Ludicrous

I started reading this book because I have a member of my family who actually thinks Elon Musk isn't a useless weirdo.
Tesla's stock has dropped 20% from the week it's taken to read this book.

I was once a Tesla stan and a Musk bro. I watched “Who Killed the Electric Car” in high school and dreamt about the day of EV's becoming mainstream. And to his credit, Elon Musk did help spearhead a movement to make EV's mainstream and “cool”.
Was it at the cost of running a company so poorly and creating such poorly designed products that it actually harmed the image of EV's? Maybe.
Did the rebranding of an EV as a status symbol hinder the adoption of its more reliable, less flashy competitors, thus being counter-productive toward the goal of mass adoption? Perhaps.
Is Elon Musk a weirdo carnival barker who can't run a company to save his life? Absolutely.

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Government Cheese

The reason why Tesla hasn't gone bankrupt already is because of government subsidies (and questionable accounting). Tesla would have died in the 2008 crash if it didn't get Obama money. It would have shuttered shortly after that if California didn't have its well-meaning, yet seemingly easily manipulatable Zero Emission Vehicle (ZEV) credit system.

“85% of Tesla's 2009 gross margin (which only includes the parts and labor to produce cars) came from ZEV credits, and in 2008 its negative gross margin would have been four times worse without the credits.”

“In 2013, California revised its Zero Emissions Vehicle credit system so that long-range ZEVs that were able to charge 80 percent of their range in under fifteen minutes earned almost twice as many credits as those that didn't. [...] By demonstrating battery swap on just one vehicle, Tesla nearly doubled the ZEV credits earned by its entire fleet even if none of them actually used the swap capability. [...] If an automaker fails to sell enough ZEVs in a given year to earn a positive credit balance, it must purchase credits from an automaker with excess credits or face a fine. Since the fine for each credit shortfall was $5,000, Tesla could sell these three additional credits to other automakers for as much as $15,000 in marginal profit on each car it made.”

I'm no libertarian, but goddamn.

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The Hype Machine
Tesla has proven that companies don't have to be good at what they do to be successful. A hype machine can become self-sustaining for a limited time. Tesla went the same route later seen used by Andrew Tate: get paid for shilling the BS product. With so many weirdos evangelized by the lie, the stock price skyrockets beyond the realm of the rational.

“Best of all, selling Musk's vision didn't require industry experience, technological expertise, or the ability to analyze financial disclosures. The novelty of Tesla's approach to the car business meant that belief in Musk was more important than any of the lessons learned in a century of automotive history, which only trapped the established automakers and investors in their uninspiring prison of rationalism. As long as you believed in Musk and his high-tech and environmentally friendly future, you too could join the ‘winning team' and make money by evangelizing his visions.
The introduction of this financial feedback loop was a game changer. Combined with the power of online forums, social media, and the cheap price of entry into the online media business, Tesla evangelism became an enterprise. As the movement grew, more and more opportunities emerged, from publishing Tesla-specific news to selling Tesla accessories and eventually even selling Teslas themselves, all fueled by a shared belief that for many was becoming a core aspect of their identity.”

It's a cult. Plain and simple.

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Culture Clash — Tech Bros can't make cars

One of the main issues with Tesla are that it's run as a fledgling tech company, not as a serious automotive manufacturer.
“The worlds of car making and Silicon Valley startups couldn't be more different. Successful automakers are giant, process-driven bureaucracies that rely on rigidly systematized cultures to manage a continent-spanning ballet of manufacturing operations, supply chains, service infrastructure, and regulatory compliance. Their fundamental challenge is not so much designing the most innovative or desirable cars possible, but rather, designing vehicles that can be built at massive scale and at high levels of quality.” Tesla just wanted to “be disruptive” and “move fast and break things.”

But you can't do that when trying to mass produce a 2 ton piece of highly regulated equipment. You can do that with an app. You can do that with a computer or phone or other piece of consumer electronics. But it simply does not work with something like a car.

This book is very interesting if you have any interest in the complexities around large-scale product manufacturing. I find that extremely interesting because it's such a delicate balance of keeping down prices while trying to make something compelling enough for the customer.

Designing the car of the future is the easy part. Manufacturing the prototype is the less easy part. Manufacturing 10,000 is the hard part.

Tesla does not have the discipline to hone in the design to a point where its mass-manufacturing becomes feasible. It does not have the discipline to solve systemic design issues. Thus, it creates shitty, poorly designed and poorly constructed cars. But don't worry, they're iterative designs, meaning the car that comes of the line in March is shittier than the car that comes out in May. Because that's what you want in your 5- or 6-figure product, right?

Regulators can't even nail down the causes of issues because the company itself doesn't maintain effective records of when parts are replaced with better (or worse) versions. So there's no way to really say for certain if the cause of your car killing you was this or that. What does that result in? More preventable deaths!

It doesn't help that Silicon Valley startup ideology means pressuring/forcing your workers to put in 80-hour workweeks. Surely that won't result in...MORE errors and defects...right? I want the guy creating my 2-ton 80mph transport machine to have had as little sleep as possible during the design and manufacturing process...right?



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It's a 6-figure toy.

“...Musk knew his high-end clientele and he was ultimately right. The lower the price of a car, the more the owner is likely to rely on it and thus the more important quality is. At the high end of the market, factors like performance, styling, and brand prestige are the main concern, and customers are a lot less demanding of quality and reliability. Luxury and premium car brands like Ferrari and Land Rover are infamously unreliable relative to the rest of the market, but they are bought for performance and status rather than utility.”

This philosophy results in making shitty cars with lots of problems and a premium price tag.

“...quality problems were evident in the cars that were delivered to customers; threads soon began to appear on Tesla forums complaining of poor body panel fit, creaks and rattles, and missing software features. Musk would later admit to Ashlee Vance that Tesla struggled to convert Model S reservations to sales because ‘word of mouth was terrible,' but at the time Musk said the opposite: ‘It really is spreading quite wildly by word of mouth,' he told analysts on Tesla's Q3 2012 call.”


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The coverup
Nothing kills a hype machine quite like cold reality.

What do you do to maintain your image as the “revolutionary and super cool company” while simultaneously selling pieces of junk? Why you deny, lie, threaten to sue, and shut people up with non-disclosure agreements! That was the most insane thing this book revealed to me:
To shut customers up from talking about how shitty their Teslas were, the company refused to fix manufacturing defects under warranty unless the customer signed an NDA. The car could literally be killing people but we can't pop the hype bubble and we can't do a recall so we gotta shut em up from talking to, Reddit or the government.
A very cool and normal company.

“Having built up so much hype and anticipation around itself, the brand damage caused by a single recall could lead to a loss in confidence in its prospects. Without a solid business to support its heady valuation, a loss of confidence could have catastrophic, cascading consequences that could affect its ability to hire talent, raise fresh capital, and ultimately survive.” Can't pop the hype bubble!

“This precariousness, along with Tesla's world-saving mission, is part of what feeds an ‘ends-justify-the-means' culture inside the company. The powerful twin motivations of survival and salvation make it easy to wave off issues like regulatory compliance and cover up defects with nondisclosure agreements. They also make convenient cudgels with which to attack critics, shifting the focus away from the company's questionable actions to speculation about the critic's motivations for wanting to destroy a company that is only trying to save the planet.”

Here's another fun way they cover up their bullshit...
Regarding their self-driving cars continually crashing into things... “Because Tesla's data-recording capabilities did not fit the precise definition of an event data recorder (like the black box on an airplane), the company did not have to comply with legislation that gave ownership of the data to the vehicle's owner and required that they make a third-party data reading tool available. In numerous cases, Tesla used that data to publicly refute customer accusations of Autopilot involvement in a crash without ever offering access to the data itself. If Musk could tout misleading statistics about Autopilot's safety, could the public trust Tesla's unverifiable statements about what vehicle data said? Until the company finally released a data-reading tool in 2018, in the wake of a lawsuit in which the owner was able to maintain custody of onboard vehicle data and demand a third-party reading, they had no choice but to trust the company.”

What kind of sleazy bullshit is that? Par for the course at Tesla

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Elon Musk is just bad at his job.

“The Model X may have taught Musk hard lessons about modern vehicle design, engineering, and economics, but even at his most reflective and self-critical, he seemed to miss the larger issue. The core problem wasn't that Musk let his ideas run away with him; it was that Tesla's internal culture couldn't empower its cost accountants, manufacturing engineers, and suppliers to stand up to their CEO, chief product architect, largest shareholder, spokesman, and mascot.”


“Just as he had during the troubled Model X production ramp, when Model 3 ‘production hell' hit, Musk took to spending days on the Fremont plant's assembly, and sleeping on a couch or air mattress in a nearby conference room. Though his dedication was popular with fans who imagined him personally solving the company's problems, employees are nearly unanimous that his presence added more stress than it relieved.
‘He says it himself—he's not a manufacturing guy. He's an engineer, he's an innovator,' explains one former manager. ‘The problem with him and the plant is he's only really putting the pressure on the management team. He doesn't really understand where the true bottlenecks are because most of [the managers] who have a true bottleneck are not going to tell him. Therefore, when he's there it just causes animosity between the rest of the management team, and he's not benefiting himself or the company or the stockholders by being there.'“

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Self-Driving
Tesla uses optical cameras for its self-driving system. This is not capable of operating in fog and can easily fail under certain conditions. Musks overly zealous push for an under-regulated, over-hyped “autopilot” system has resulted in at least 1 preventable death and shows that human beings' lives should not be “beta tests” for a half-assed system.

Musk has continuously lied/oversold the capabilities of this system, lulling people into a false sense of security, resulting in crashes.

I want self-driving cars too, but i wouldn't trust anything short of a lidar-radar-optical image hybrid offered by a company not run by a lunatic.


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The gist:

Elon Musk is a carnival barker who says intentionally outrageous and impossible things to manufacture hype. He has cultivated a cult of personality led by Reddit weirdos who take his word as gospel. He's a liar and a narcissist. His far-fetched claims are constantly reigned in by more capable and intelligent people. He has never created anything in his live besides hype. His greatest achievement is how to most effectively maintain legions of brainwashed followers while overworking+underpaying the laborers who do the actual work and sucking up as much government money as possible.

As the reality distortion field around him has continually crumbled over the past few years, his ego has gotten quite the bruising. But since he's a narcissist, and habitually online, he won't simply fade away. No, he has to remain the center of attention. So what does he do? He buys the place where all of his haters congregate because he thinks he can prove they're all actually bots and that everyone actually loves him. He tied the financial future of 2 different companies together and to himself. And when one goes down, they all go down.