biggest fanboy, located almost exactly halfway betwen the two stated extremes...

Tesla Unveils Its "Mind-Blowing" Semi And New Roadster, The "Fastest Production Car Ever Made"

Update 2: there were some rumors of a surprise during tonight"s presentation, and Musk did not disappoint when just as the semi-introduction was ending, Tesla also unveiled a new Roadster, the new version of its original sports car. According to Musk, It’s the fastest production car ever made, with speeds of just 1.9 seconds for 0 to 60 and 4.2 seconds for 0 to 100. It can handle a quarter mile in 8.9 seconds.

“This is the base model,” Musk said, then went on to mention that its top speed is above 250 mph. and it has a 200 kWh battery pack that offers 630 miles of highway driving range.

This just drove out of the Tesla Semi. A next gen Roadster!!!!! #TeslaSemiTruck pic.twitter.com/3gmyzhPHkl

— Lance Ulanoff (@LanceUlanoff) November 17, 2017

* * *

Update 1: this is what the new Semi truck, which Tesla will give a 1 million mile guarantee for, looks like:

This doesn"t look bad #TeslaSemiTruck pic.twitter.com/VrwHXb6qN8

— Madi ?????? (@Phalanxia) November 17, 2017

* * *

Tonight"s the night!! In what has been promised to "blow your mind," Elon Musk will unveil an all-electric Class 8 semi truck.

In the works for two years, it’s a project that’s aimed squarely at cleaning up the freight industry, which accounts for one-fifth of global oil demand... and which Goldman Sachs has warned will cost 300,000 jobs per year.

As Bloomberg notes, Chief Executive Officer Elon Musk has promised a truck that will “out-torque any diesel semi” and drive “like a sports car.” Seeing what an all-electric semi is capable of may be the most entertaining part of the night, even if it’s not a key metric for Tesla’s trucking customers.

It can transform into a robot, fight aliens and make one hell of a latte pic.twitter.com/8h9vvWu4f5

— Elon Musk (@elonmusk) November 15, 2017

“If you had a tug-of-war competition,” Musk bragged at a Ted Talk in April, “the Tesla Semi will tug the diesel semi uphill.”

The show is due to start at 8pmPT, 11pmET.

If the transmission is interrupted, readers can go to Tesla’s website by clicking the image below...

Here"s what to watch for - including some potential wild cards (via Bloomberg)

1. How Long Is Long Range?

The range of any electric vehicle is the critical metric—it defines how the vehicle can be used and the size of its potential market. Five years ago, few would have thought that a long-range heavy duty-truck was even possible. That’s changing fast. Daimler, the leader in Class 8 diesel trucks, recently unveiled a 220-mile range electric big rig, establishing a new bar for the industry. Long-range hauling across vast stretches of the U.S. would likely require more than 500 miles of range.

2. At What Cost?

Batteries are the single most expensive component of any electric truck, and the battery of a cross-country hauler could cost $100,000 even before you build the truck around it. The sticker price, regardless of size, is going to be higher than its diesel equivalent because of those pricey batteries.

Can Tesla keep the upfront price low enough to be offset by cheaper operating costs from fuel savings and simpler maintenance? Tesla may provide such figures, though many fleet operators will want to put them to the test with hundreds of thousands of road miles before they’ll be convinced.

Source: Bloomberg analysis

3. Platooning on Autopilot

Will the truck, expected to roll out by 2020, come with some level of autonomous driving? Tesla has been in talks with California and Nevada regulators about testing semis that can automatically follow a lead vehicle, a technique known as “platooning.” Platooning cuts fuel costs by reducing wind drag. And if the autonomous driving system is good enough to run without a driver, it could also dramatically cut labor expenses.

A teaser animation released by Tesla on Wednesday suggests the realization of one of Musk’s design aspirations: cameras instead of side door mirrors.

Tesla Semi unveil, 8pm PT tomorrow — watch live at https://t.co/8uVlhvzpu5 pic.twitter.com/hCIm5iCW6J

— Tesla (@Tesla) November 15, 2017

 

4. Who Are the First Customers?

The biggest players in freight are good at keeping their trucks in top driving condition and averse to messing with the supply chain. Convincing companies like Swift, Ryder, and Wal-Mart Stores Inc. to bring an electric drivetrain into their fleets will be a tough sell. Musk says Tesla has been gathering feedback from trucking companies throughout the development process (at least one, Ryder, confirmed it), so it would be a good sign if Tesla comes out of the gate with some early partnerships.

It could be that Musk’s own empire will be the first demonstration customer of the big rig. Tesla’s automotive reach is growing, and its SolarCity arm is the biggest rooftop solar installer in the U.S. Musk"s SpaceX could potentially use the vehicles to transport rockets, satellites, capsules, and equipment.

During earlier unveilings of Tesla’s passenger cars—the Models S, X and 3—the company started taking paid reservations immediately, at least 18 months before the first deliveries. Is that a strategy that can work with commercial trucks? How long until the first rigs hit the road?

A new 40-stall Supercharger station and customer lounge opens in Kettleman, California.

Source: Tesla

5. Infrastructure Solutions

A lot of infrastructure goes into servicing big rigs. Truck stops line the world’s highways, and fleet operators stand by with mountains of replacement parts ready to fix anything that might go wrong. How does Tesla plan to deal with these hurdles? Will they introduce a whole new type of charging system, with ultrafast chargers or a robot that swaps out used batteries for fresh ones? Who will build out and operate the charging network? Who handles maintenance and roadside assistance?

6. Location, Location, Location

Tesla’s car factory in Fremont, California, is running out of room. Musk wants to build 500,000 electric passenger cars there next year, and even if he misses that goal by half, it’s very unlikely Tesla would be able to squeeze in a big rig assembly line. Tesla’s massive battery factory near Reno, Nevada, which is still under construction, seems like a more natural fit. That factory is also where Tesla makes electric motors and drivetrains—primary components for an electric semi.

7. “Driver Comfort Features”

In a profile in this week’s Rolling Stone, Musk hinted at an unspecified “driver comfort feature” that he’s fond of. “Probably no one will buy it because of this,” he said, “but if you’re going to make a product, make it beautiful.” One possibility? A sweet coffee maker. In a Twitter post on Wednesday, Musk joked that the truck “can transform into a robot, fight aliens and make one hell of a latte.”

The Model 3 motor sits in line with the wheel axle. The semi will use multiple Model 3 engines in tandem to power the big rig semi trucks.

Source: Tesla

8. Shared Parts

Perhaps Tesla’s biggest advantage over other truck makers is that its Semi will share some core parts with its first mass-market car, the Model 3. Musk disclosed during an earnings call in May that the Semi uses “a bunch” of Model 3 motors, which sit in line with the truck’s axles. These relatively cheap electric motors will give the Semi unparalleled electric torque for getting quickly up to speed with a heavy load.

Tesla’s foray into commercial trucking is coming at an impossibly tough time for the company. The Model 3 is already months behind schedule, and Tesla is spending $1 billion a quarter to get things cranking.

But if Musk can get Model 3 production lines up to their promised rates, and the motors and battery cells are truly interchangeable between the Semi and the new passenger car, the scale of those operations would be profound. While traditional diesel truck makers are testing truck-suitable electric motors by the hundreds, Tesla could be making them by the hundreds of thousands—even before its first big rig hits the road.

*  *  *

Tesla shares have been on the downtrend since mid-September...

So this event could be just what Musk needs to turn things around and distract investors from the massive cash burn the company is suffering while hand-making Model 3s...

"Hotbed For Racist Behavior": 100 Tesla Employees File Lawsuit Alleging "Severe And Pervasive Harassment"

Poor Elon Musk just can"t catch a break.  After admitting that Tesla hasn"t yet figured out how to weld (a fairly critical task for auto OEMs), blowing through Model 3 production deadlines (which probably had something to do with rumors that "the most advanced auto OEM in the world" was making components by hand), and firing 100"s of employees, the embattled company now finds itself locked in yet another employee lawsuit...this time filed by over 100 black employees alleging racial discrimination.

Filed in the Superior Court in Alameda County, Musk"s latest legal nightmare alleges, among other things, that his Fremont manufacturing facility is a "hotbed for racist behavior" in which employees and supervisors "regularly use the "N word.""  Per Bloomberg:

Tesla Inc.’s production floor is a "hotbed for racist behavior," more than 100 African-American employees claimed in a lawsuit in which they alleged black workers at the electric carmaker suffer severe and pervasive harassment.

 

The employees are seeking permission from a judge to sue as a group and are seeking unspecified general and punitive monetary damages as well as an order for Tesla to implement policies to prevent and correct harassment.

 

"Although Tesla stands out as a groundbreaking company at the forefront of the electric car revolution, its standard operating procedure at the Tesla factory is pre-Civil Rights era race discrimination," the employees said in the complaint, filed Monday in California’s Alameda County Superior Court.

 

The lawsuit was filed on behalf of Marcus Vaughn, who worked in the Fremont factory from April 23 to Oct. 31. Vaughn alleged that employees and supervisors regularly used the “N word” around him and other black colleagues. Vaughn said he complained in writing to human resources and Musk and was terminated in late October for "not having a positive attitude."

Of course, this seems to be the continuation of a lawsuit filed by 3 workers in Alameda County last month (we noted it here: Tesla Sued For "Hostile Work Environment" After "Racist Drawings, Epithets" Appear In Factory) which also alleged that Tesla effectively contributed to the creation of a "hostile work environment" after "racist drawings and epithets" were found sprinkled around the Fremont plant.

Three former Tesla factory workers charge in a new suit the company’s factory is a hostile environment for black workers, adding to earlier accusations of racial harassment.

 

The men, who are African-American, claim in a new complaint filed Monday in state court that Tesla supervisors and workers used racial epithets and drew racist graffiti on cardboard boxes.

 

The suit, filed in Alameda County Superior Court, claims Owen Diaz and his son, Demetric, were called the N-word while they worked at the Fremont factory, and supervisors did little to stop it. A third man, Lamar Patterson, also claims he was subjected to insensitive racist remarks.

 

Demetric Diaz complained about the regular use of epithets to the staffing agency and another supervisor, the suit said. The supervisor told him he was just a replaceable temporary worker. Diaz was dismissed less than a week later in October 2015.

Making matters even worse, this latest lawsuit also disclosed an email from Musk in which he tells minority workers that they need to "be thick-skinned."

According to the complaint, Musk sent an email to Tesla factory employees on May 31.

 

“Part of not being a huge jerk is considering how someone might feel who is part of [a] historically less represented group,” Musk wrote in the email. “Sometimes these things happen unintentionally, in which case you should apologize. In fairness, if someone is a jerk to you, but sincerely apologizes, it is important to be thick-skinned and accept that apology.”

Not surprisingly, Mr. Vaugn"s lawyer was quick to point out that there is no legal precedent requiring employee"s to "have a thick skin."

“The law doesn’t require you to have a thick skin,” Organ said in an interview Monday. "Tesla is not doing enough. It’s somewhat akin to saying ‘stop being politically correct.’ When you have a diverse workforce, you need to take steps to make sure everyone feels welcome in that workforce."

Perhaps someone with some level of people skills should handle all firm-wide email blasts going forward...just a thought, Elon.

When A.I. Rules...

Elon Musk unveiled his apocalytpic vision of the world a few weeks ago...

“Until people see robots going down the street killing people, they don’t know how to react because it seems so ethereal,” he said.

 

“AI is a rare case where I think we need to be proactive in regulation instead of reactive. Because I think by the time we are reactive in AI regulation, it’s too late.”

 

“Normally the way regulations are set up is a while bunch of bad things happen, there’s a public outcry, and after many years a regulatory agency is set up to regulate that industry,” he continued.

 

“It takes forever. That, in the past, has been bad but not something which represented a fundamental risk to the existence of civilization. AI is a fundamental risk to the existence of human civilization.”

And since then numerous futurists have prognosticated on whether is mankind"s salvation or eventual downfall. Facebook"s Mark Zuckerberg embraces it while Stephen Hawking considers this the most dangerous moment in history as AI and automation are set to decimate jobs and change the social contract.

However, as Mike Wehner via BGR.com,  writes, when AI rules, one rogue programmer could end the human race...

The idea of small groups of humans having control over some of the most powerful weapons ever to be built is scary, but it’s the reality we live in. In the not-so-distant future, that incredible power and responsibility could be handed over to AI and robotic systems, which are already in active development. In a pair of open letters to the prime ministers of bother Australia and Canada, hundreds of AI researchers and scientists are pleading for that not to happen.

The fear, they say, is that removing the human element from life and death decisions could usher in a destructive age that ultimately spells the end of mankind. The AI weapons systems are, as the researchers put it, “weapons of mass destruction” which must be banned outright before they can do any serious damage.

“Delegating life-or-death decisions to machines crosses a fundamental moral line – no matter which side builds or uses them,” the letter explains.

 

“Playing Russian roulette with the lives of others can never be justified merely on the basis of efficacy. This is not only a fundamental issue of human rights. The decision whether to ban or engage autonomous weapons goes to the core of our humanity.”

In a setting where computers have the ultimate say in whether or not to engage in hostile acts — even under the guise of defending their own territories or protecting the populations they are programmed to protect — conflicts could escalate much faster than humans have ever seen. Weeks, months, or even years of posturing and diplomacy could turn into mere minutes or even seconds, with missiles flying before humans can even begin to intervene. And then, of course, there’s the issue of the AI being manipulated in unforeseen ways.

“These will be weapons of mass destruction,” the scientists say.

 

“One programmer will be able to control a whole army. Every other weapon of mass destruction has been banned: chemical weapons, biological weapons, even nuclear weapons. We must add autonomous weapons to the list of weapons that are morally unacceptable to use.”

It’s a frightening thought, but it hasn’t stopped military contractors from exploring the possibility of AI-controlled weapons and defense systems. This could be yet another way mankind engineers its own destruction.

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If you"re not concerned about AI safety, you should be. Vastly more risk than North Korea. pic.twitter.com/2z0tiid0lc

— Elon Musk (@elonmusk) August 12, 2017