Tesla is Fighting its Own Death

these findings suggest that there were

some certain scenarios where the car

might act in a way where the driver

couldn't take over fast enough to avoid

a crash or potentially break the law so

uh you know fixing this and the software

a lot easier than say having to bring it

into a car dealership like a Chevy would

do and have to change mechanical things

have to put in new equipment or

something like that so you know kind of

in short a little kind of a win for

Tesla because it doesn't have to turn

the system off it doesn't have to do any

mechanical changes but a black eye

because of the system's defaults

what what has Tesla said about the

defaults they agree with the

government's assessment of it

well they would disagree uh they pushed

back on the government that with the

government's findings but went forward

with the voluntary recall here it which

is often the case uh in these things

when the Nitsa is going to do this it's

either do a voluntary or it can become

much more messy down the road so you

know going back to Tesla traditionally

says that these systems are safer than

what the human can do uh is that's you

know maybe perhaps in debate sometimes

we don't understand where their data is

coming from but it gets to kind of the

core of these systems are they about

safety or are they about convenience the

criticism continues to be about Tesla

and other systems like it is that the

driver thinks the system can do more

than it is it is not fully self-driving

the robot is not in control the driver

needs to be in control needs to take

back that wheel needs to to be engaged

in the driving scenario and oftentimes

they get lulled into thinking the car is

doing more than it actually is yeah I

mean he's not he's not actually wrong

about that you have that same kind of

issue in aviation where you get lulled

into the idea that ah autonomy is taking

everything over or you don't have to

concentrate on anything the good news is

a lot of us using the autonomy

technology today realize in Tesla's uh

oh we're coming up on uh you know

potentially a dicey intersection or an

area where I want to pay attention a

little bit more and sort of activate

your your awareness and take over

earlier uh and and yeah look there's

absolutely this argument to be made that

if you rely too much on autonomy all of

a sudden your skills start waning and

you're not actually able to respond

appropriately in situations where it's

necessary to take over from autonomy but

what's wild and why Tesla's actually

getting all this crazy coverage right

now I mean they're still talking about

it right here on CNBC what's wild about

this is apparently there was this recall

that was issued and it's literally just

a software update but people are

freaking out over this there's so much

press going on over this and I think

it's remark workable in fact take a look

at this I got this text message

yesterday

it's Friday which means the flash sale

Ends Tonight check it out a link down

below it says hey you might have heard

this already but it's on channel 7 world

news that Tesla is recalling 360

000 Vehicles because of the self-driving

feature potentially leading to accidents

just a heads up and I wrote terrible

recall that requires a horribly

intensive automatic software update at

night

it's like it's true it's like look you

don't have to take the darn thing in

anymore when I had a Toyota Prius and I

had to take the sucker in for service

not a pain in the butt yeah take the car

in after you set an appointment because

now they want you to have an appointment

then you go drop it off and you have to

wait in line to talk to the person of

course when you go want to just drop off

the damn Keys you can't do that because

then they want to try to sell you

because that's how dealerships make

money they gotta sell you as much

freaking service that you don't need as

possible everything needs service every

time you go in there's something they

gotta sell you on there's always

something they have to sell you on and

and you're a loser is at least the

impression if you don't at least do some

of it because hey you know we've got

this whole list of things that are wrong

with your car but you know why don't we

just chip away at it and maybe do like a

quarter of it now and we'll save another

quarter for next time so that way you

don't feel like a loser you're still

spending probably a quarter or more than

you should have spent which should have

been zero right like the old school

dealership model is just trash it's so

annoying it's so inconvenient uh and

then you gotta pick the darn thing up

and then how are you gonna get back sure

you Uber but then it's a pain in the

butt because you gotta wait 20 minutes

for the Uber and you're wasting so much

time out of your day to bring a car to a

dealership and then go back and get it

or you're also wasting somebody else's

time if they're driving you to drop you

off which then it's even more ridiculous

because now you're wasting two people's

time

terrible terrible economic efficient on

inefficiency and so you have all of

these sort of like in my opinion I'm

just gonna call I'm gonna call it what

it probably is uh traditional Boomers

who don't know much about software or

have any care to learn uh about anything

Elon Musk touches and so the thesis is

oh man oh the headlines say recall there

we go we always knew the new stuff was

bad yeah just can't innovate can't can't

have good things no recalls that's right

yep Tesla getting screwed again it's

it's almost like people get happiness

out it's like I think it's like a a

schadenfoid a a psychology of of Tesla

it's like like the the old guards kind

of like

Elon losing again another recall for the

Teslas oh it's just like so stupid and

annoying uh it just drives me nuts but

ironically what's happening now is you

have this ironic Network effect where

the Tesla people are like you're the

idiot who has to take your car into

service whereas we just press update on

the car uh and in a weird way it

actually has this like in my opinion

positive marketing effect so even though

initially it's like it seems like all

this negative press I really think for

Tesla the argument of no press is bad

press is great I mean Tesla doesn't have

an advertising Department because they

don't need it as soon as there's a

software update everybody freaks out

calling it a recall and then what

happens

The Defenders of Tesla are like dude

it's a software update and then people

that

okay well I still hate Elon

it's like just so ridiculous uh but but

that's just what's out there meanwhile

the model Y is sold out for q1 it's the

first time these suckers have been sold

out uh you know into for about six

months which is fantastic now the model

y sold out they raised the price twice

over just the last uh six weeks here

after their initial price reductions and

now you also have Tesla having to

respond to allegations about them uh

firing people who uh uh you know wanted

to form a union in Buffalo New York now

let's be real and this is this is just

uh you know sort of the thesis here this

is like the quiet part that probably

shouldn't be spoken out loud let's be

real Tesla doesn't want unions okay most

most modern companies generally don't

want unions because ultimately you're

trying to automate away your labor

anyway okay like that's the long-term

goal right I mean think about it during

the pandemic did we really need 5 000

Math teachers teaching calculus on Zoom

or did we really need one math teacher

teaching calculus on zoom and then 499

sort of helpers to help grade papers or

whatever right like you put the best

teacher on Zoom they teach it and

everybody else you know sort of helps

and and tutors as necessary rather than

five thousand different people trying to

put together a zoom lecture plan right

so that is innovation that probably you

should be seeing in education but of

course that means a lot of people lose

their jobs and so that's bad because

people don't want to lose their jobs

because then they have to learn

something new and that's very difficult

to do especially when you're in a Groove

and you're in a habit and and I mean

it's hard to to change with the times

right and and I mean nobody wants to see

their job get replaced that's the

reality of it so unions help protect

labor from getting replaced I kind of

think about it like the Industrial

Revolution the luddites it's like oh

we've got uh we've got machines coming

in to sort our cotton hell no let's go

in and destroy the machines at night uh

and and so you've got luddites

destroying machines during the

Industrial Revolution because goodness

gracious what are we gonna do if we

don't have the manual necessity to to

actually separate the seeds from the

cotton why would why would we let

machines do that they're gonna bankrupt

us all and we'll be broke and we'll have

to learn to do something else of course

the goal is with Innovation you now have

the ability to get another job that

potentially pays you more money with

less time so for example if you're

making thirty thousand dollars a year

and then all of a sudden you turn around

and you realize wait a minute I could do

some quality assurance work in a tech

job and make twice as much money with

half as much time well now I got more

now I got more money and I got more time

to do something else right so innovation

in a necessary way kind of forces you

for a moment to go through a little bit

of hardship it but then you end up

better you end up working less and you

end up making more money but unions of

course and this isn't just straight a

bag on unions but let's be clear about

the incentive of a union the incentive

of a union is to survive and if the goal

of the Union is to survive then it

survives more when it has more union

members the last thing a union wants is

Less union members because then you have

less union dues and you have less power

but if union members are getting

replaced by robots at Tesla

then the Union's obviously going to be

pissed about the robots it's just like

the luddites during the Industrial

Revolution but then what happens when

the Tesla sort of sees that writing on

the wall or corporations see that

writing on the wall and they're like

well let's automate as quickly as

possible so that we can replace labor

before we can't replace labor anymore

because the unions have vesting and

mandatory employment and and non-fire

requirements uh you know pensions and

all these liabilities that essentially

make companies unable to innovate again

in the future I mean think about like

how do you how do you take a legacy

company with massive pension liabilities

like Ford or GM and turn them into an

efficient new Innovative company you

generally can't those companies have to

die out if they have unfunded pension

liabilities then the people end up

getting screwed anyway out of their

pensions I mean obviously their

insurance programs and things like that

in a place to sort of prevent the

defaulting on pensions because those

pension contracts are important but

ultimately it comes down to the the

company's guarantee because if the

company goes bankrupt you got big

problems but anyway long and short of it

is you have

a society where the the newest breed of

companies dare I say are relatively

anti-union and one of the reasons they

in my opinion are anti-union is because

they realize in order to stay Innovative

they have to be able to have Labor

flexibility in other words they have to

be able to kill the need for labor

because labor is uh I mean very

expensive let's just put it that way so

anyway these uh labelers in New York uh

were starting to work with a manager of

a Starbucks who helped organize the

Starbucks Union effort and that

Starbucks Union person essentially

motivated somewhere around 25 people

potentially more to put together a

letter and send it to Elon Musk

demanding that Tesla recognized their

right to form a union now employers have

a choice to recognize a union unless the

majority of you members of that company

uh more than 50 percent basically vote

for the union then the company is forced

to recognize the union so in the

meantime while a company is not forced

to recognize the Union what happens is

you end up getting this uh this this

place where a lot of companies don't

want to uh and so what ended up

happening is after roughly about 25

people happened to file a ladder saying

roses are red violets are blue unions

start with you which was also where in

the last time I pitched the fact that

today is February 17th with him there's

a coupon code expiring at 11 59 PM

actually it's a flash sale it's not a

coupon expiring tonight at 11 59 PM for

the programs on building your wealth or

the shadowing experience that's linked

down below but anyway uh after they sent

that within a day of sending that letter

on Valentine's Day 25 of them got fired

25 26 of them got fired now a day after

that which is last night Tesla responded

with in response to false allegations uh

and then so Tesla now is arguing there's

a false allegation that Tesla terminated

employees in response to new a new Union

campaign these are the facts behind the

event and let's just make it clear okay

Tesla is not going to come out and point

blank say yeah we don't want unions but

I think I've just made the case that

pretty much companies don't want Unions

that's that that's obvious that should

be very very obvious and so anyway Tesla

as sort of a cya because you kind of

have to do this what do they do you know

and of course I don't know all the

details so this is my opinion I could be

wrong but let's just be clear I mean

Tesla is talking about how they conduct

performance reviews and just

conveniently uh you know the the

conveniently four percent roughly four

percent wait four percent that's a

little bit more than I thought there

were about 650 labor oh no that is about

right yeah that's 26 employees okay

approximately four percent of the

employees on the autopilot labeling team

in Buffalo New York which by the way I

guess the minimum wage for that is like

19 bucks an hour and you're literally

just pushing a button like yes no yes no

like labeling what the aics is is not

you know it's not that difficult uh and

so I wish I made 19 an hour when I was

you know 18 years old or 16 years old

making smoothies of Jamba Juice or

folding clothes that Hollister that

people would just walk in and steal uh

at you know 16 and making seven dollars

an hour but whatever anyway so

approximately four percent of the

employees on the autopilot labeling team

in Buffalo were exited as a result of

this performance review cycle the

employees let go so as part of this

process received prior feedback on their

poor performance so it's kind of

interesting if that's true then it's

really convenient that basically the

people who are trying to unionize may

have also been the poor performers which

then it kind of makes you wonder are

poor performers people who want to

unionize or do people want to unionize

and Tesla's just saying they happen to

be performers it's kind of like a

chicken or egg problem and and I'm

curious to know what your opinion is so

leave me a comment on that but

uh Tesla makes the argument despite

feedback they did not demonstrate

sufficient Improvement and as a result

before we even knew about this Union uh

unionizing effort that was happening we

basically fired 26 people uh uh or or

warned them that hey their performance

wasn't up to par and then after the

union effort the timing just happened to

be very coincidental that we just

happened to fire everyone involved in

the effort right after the union effort

uh began so it really really convenient

for Tesla you know maybe maybe what a

company should do is just tell everyone

that their performance needs to step up

so that way if at any point they decide

to unionize you could just say well yeah

you're fired and we're not you're not

fired because you're forming you're

fired because we told you to get better

and you didn't get better yeah well you

tell everyone to get better I mean I

don't know right I'm just

look whatever it is I don't think I

think legal battles whatever legal

battles take years before you see a

union at Tesla it probably will be 2028

or or on uh and and by then you then

start scratching your head like okay are

we getting to a top of a growth cycle do

you potentially then spin off divisions

within Tesla to protect it from

unionization by spinning off like the

robot division from I you know I don't

know uh the the robo taxi division

whatever do you start spitting these

segments off to sort of insulate them

from unionization who knows there are

plenty of corporate tricks that happen

but uh yeah it's awfully convenient that

um that these folks happen to be exited

which is such a like a fascinating word

by the way like oh yeah we we don't fire

employees we exit them

uh anyway look

bottom line is generally uh yeah and

this is you know opinion here obviously

but there's plenty of research also

supporting this

but generally the impression is that

unionization hurts Innovation that

doesn't mean unions are bad obviously

it's important that employees are paid

appropriately for the value they're

providing I think where unionization

becomes problematic is when you end up

seeing uh disruptive unionization like

what you're seeing in the United Kingdom

where you have either teachers unions or

Pilot unions or whatever striking and

creating more Supply and chain

nightmares especially in Industries

where there's always already already

very nominal profit the airlines are

losing money hand over fast they're

highly indebted they're basically on the

brink of either mergers or collapse uh

because they they have a very hard time

actually surviving thanks to all of what

the labor costs in fact you have a lot

of Institutions today saying stay away

from high labor highly labor-intensive

businesses because well there's more

risk the more labor you have the more

risk there is and obviously then if you

can have Executives who can who can get

a lot done with minimal labor is is more

ideal uh but uh yeah it doesn't sound

like uh unionization and Innovation tend

to align very well and so I think for

the purposes of unions I think they

probably have to Rebrand their

reputation a little bit to make sure

that they can actually prove to

businesses hey look you know we actually

are pro-innovation like how do you

innovate and and transform unions from

not Innovative to Innovative right

that's probably something if I were you

know leading a union I'd be thinking

about it because I I don't think uh uh

the the common theme today is yeah

unions I I think that's kind of Gone by

the wayside mostly especially for people

sort of outside the system so uh quite

uh quite interesting

so uh

let's see Garrett Garrett hartel here

says unionization didn't hurt the

building of America a lot more of this

country used to be unionized yeah well I

I mean that that could be entirely

causation without correlation right just

because uh in the mid 19th century every

automaker that existed was unionized

doesn't necessarily mean that that

unionization was good for America

especially given that basically every

car company other than Ford every law

Legacy automaker other than Ford ended

up going bankrupt you know we could we

could just as easily make the argument

that unionization led to the bankruptcy

as as did not prevent the building of

America right so I I think uh I think

that's uh that's a difficult uh

difficult argument to make uh with

without uh you know clear clear

statistics I think this is interesting

Steve makes the argument a hundred

percent of poor performers want to

unionize uh to mooch the system poor

performers want to unionize says Alex

here uh I I mean there's there's always

the possibility of that at midnight King

email us at Kevin meet kevin.com we can

get you taken care of but anyway yeah I

mean look obviously there's there's no

uh there's no real way to I think make

the blanket argument and and be correct

that everyone who wants to be a union

sucks or everyone who wants to unionize

is great and Innovative right it's

obviously as with everything it's a mix

of both I think probably the the

argument that is often made is that look

if if you're an Innovative Technologies

and ultimately you're trying to replace

labor just by the nature of wanting to

innovate and minimize labor you already

stand in the face of what unions stand

for so unions stand for more labor and

businesses Stand For Less labor so no

matter which way you slice it Innovative

companies will always be looking for

ways to reduce labor and unions will

always be looking wait for ways to

increase labor so from a first

principles approach of the purposes is

of those two entities one is

diametrically opposed to the other they

will always stand in conflict with each

other because their mission is exactly

the opposite

that makes for a very challenging

environment and one that will

continuously be uh litigated forever so

I think really the that's probably the

only binary conclusion that you can make

where it's like yes absolutely unions

want more labor absolutely businesses

want less labor now the rest of that

well that's to be debated but either way

again the more Tesla sits in the news

the more Tesla ends up ironically

selling Vehicles so it's fascinating

just to see how Tesla has sort of

mastered the world of uh of advertising

without advertising so congratulations

Tesla sorry to

Charlie Monger

now there are also now some rumors going

around that uh Tesla is uh potentially

uh leaking the Cyber Truck Body in uh in

in this right here with Joey uh 2000

potentially showing this this Frame over

here of uh the side frame of a vehicle

I'm going to play that again right here

but these are some rumors circulating

so if we move to this next clip right

here this is what some people say would

be sort of wheel Bay one wheel Bay 2

cyber truck side body cyber truck frame

who knows we know that they've uh

started the process of manufacturing the

Cyber truck and we expect the Cyber

truck to actually be available uh for

its initial orders towards the end of

2023 and then more bulk orders in uh in

2024 there are a lot of rumors as well

as to what's to happen with Tesla

regarding the uh the March 1st investor

day a lot of folks believe that investor

day obviously is going to be about Elon

musk's Master Plan Three uh Master Plan

Three is highly rumored to potentially

include the announcement of a new

vehicle platform that could be Robo taxi

it could be steering wheel list maybe

it's an optional steering wheel uh you

know it could be some grandiose Vision

about what's to come in years down the

road

there are a lot of hopes for that I

don't think whatever we hear on investor

day is going to be something that

practically or meaningfully changes our

ability to buy anything from Tesla

anytime soon given that obviously we're

still substantially in the ramping phase

for the sexy Vehicles that's the S the

model 3 uh the X and the Y and then of

course we've got to get Cyber truck up

and going uh so it's probably still

going to be a while I'm personally a

little bit bearish on the end the event

mostly because I I don't like to get my

hopes up and that's not because of my

pessimist I think I'm a very optimistic

person but I suppose just in in history

uh you know whether it's battery day or

AI day

the information we end up learning tends

to be very nuanced and not very

applicable to a large investor base or

just sort of a large audience and tends

to be a little bit more uh Arcane

difficult to be understood by many right

and hopeful for the long-term future

which is fantastic and and those with

the interest in that are probably going

to love investor day but I think broadly

if if folks are betting on sort of some

sort of big run after investor day in

the stock because of what's announced on

yesterday it's not a bet I would make I

I wouldn't necessarily say that I would

go in short before because you just

never know but it's probably not a bet

that I would make just given the history

who knows maybe this time we'll be

surprised

[Laughter]

uh my boss thinks I'm stupid that I

invest in Tesla

and then uh real George here says mature

people just don't want things to change

well I I find that uh remember your your

average customer for Tesla is between 25

and 45 years old and it's statistically

more likely to be a dude I think that's

because they they really haven't come

out with sort of a mommy style vehicle

yet uh sure you could claim that the x

or y would work but

um but once yeah once you have two kids

and strollers you need a lot of space uh

but anyway uh yeah I do find that at

least anecdotally myself it seems that

uh any one of the older Generations

older than than the millennial

generation

so we're talking you know Gen X uh uh

you've got

um boomer generation and of course the

silent generation which they don't say

much but anyway the other two there you

generally seem to have a an aversion to

what Elon Musk is doing and I I believe

that a lot of that aversion to Elon Musk

is actually shaped by I hate to say it

because it sounds a little tinfoil

had-esque but by the mainstream media

because of the headlines that are so

negative towards Tesla that people and

and I I know this because I try to

bridge the gap a little bit

when I get my newspapers because I

actually physically get newspapers

Financial Times USA Today Wall Street

Journal New York Times the post is in

there you know whatever I get all these

it's very um

let's just say it's it's it's easy to

throw Elon Musk Tesla and negativity on

the front page and frequently makes the

front page and and I don't think there's

much critical thought that often goes on

beyond the media narrative which is not

an insult it's just sort of the way

things have been and it's unfortunate

definitely is unfortunate but uh so it

is