At Autonomy Day 2019 Elon Musk and Tesla made a variety of extraordinary promises about the potential financial benefits from purchasing a Robotaxi.
Other videos mentioned in this video:
A Eulogy for Twitter:
The truth about Elon Musk’s Emerald Mine:
Resources mentioned in this video:
- Simulation Code
- Interactive Code
- Autonomy Day 2019
- Tesla 2022 Q4 Earnings Call
- Elon Musk 2016 Tweet about Full Self Driving
- Master Plan, Part Deux
- Tesla announcement that all cars have the hardware for Full Self Driving
- Coverage about how Hardware 3.0 was actually necessary
- Coverage of NHTSA investigation into Tesla
- Elon Musk saying Full Self Driving would be done by end of 2017
- Coverage of how the Full Self Driving demonstration was manipulated
- Coverage of Elon Musk’s sexual harassment
- Cumulative Teslas sold
- Elon Musk’s lack of understanding about cryptocurrency
- Coverage of Tesla’s racist workplace
- Elon recommending people vote for insurrectionists
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Transcript:
00:00:00:05 - 00:00:19:20 Bennett Tomlin Hello, everyone, and welcome back to my personal channel where we always remember that the rules are made up and that the rich and powerful are to blame. Today we are once again talking about Elon Musk. Elon Musk has been promising that full self-driving is right around the corner for years now, and at some point in the future we may go over every single time he's made those claims. 00:00:19:27 - 00:00:44:29 Bennett Tomlin But today, I really want to focus in on the more specific financial claims which were made when Elon Musk and Tesla announced the Robotaxi Network in April 2019. For those who don't remember, the Robotaxi Network was going to be a network of self-driving Teslas that would make you money while you sleep and that you would be able to hire through an app like an Uber or Lyft or anything like that. 00:00:45:02 - 00:01:12:21 Bennett Tomlin This was going to launch in 2020 and would fundamentally revolutionize auto ownership, rideshare, autonomy, everything. Before we really get into those financial claims, though, we're going to very quickly talk about Elon Musk's previous claims about full self-driving and how they led up to this Robotaxi network. On January six, 2016, Elon Musk tweeted In about two years, someone should work anywhere connected by land and not blocked by orders. 00:01:12:27 - 00:01:32:20 Bennett Tomlin E.g. you're in L.A. and the car is in New York. This would mean full self-driving would have been released half a decade ago at the beginning of 2018. A few months after that, on July 20th, 2016, Tesla released Master Plan Part Deux, which explained the current plan for Tesla. There's a few interesting claims made and let's review them. 00:01:33:14 - 00:01:57:10 Bennett Tomlin One was, as the technology matures, all Tesla vehicles will have the hardware necessary to be fully self-driving with fail operational capability, meaning that any given system in the car could break and your car will still drive itself safely. It is important to emphasize that refinement and validation in the software will take much longer than putting in place the cameras, radar, sonar and computing hardware. 00:01:57:22 - 00:02:30:15 Bennett Tomlin In October, just a couple of months later, Tesla would announce that they had reached the point that all vehicles now being sold had the requisite technology for full self-driving. In July of 2021, several years later, Tesla would announce that actually that was not true. Full self-driving would require hardware 3.0, whereas the vehicles released previously only had hardware 2.0. Reports now claim that Tesla is working on hardware 4.0, which will not be able to be retrofit into previous vehicles. 00:02:30:22 - 00:02:32:11 Bennett Tomlin Don't worry, though, because Elon said. 00:02:33:03 - 00:02:59:27 Elon Musk Hardware 3 will not be as good as Hardware 4, But I'm confident that Hardware 3 will so far exceed the average in the safety of the average human. So, of course, how do we get ultimately to, you know, let's say for argument's sake, if hardware 3 can be, say, two or 300% safer than human hardware 4 might be, you know, five or 600%, it will be hardware five Beyond that. 00:03:02:06 - 00:03:07:07 Elon Musk But what what really matters is improving the average safety on the road. 00:03:07:12 - 00:03:30:26 Bennett Tomlin So it doesn't matter that these cars with hardware three can't get hardware four because full self-driving will definitely be out in 2018 for all these cars with hardware three I mean 2020. I mean 2023. I mean 2025. It's coming. Okay, Just wait. Just wait. It's coming. The master plan continues. I should add a note here to explain why Tesla is deploying partial autonomy now rather than waiting until some point in the future. 00:03:31:02 - 00:03:58:16 Bennett Tomlin The most important reason is that when used correctly, it is already significantly safer than in-person driving by themselves. And it would there be more and it would therefore be morally reprehensible to delay release simply for fear of bad press or some mercantile calculation of legal liability. It continues according to the recently released 2015 NHTSA report, automotive fatalities increased by 8% to one death every 89 million miles. 00:03:58:26 - 00:04:31:24 Bennett Tomlin Autopilot miles will soon exceed twice that number, and the system gets better every day. It would make no more sense to disable Tesla's autopilot, as some have called for, than it would to disable autopilot in aircraft after which our system is named. I highlight this because Tesla highlights the NHTSA report, and I think it's important to point out that currently the NHTSA is currently doing an investigation into claims made about Tesla Autopilot because they're worried it was misrepresented specifically that the safety of Tesla autopilot was misrepresented. 00:04:32:10 - 00:04:56:15 Bennett Tomlin I also want to add Tesla Autopilot has a habit of turning off in like the second or 2 seconds before crash occurs. And then Tesla says autopilot was not active when the crash occurs. This is corporate bullshit is what I think the technical term is. But that's how Tesla gets around a lot of the autopilot fatalities and casualties. 00:04:56:27 - 00:05:20:16 Bennett Tomlin Later on in the master plan, it says when true self-driving thing is approved by regulators, it will mean that you will be able to summon your Tesla from pretty much anywhere once it picks it up. You will be able to sleep, read or do anything else en route to your destination. You will also be able to add your car to the Tesla shared fleet just by tapping a button on the Tesla phone app and have it generate income for you while you're at work or on vacation. 00:05:20:22 - 00:05:44:01 Bennett Tomlin Significantly offsetting and at times potentially exceeding the monthly loan or lease cost. This dramatically lowers the true cost of ownership to the point where almost anyone could own a Tesla. Since most cars are only in use by their owner for 5% to 10% of the day, the fundamental economic utility of a true self-driving car is likely to be several times that of a car, which is not. 00:05:45:03 - 00:06:20:12 Bennett Tomlin It continues in cities where demand exceeds the supply of customer owned cars. Tesla will operate its own fleet, ensuring you can always hail a ride from us no matter where you are. In several of those you start to see the robotaxi promise your car will be able to make money for you in that Tesla will operate its own fleet of self-driving cars on October 19th, 2016, a few months after that new master plan was released, Elon Musk made the claim that by the end of 2017, a Tesla would be able to drive from L.A. to New York without human intervention, accelerating by a couple of months. 00:06:20:12 - 00:06:48:27 Bennett Tomlin His earlier beginning of 2018 timeline. One day later, on October 20th, 2016, Tesla would post their infamous Paint it Black video entitled Tesla self-driving demonstration that purported to demonstrate full self-driving on Teslas. It begins with the text. The person in the driver's seat is only there for legal reasons. He is not doing anything. The car is driving itself well, as it turns out, this video was deceptive. 00:06:49:10 - 00:07:19:27 Bennett Tomlin Allegedly, unlike all the other Tesla's 3D maps built in to preprogram the route, including where to stop and when they were preparing for this demonstration, the car crashed into a fence. This is based on the testimony of the former director of autopilot, and that testimony includes that this was done at the direct request of Elon Musk. Elon has also specifically maintained that vision alone, without these types of pre-built 3D maps would be sufficient for full self-driving. 00:07:20:02 - 00:07:44:25 Bennett Tomlin But in their demonstration, video did not live up to that statement. This whole prologue was mostly to illustrate to you all that the claims made since the beginning of full self-driving have been regularly false, are being investigated by regulators and really laid the groundwork for the most extraordinary set of claims which happened in April 2019 at Autonomy Day, when Elon Musk announced the Tesla Robotaxi network. 00:07:46:01 - 00:08:12:23 Elon Musk So any customer will be able to add or remove their car to the Tesla network. So expect this to operate as some sort of like a combination of maybe the Uber and Airbnb model. So if you own the car, you can add or subtract it to the Tesla network and Tesla would take 25 or 30% of the revenue and then in places where there aren't enough people sharing their cars, we would just have dedicated Tesla vehicles. 00:08:15:22 - 00:08:23:27 Elon Musk So when you use the car, we'll show you our ride sharing app. So you able to summon the car from the parking lot, get in and go for a drive. 00:08:24:16 - 00:08:27:19 Bennett Tomlin Which they were confident would launch in 2020. 00:08:28:04 - 00:08:32:17 Elon Musk I feel very confident predicting autonomous Robotaxis for Tesla next year. 00:08:32:27 - 00:08:39:03 Bennett Tomlin And that by 2022 Tesla would be selling cars without pedals or steering wheels. 00:08:39:03 - 00:09:05:08 Elon Musk And at some point you won't need steering wheels or pedals and we'll just delete those. So as as as these things become less and less important, we'll just delete parts. Just know they won't be there because they like probably two years from now, we will make a call that has no steering wheels and pedals, and if we need to accelerate that time, we can always just delete parts easy for anyone. 00:09:05:08 - 00:09:29:10 Bennett Tomlin Fans who accidentally wandered in here. It's currently 2023 and we do not have Robotaxis or Teslas being sold without pedals or steering wheels. Well, I guess some of them don't have steering wheels and instead have really challenging and problematic yokes. But I don't think that's what was meant here. Elon specifically said that Tesla will have over 1 million robotaxis on the road next year, meaning 2020. 00:09:29:24 - 00:09:58:05 Elon Musk By the middle of next year we'll have over a million Tesla cars on the road with full self-driving hardware feature, complete at a reliability level that we would consider that no one needs to pay attention, meaning you could go to sleep in. From our standpoint, if you fast forward a year to maybe a year, maybe a year and three months at a bit next year for sure we will have over a million robotaxis on the road. 00:09:58:24 - 00:10:16:15 Bennett Tomlin And also promise that these would be robotaxis with no one in them, no safety driver, nothing full self-driving during this period. You might also meet a variety of other absurd statements, including if you buy a car that does not have the hardware for full self-driving. It's like buying a horse. 00:10:16:25 - 00:10:42:04 Elon Musk Really fundamental message that consumers should be taking today is that it's financially insane to buy anything other than a Tesla. It would be like owning a horse in three years. I mean, fine, if you own a horse, but you should go into it with that expectation. If you buy a car that does not that does not have the hardware necessary for full self-driving, it is like buying a horse. 00:10:42:15 - 00:11:13:23 Bennett Tomlin This comment about horses aged particularly bad considering it's been reported that Elon used horses to attempt to buy off survivors of his sexual harassment. Let's focus in on the financial claims though, that were made during the course of Tesla Autonomy Day in 2019, because wow, they are a doozy. Consider this slide when I think is very important because on an island in Tesla say and remember this is in 2019 the current price for a model three robotaxi is $38,000. 00:11:14:06 - 00:11:23:12 Elon Musk So the current cost of a model three ROBOTAXI is less than $38,000. We expect that number to improve over time. 00:11:23:18 - 00:11:54:05 Bennett Tomlin I want to make sure we all hear clearly that, he said. Current price for a robotaxi, which is incredible because four years after this, not a single person has been able to buy a robotaxi for that price. How is it current then? And yet no one's been able to do it. I don't understand how that works linguistically. You know, these slides also start by establishing a longevity value for the car in efficiency value, namely that the cars should last for 1 million miles and the motor should get 4.5 miles per kilowatt hour. 00:11:54:25 - 00:12:04:28 Elon Musk And we're designing the cars. The cars currently being built are all designed for a million miles of operation. So drive units designed, designed and test and validated for 9 million miles of operation. 00:12:05:10 - 00:12:18:14 Bennett Tomlin An Elon does try to cover himself a little bit here by saying that their current battery pack is only good for about 350,000 miles. But the one going into production production next year is 2020. Remember, we'd have a million mile longevity. 00:12:19:00 - 00:12:39:14 Elon Musk The current battery pack is about maybe 300 to 500000 miles of the new battery pack that's probably going to production next year is designed explicitly for a million miles of operation. The entire vehicle battery pack inclusive will well, it's designed to operate for a million miles with minimal maintenance maintenance. 00:12:39:22 - 00:12:49:09 Bennett Tomlin Elon also let us know that within three years, which would be 2022, the price to purchase a robotaxi capable car would have fallen to $25,000. 00:12:49:23 - 00:12:59:26 Elon Musk Yeah, I'd probably say long term, three years of robotaxi with both eliminated parts, it maybe ends up being $25,000 or less. 00:13:00:01 - 00:13:29:12 Bennett Tomlin Currently in 2023. The cheapest vehicle Tesla has an inventory are model threes that run about $39,000, not including the full self-driving package. This is 156% of the $25,000 that Elon promised, perhaps even more striking than the promises about the cost of entry, though, with the promises about how filthy rich that the Robotaxi network would make you. Elon made the claim in 2019 that the current cost to run a robotaxi was under $0.18 per mile. 00:13:29:16 - 00:13:41:22 Elon Musk The cost to run a robotaxi we think less than $0.18 a mile and and dropping like this is this would be current. Its current cost future costs will be lower. 00:13:43:08 - 00:14:11:08 Bennett Tomlin Including all overhead. Again, it's incredible to me that they were able to calculate a current cost when there were none currently operating. But I like Elon's vision and have a vastly different hold on reality than he does. We also start to get other numbers from inland, including that they assume the robotaxi is empty for half of its miles and they expect that they'll be able to make $0.65 of profit per occupied mile to about 90,000 miles per year and make $30,000 in profit per year. 00:14:11:17 - 00:14:20:05 Elon Musk They say. What would be the probable gross profit from a single robotaxi? We think probably something on the order of $30,000 per year. 00:14:20:15 - 00:14:40:11 Bennett Tomlin Lasting for 11 years. This is especially incredible because it means by now you should be able to buy a $25,000 robotaxi and pay it off using the proceeds of running a robotaxi for a single year. Then you have ten years of nice and easy profit making your $25,000 investment net. You're about $300,000 over its lifetime. 00:14:40:18 - 00:14:49:25 Elon Musk So not in nominal dollars. That would be, you know, a little over $300,000 over the course of 11 years. It might be higher. I think this consumption is actually relatively conservative. 00:14:49:28 - 00:14:57:24 Bennett Tomlin But this led me to wonder what would happen if instead of just sitting on those profits, you reinvested them into running more Robotaxis. But similar. 00:14:57:24 - 00:14:58:23 Elon Musk To Airbnb. 00:14:58:23 - 00:15:01:08 Bennett Tomlin Though, in that I have this home, my. 00:15:01:08 - 00:15:02:26 Elon Musk Car and now I can just. 00:15:02:26 - 00:15:05:00 Bennett Tomlin Rent them out so I can make. 00:15:05:00 - 00:15:06:12 Elon Musk An extra income from. 00:15:06:12 - 00:15:06:24 Bennett Tomlin Owning. 00:15:06:24 - 00:15:23:03 Elon Musk Multiple cars and just renting them out like I have a model. Three. I aspire to get this roadster here next when you build it and I'm going to just rent my model three out, why would I give it back to you? You know, I guess you could operate a rental car fleet, but I think this is very unwieldy. 00:15:24:04 - 00:15:30:29 Elon Musk Yeah, I don't know. It seems easy. Okay, try it. 00:15:31:14 - 00:15:48:21 Bennett Tomlin Some of you may not know this, but in a past life, I was a data scientist. Now I'm a writer and a podcaster, and I make videos on YouTube and so don't deal with numbers or coding that much anymore. But I thought it would be fun to do just a little bit of math, try to figure out just how rich the Robotaxi network could make you. 00:15:48:28 - 00:16:09:24 Bennett Tomlin The code for this is linked in the description. I'm not a great coder, but this should be functional and we'll let you play with some of my assumptions. Let's start with a more realistic scenario where we assume that the cost per Tesla is $39,000 for simulation. We will need to set a few assumptions to make this work. We start by assuming that for the first robotaxi you had to finance the entire thing. 00:16:10:02 - 00:16:32:29 Bennett Tomlin And so your starting cash is -$39,000. We set the price for each new robotaxi you obtain at that same $39,000. And then we borrow many of Tesla's assumptions. Each Robotaxi will operate for 1 million miles before being taken out of service, doing 7500 miles per month. It makes $0.65 of profit per occupied mile and half the miles will be occupied. 00:16:33:15 - 00:16:57:13 Bennett Tomlin We assume that you're getting the payouts for the Robotaxi network monthly, though if they're more often, you end up making slightly more because you're able to accelerate the compounding. We further assume that whenever we have enough cash on hand to purchase a new robotaxi we do and it gets deployed very next month. We run this simulation for a total of 20 years, which would be long enough that we actually see some of the cars fall out of service and no longer be usable. 00:16:57:17 - 00:17:19:11 Bennett Tomlin So how profitable do these two decades end up being for you? Well, it starts out pretty slow because you need to pay back the initial debt at the end of the first year, 12 months, and you still have almost $10,000 in debt. You are still operating your single robotaxi and you have made about $29,000 so far. By the end of the second year, you're no longer in debt. 00:17:19:15 - 00:17:42:00 Bennett Tomlin You have $19,500 cash on hand and you still are just operating your single robotaxi in month 32, you're finally able to buy your second robotaxi and this is where things start to accelerate. Then a year three you're operating two Robotaxis and have earned a total of $97,500 over the next few years. Things really accelerate the end of year four. 00:17:42:02 - 00:18:13:19 Bennett Tomlin You've now doubled the size of your fleet to four taxis and you have made a total of $180,000. You're five. You have more than doubled your fleet again, nine total robotaxis total of $353,000. You're six, you've doubled your fleet again, 18 total Robotaxis now have $714,000 . Year 7 37 Total Robotaxis you're buying more than one new car per month and you have now made over $1,000,000 with your total being 1.4 million. Year eight. 00:18:13:26 - 00:18:39:17 Bennett Tomlin Your fleet is now 76 Robotaxis. You've earned a total of 3 million. Year 9 58 robotaxis and you've earned a total of $6 million Year ten the fleet is 327 Robot taxis. You've earned a total of 12.7 million and every single one of the cars you have purchased is still in service because they are good, according to Elon Musk for 1 million miles. Year 11 00:18:39:21 - 00:19:06:12 Bennett Tomlin is where we finally see your original robotaxi end its loyal service. Your fleet is 678 Robotaxis and you have made over $26 million. Year 12: Your fleet is 1401 Robotaxis and you have earned a total of $54.7 million. Year 13: 2900 Robotaxis you're buying well over 100 Teslas each month and you've earned a total of $113 million. Year 14: 00:19:06:12 - 00:19:30:22 Bennett Tomlin Your fleet is now over 6000 Teslas and you have made $234 million. Year 15: Your fleet is now over 12,000 Teslas and you have made a total of $484 million. Year 16: Your fleet is now over 25,000 Teslas. You are purchasing more than 1000 Teslas each month, and you have made a total of over $1 billion. Year 17: 00:19:30:22 - 00:19:58:19 Bennett Tomlin Your fleet is now over 53,000 cars and you have made a total of over $2 billion. Year 18: your fleet is now 110,000 cars and you have made a total of $4.2 billion. Year 19: your fleet is still 227,000 cars and you have made a total of $8.8 billion. Year 20: where we end this simulation. You have a total active fleet of 471,000 cars. 00:19:58:26 - 00:20:25:02 Bennett Tomlin Over the last year. You have purchased 250,000 Teslas, currently about half of their total annual production quantity, and you have earned a total of $18 billion, nearly half of what Elon Musk wasted on Twitter, all from purchasing a single robotaxi and reinvesting the profits. This is fucking absurd. It implies an annual interest rate compounded monthly of over 60%. 00:20:25:10 - 00:20:42:11 Bennett Tomlin Bernie Madoff's Ponzi promised 10%. Anchor in the Terra Ponzi scheme promised 18%. I honestly am shocked that federal agents did not immediately walk out on stage with handcuffs to take Musk's in like this is unworkable. And Elon described these numbers as conservative. 00:20:42:19 - 00:20:44:23 Elon Musk I think this consumption is actually relatively conservative. 00:20:45:05 - 00:21:07:17 Bennett Tomlin And I'm actually being extra conservative because I didn't use the price that Elon specified. If we go down to $25,000 each like Elon said they should cost, then things get even crazier If we change our assumptions to that. Tesla's cost $25,000 each like Elon said they would. Then your fleet hits the same point that the 39 case did in 13 years. 00:21:07:22 - 00:21:31:23 Bennett Tomlin And if we keep going all the way to the 20 year point, you end up with 1.1 billion Teslas, you have one Tesla for every eight people on Earth. Well, writing the script at the in May, I checked CleanTechnica and they said there have been a total of about 4 million Teslas delivered. But you you personally have 1.1 billion based on this model. 00:21:31:24 - 00:21:59:20 Bennett Tomlin After 20 years, you would have approximately 250 times more Teslas than have ever been sold. As of today. Oh, and you also would have made a total of $27.6 trillion or approximately the entire U.S. GDP for a year. This one has an implied annual interest rate of over 100%. It is so absurd. And the really frustrating part for me is that we are being conservative. 00:21:59:26 - 00:22:17:04 Bennett Tomlin We are assuming you were only able to get a loan for a single car, but that isn't necessarily true. There's plenty of people who could very conceivably be able to get a loan to by multiple cars. So let's run that model quick. Let's imagine you could get a small million dollar loan from your dad to start your business. 00:22:17:06 - 00:22:19:18 Donald Trump My father gave me a small loan of $1,000,000. 00:22:19:18 - 00:22:46:10 Bennett Tomlin Well, then for the $25,000 case, you end up with a total of 75 billion Teslas in your fleet, about ten for every person on Earth. And you will have earned a total of $1.8 quadrillion, which is a lot of money, even for my more conservative $39,000 case. You still end up with 19 million Teslas, which is again five times the total number of Teslas ever sold. 00:22:46:12 - 00:23:10:04 Bennett Tomlin And you will have earned seven and $54 billion. Not bad for a nice small loan, but there's a way to make it even clearer how absurd these numbers are, though. Recently, Elon Musk bought Twitter in a deal worth about $44 billion. What if, instead of a social network that he is currently destroying, he instead spent just 1% of that amount investing into the Robotaxi network? 00:23:10:20 - 00:23:35:07 Bennett Tomlin Well, in the conservative $39,000 case, and assuming you have to pay back all those cars you start off with, you end up with a mere 8.9 billion Teslas, one for everyone on earth with a few extra and earn a paltry $346 trillion in the Muskian $25,000 case, then you end up with a much more impressive 33 trillion Tesla's 4000 per person on Earth. 00:23:35:19 - 00:23:59:06 Bennett Tomlin You will have earned $844 quadrillion, which means you now own the earth and the moon and the sun. And Elon Musk, congratulations. You won the game. Clearly, these numbers are stupid. So why am I belaboring them? Because it takes very little effort to see how stupid these are, which means Tesla and Elon knew how stupid they were when they said them at Autonomy Day. 00:23:59:12 - 00:24:28:00 Bennett Tomlin Furthermore, I included the Twitter example because it emphasizes one thing if the numbers were real and robotaxis were real, then Tesla would not sell Teslas. They would use every single Tesla they can create as part of this absurdly profitable network. The fact that Tesla continued to sell Teslas when they claimed they were mere months away from launching the Robotaxi network was proof that the Robotaxi network was not really coming. 00:24:28:10 - 00:24:49:12 Bennett Tomlin What is really crazy to me is that when I changed nearly all the assumptions in this model to try to make it more reasonable, the numbers we get are still unreasonable. Let's go back to our assumptions and talk about how we can tweak these to make this make a little bit more sense. Let's assume instead of 1 million miles, which no matter how much Elon pretends is realistic. 00:24:49:25 - 00:25:03:00 Elon Musk And we expect that we're literally designing we're designing the cars the same way that commercial semi-trailer semi-trucks are designed. Commercial semi trucks are all designed for a million mile life. And we're designing the cars for a million mile life as well. 00:25:03:13 - 00:25:25:06 Bennett Tomlin It's just not, let's say, instead that each Tesla last for 350,000 miles. This is far closer to the actual possible lifespan for their batteries. Now, let's be clear. This is a huge change to the numbers Musk gave. We're suggesting each car will actually get 65% less lifespan than Elon thought was conservative, less than half. What else looks wrong in the model? 00:25:25:16 - 00:25:43:21 Bennett Tomlin Well, let's assume the profit per mile starts where they say it's not going to be static. As more and more robotaxis are deployed, we're going to assume that the profit per mile decreases to represent the market getting more competitive. To model this, I added two numbers into the model. One is a coefficient that the profit per mile is multiplied by each year. 00:25:44:01 - 00:26:06:15 Bennett Tomlin So if the profit starts at $0.65 per mile and the coefficient is 0.95 each year, it would be multiplied by 0.95 to reduce the profit per mile. This still isn't seem exactly right to me because honestly, I think we would expect the proportional amount, the profit decreases to decrease slightly per year. So I added another value which that coefficient is raised too. 00:26:06:22 - 00:26:24:14 Bennett Tomlin So if the coefficient is 0.95, we can raise it to this other value, which is currently also set to 0.95 and exponentially decay the decaying profit per mile. If you don't understand what I'm saying, then playing around with the code might help. Or just note that I've made it so that every year profits go down. You can't make as much as you did the year before. 00:26:25:00 - 00:26:46:16 Bennett Tomlin Furthermore, there's inflation in our world. Teslas have not kept getting less expensive, as Elon thought. So we're going to add in an inflation coefficient in this case 0.03. Each year we model that the cost of a Tesla will increase by 3%. We're getting closer to a final model now, but I did want to add a little bit of modeling surrounding how cost increases your business scales. 00:26:46:23 - 00:27:12:22 Bennett Tomlin So I made it so every order of magnitude your fleet increases ten 100, 1000, etc. The price per Tesla increases by 3%. To help simulate staffing. Another complexity is that come as it scales. So I basically gutted the numbers Elon described as conservative and you won't know the truth, the results are still fucking ridiculous. If you start with the $39,000 Tesla case, you still end up with a fleet of 31 Teslas, which doesn't sound like very much after what we've seen. 00:27:12:22 - 00:27:37:08 Bennett Tomlin But still 30 more than what you started with. And you earn a total of $6 million in the $25,000 case, you end up with 7700 Teslas and earn a total of 569 million. These numbers are far smaller, I know, but remember, we cut the longevity by 65% more than half. We cut the profit every single year, raised the price for cars every single year. 00:27:37:12 - 00:28:02:20 Bennett Tomlin And this is despite Elon saying his numbers were conservative. The 39,000 other case I just gave still has an annual implied interest rate of 25% per year, more than anchor in the Terra Ponzi and more than double what Madoff promised in his Ponzi scheme. The $25,000 case has an implied interest rate of 50%, which is more than double what anchor paid in the Terra Ponzi and about five times what Madoff paid in his Ponzi. 00:28:02:25 - 00:28:28:10 Bennett Tomlin Even when you gut Elon's supposedly conservative numbers, they still end up absurd. And these become even more absurd when we consider the lone case in the Twitter case we discussed before. Very quickly, since we've already been in this section, the video for too long with $1,000,000 loan, the $39,000 case results in you having 970 Tesla's and a total earned of $227 million with an implied rate of return of 27%. 00:28:28:23 - 00:29:06:29 Bennett Tomlin The $25,000 case 281,000 Tesla's total earned of $23 billion with an implied rate of return of 51% with 1% of the purchase price of Twitter in the 39,000 other case, 209,000 Tesla's total earned of 61 billion with an implied rate of return of 24% per year. In the $25,000 case, 49.5 million Tesla's in your fleet. Remember, they've currently only sold 4 million total earn of $4.7 trillion, implied rate of return 47% per year. 00:29:07:15 - 00:29:34:05 Bennett Tomlin These numbers are so dumb. These numbers are bad. In my day job doing cryptocurrency criticism, I would be desperately warning about how these rates are not possible and are not sustainable. But the richest man in the world had no fear saying these on stage. He had no problem promising things they absolutely could not deliver. Why, though, Autonomy Day, which we've been talking about, happened in April 2019. 00:29:34:14 - 00:30:01:06 Bennett Tomlin Just over a week later, Tesla raised over $2 billion between sales of common stock and convertible notes leading up to this raise. Tesla needed to show they had opportunities for high margin products, which would justify their massive valuation. And it just so happens that they presented a model with absolutely broken margins. Listen, I'm not saying Elon Musk committed securities fraud by making these promises before raising this money, especially since as early as 2012. 00:30:01:06 - 00:30:14:07 Bennett Tomlin Elon said that Tesla would never need to raise money again. What I am saying is that I think Elon Musk should be investigated for securities fraud related to these promises that he made. Shortly before Tesla did this fundraise, Elon Musk sold Teslas as an investment. 00:30:14:24 - 00:30:20:01 Elon Musk And said, What is the net present value of Robotaxi? Probably on the order of a couple hundred thousand. 00:30:20:01 - 00:30:40:29 Bennett Tomlin Dollars, making financial promises more extravagant than most Ponzi schemes and claimed they were conservative years later, Full self-driving is nowhere to be seen. The cost of an entry level Tesla has gone up instead of down. There are zero robotaxis on the road, but the idea is forgotten, discarded, and that in itself proves what they were promising was not possible. 00:30:41:06 - 00:31:03:21 Bennett Tomlin Because if Elon could make as much as his model suggested, he would be doing it. Now, I want to emphasize that the problems with Elon go far beyond his inability to accurately assess full self-driving. He has promoted conspiracy theories, recommended people vote for insurrectionists. Should a deep lack of understanding about cryptocurrency. He destroyed one of my favorite websites and has been credibly accused by multiple people of sexual harassment. 00:31:03:29 - 00:31:29:23 Bennett Tomlin And Tesla has had repeated accusations of maintaining a racist workplace. Elon is a bad person, but he also blatantly lied about the financial returns from owning a Tesla and so far has experienced no consequences for those blatant lies. Thank you for tuning in and if you enjoyed this video then make sure to check out one of my other videos that feature Elon Musk, the one about his dad's emerald mine or the one about his Twitter purchase. 00:31:30:02 - 00:31:31:23 Bennett Tomlin Both are good. Thank you.
