Tesla and EV News w/ Dillon L.

Elon is currently going off on the new Apple/Open AI partnership, and has gone as far as saying xAI may need to build a smartphone with Grok integrated natively, but more on that shortly…

FYI: any text in italics denotes it’s my take or my own added context. I’d also recommend: after you click an X hyperlink to login on the web if you’re not already. It will make the experience much better and you should also have the option to open the links directly in the X app if you’d prefer

⚡️ Elon confirms Tesla shareholder priority

“I’ve mentioned something like this before, but, if any of my companies goes public, we will prioritize other longtime shareholders of my other companies, including Tesla. Loyalty deserves loyalty.” Source: Elon on X

Let’s see how MSM spins this one as being evil 😈

⚡️ Tesla’s FSD 12.4.1: mixed early reviews

I’ve watched/read nearly all of the early videos/posts and the TLDW: this version still needs some work before going to a wider release

Elon has said it’s “an accurate assessment” that 12.4.1 is not quite ready to replace 12.3.6 so the rest of us may be waiting for 12.4.2

At this point, perhaps another two weeks 😏

There are some videos of 12.4.1 doing some seemingly advanced maneuvers (u-turn in a neighborhood to park across the street - AI DRIVR) and despite some regressions (lane indecision, reading signs), overall there is a lot of promise

The autopark also seems to be much improved and shifting into reverse seems to be much quicker than 12.3

FSD also remembers the placement of objects even after they are no longer visible by the cameras - this is called object permanence but some examples of this have been noticed on 12.3.6 too

⚡️ Tesla’s annual meeting: the votes

CalSTRS, a California pension fund is voting against Elon’s comp plan, calling it “ridiculous”. They own ~4.7M shares or $813M in TSLA. Bear in mind they’ve owned TSLA since before it went public, so they have done quite well with the investment. The CIO also said “even if these cars had AI in them, they are not worth 60-times earnings. That is absurd.” I happen to think that take is what’s actually absurd. Time will tell

Baillie Gifford (Scottish asset manager) is voting yes for the comp plan. They own ~17.8M shares or $3B in TSLA stock. Fun fact, Baillie Gifford was once Tesla’s second-largest shareholder after Elon and has held TSLA for more than a decade but they’ve been reducing their stake since ‘20 and now own .5% of the company

Norway’s sovereign wealth fund Norges Bank is voting against the comp plan citing “the size of the award, the structure given performance triggers, dilution and lack of mitigation of key person risk.” The fund owns ~1% of TSLA (31.6M shares or $5.5B) making it Tesla’s 7th largest institutional holder. They are voting for the redomestication to TX. In fairness, they also voted no in 2018. I’d also remind everyone, the shares for Elon’s 2018 comp plan (if Elon were to exercise the options) are already included in Tesla’s fully diluted shares outstanding. Elon responded:

The thing is, we don’t know how many retail investors have actually voted. Historically, retail is very apathetic when it comes to voting (which is precisely why Tesla is making such an effort). It is however good to know the ones that are voting, are mostly voting for proposals 3 and 4. Just know that this limitation w/ the data means any calculations about what % of the vote Tesla needs from institutions is still a guess. We’ll know soon enough, but I’m more optimistic for a yes vote (for the comp plan) now than I was last week

A few high ranking Tesla employees like Milan and Ashok have been going public with their support for Elon as the leader of Tesla. Ashok talked about how Tesla’s HW3 (which is now 5 years old) still has 8x the AI inference compute as the state-of-the-art Apple M3 chip. He also touched on Elon being the driving force behind Tesla doing computer vision in-house in a few months when it had taken other companies a decade or more. Tesla did it in 11 months. Milan mentioned how Elon was directly behind the culture of pragmatic innovation that percolates through the entire company by sitting with engineers and helping to solve problems directly. He said without Elon, many amazing things that Tesla has done would never have happened. The TLDR: Elon is critical for Tesla’s success in AI and Elon has a technical intuition to make important decisions way before others see it. I’d encourage you to read both of the posts if you haven’t already.

Some other investment firms have come out to publicly support the comp plan and the redomestication

⚡️ Lightning Round

• Elon mentioned Optimus is expected to cost between $20k - $30k during his gaming livestream this weekend, but this is not new information as on 3/26/24 he said he thinks Optimus will end up costing less than half of a car and before that he has said it will probably cost much less than a car, probably less than $20k (Sep. ‘22)

• Prufrock-3 from the Boring Company has emerged (⤵️) in the Giga Texas expansion. When complete, this tunnel will allow Cybertruck’s to get to the outbound lot underground, avoiding the busy highway and eventually, a CT engineer confirmed the trucks will make the trip autonomously. Another benefit for Tesla from the “Muskonomy”

• The European Commission is going to release tariffs on Chinese made EV’s this week. Volvo has already started moving production of its newer EV’s like the EX30 and EX90 to Belgium (from China) to avoid the expected incoming tariffs. This will likely be the first move like this of many

• Elon confirmed no Model Y refresh is coming this year. We should still be on track for sometime in 2025. Elon wants to avoid the Osborne effect here

• Tesla is offering 15k free SuC miles to anyone in the UK who buys and takes delivery of a new Tesla by June 30th

• In July ‘22, the California DMV accused Tesla of misleading customers about Autopilot and FSD capability. Today, a judge rejected Tesla’s bid to dismiss these claims. The judge said it was premature to dismiss the DMV case before a formal hearing but Tesla has said a hearing was unnecessary because the judge already has enough documents from which to rule

• According to the CPCA, Tesla sold 72,573 units in May, up 16.7% from April. The only number that really matters though is the YTD figure for Tesla China’s wholesale (domestic + exports) which is down 7.7% y/y (January - May)

• A 2016 Model S 90D has hit 431k miles with the original battery and original motors. The owner claims the battery has only degraded by 22% (losing 65 miles of range). This was from last week, but more people need to be aware of stories like this and the long-term benefits of owning an EV. The TCO advantage becomes even more pronounced when vehicles can last nearly .5M miles on original equipment. In theory and generally speaking, newer Tesla models should have a chance to last even longer

• Tesla also put a Taurus constellation on the CT steering mechanism PCB as another nod to Sandy Munro (⤵️). Sandy’s first significant success came while still working with Ford Motor Company on the Ford Taurus. Sandy was given the opportunity to deploy his new design methodologies on the Ford Taurus, which was transformed into a high value, high ROI vehicle. Ford was so impressed with the results they deployed the process on all new vehicle development programs

• The SCMP has confirmed buyers of EV’s in China replacing their petrol cars will get a subsidy of $1,380 and the incentive will be offered until the end of ‘24

• According to Benchmark, in 2014 lithium ion batteries were $400/kWh on average. In 2024, they’re now $78/kWh on average. This is thanks to low raw material costs (especially lithium and nickel) but as we know, greater scale helps as well and certain geographies are currently dealing with excess capacity

• Elon is very concerned about Open AI getting access to millions of users data through its new partnership with Apple and has said “if Apple integrates Open AI at the OS level, then Apple devices will be banned at his companies saying that’s an unacceptable security violation.” Elon also said “it’s patently absurd that Apple isn’t smart enough to make their own AI, yet is somehow capable of ensuring that OpenAI will protect your security & privacy! Apple has no clue what’s actually going on once they hand your data over to OpenAI. They’re selling you down the river.” Elon’s post was community noted though ⤵️

Elon then said “if Apple actually integrates woke nanny AI spyware into their OS, xAI might need to make a smartphone with native Grok integration.” So Tesla may not have plans for a phone, but another one of Elon’s companies might depending how this all plays out. I’d imagine Apple and Open AI will come out to clarify how this integration on Apple devices will work, but Elon has been very aggresively against his understanding of the partnership so far when it comes to data security

• If you’ve been wanting me to combat the EV FUD that Trump has been spreading, tune in to the Electrified episode tomorrow (Tuesday 6/11/24)

• Please feel free to share any and all feedback on the first iteration of this newsletter by replying or posting comments (on the web version). I’d like to continually refine it to make it as valuable as possible for the days there won’t be an Electrified episode. I will be using this platform for more than just that, but that will come in time 🙂