Subject: Re: FKA : TSLA
But Tesla's robotaxi rollout in Austin next month with be geofenced with a safety driver. In other words, Tesla is going with the very approach they have been criticizing for years. That says to me Tesla doesn't believe true FSD will be available any time soon, otherwise why would they even be bothering?

I don't know, but it may just be a regulatory thing - they have to show it's safe first, even if the company thinks it is safe. If they are right, then the geofencing and the monitoring can disappear, no harm done.


Just for the sake of argument, let's say Tesla is the first to achieve true FSD. That would be great, but being first isn't enough to remain in first. As an example, I present Tesla. Not very long ago, Tesla was the dominant global EV manufacturer. But today, Tesla's sales are flat or declining even as the market expands and competitors are gaining market share by double digits. Worse, Tesla once enjoyed tech-like margins, which are now down to car company-like margins. And realistically, every car company has plans for autonomous driving. If Tesla is first, they might not be first for long, and they might not even be first.

All this is true, and I agree that as a car manufacturer, their competitive moat is shallow. But I think that if they can get the FSD to work, they will be far ahead, because others have been relying on technology that doesn't scale.


I'm also a bit skeptical that even if Tesla cracks true FSD first that the cybercab will be particularly lucrative, for the simple reason they face the same problem all rideshare companies do: If you build out your fleet to meet peak demand, then a portion of your fleet sits idle the rest of the time. Uber/Lyft solve this with surge pricing, not owning their fleet, and employing gig workers. Eliminating the operator cost certainly helps with this problem and may even induce demand due to lower fares. But the basic problem remains as well as the personal preference and connivence of simply driving your own car. The cybercab might work out well, but I don't think it will be a blockbuster.

I think this is too pessimistic. If FSD works, it will work for Cybercabs, but it will also work for all the other Tesla cars, so there will be a big base right off the bat, and then of course there will be massive sales increases (and, probably, margin increases) for regular Tesla cars which people will want to own because of FSD. But it is a very complicated thing to analyze, as FSD would bring a whole series of social consequences that are hard to foresee, like maybe people getting rid of their second car and using other people's Teslas with ride sharing, or using Teslas instead of public transportation, etc. etc. I can't predict how it will all work out, but it's potentially a technology that gives Tesla tremendous options.


Same kind of thing with Optimus and AI. Telsa isn't the leader in either of these fields. Both could work out well, but I think a home run is unlikely.

I agree, it is even harder to estimate when these might be ready and how big the market for them might turn out to be. And there are others, like the semi, which should be available by the end of the year.

Bottom line, I think your arguments are fine, just as good as mine, but in investing we should try not to commit to one idea and stick to it come hell or high water. I am sure Tesla does not pass Buffett's rule 1 - but I am equally sure you can't count it out, and I think some of the negativity around Musk and around the company's recent sales results (which are themselves partly because of Musk's public image) may be obscuring just how close Tesla is to making a big breakthrough.

Regards, DTB