Tesla's proof of robotaxi strength will be its ability to ramp, says DVX Ventures' Karim Bousta
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Los Angeles Times
28 minutes ago
- Los Angeles Times
Recent lawsuits put Tesla's self-driving technology on trial
This spring, Elon Musk announced he was leaving his role at the White House to refocus on Tesla amid falling vehicle sales and a brand reputation crisis. But as Musk works to turn Tesla around with a successful robotaxi venture, recent lawsuits have complicated his efforts and raised questions about the company's self-driving technology. Last month, the California Department of Motor Vehicles sued the company, alleging false advertising about its Autopilot and Full Self-Driving features and seeking to suspend sales of Teslas in the state. More bad news came this month when a Miami jury ruled that Tesla was partly responsible for a fatal crash involving its Autopilot system and must pay the victims $240 million. Though Tesla has previously faced similar suits, this one was the first to reach a jury verdict and not be settled out of court. The case could open the door to further claims against the company, experts said. 'If and when the dam breaks, and they get held liable, Tesla could be in a lot of financial trouble,' said Carnegie Mellon University engineering professor Raj Rajkumar, who specializes in autonomous driving. Meanwhile, Tesla shareholders have been growing restless. A few days after the Miami verdict, a shareholder lawsuit accused Musk of inflating the company's stock by exaggerating the readiness of its robotaxi program, which launched this summer in Austin, Texas, where the company is headquartered. Tesla did not respond to a request for comment. Though some investors and bullish analysts maintain that Musk will eventually deliver on his promises, the cases have renewed questions about the tech mogul's credibility and whether he can perfect a technology that is key to the company's future. 'In Austin, the cars were clearly not as capable as Musk was claiming,' analyst Karl Brauer said. 'If he can't get the robotaxi working relatively quickly, it's going to be a problem for him.' The scrutiny comes at a pivotal moment for Tesla, which has seen shares fall nearly 12% since January and automotive revenues drop 16% in the second quarter from a year earlier. The company has been hindered by rising competition from rivals and brand damage triggered by Musk's role in the Trump administration. In Florida in 2019, George McGee had his Model S in Autopilot mode when the vehicle ran off the road and failed to stop before striking a young couple out stargazing. The crash killed 22-year-old Naibel Benavides Leon and seriously injured her boyfriend. McGee had been distracted by his cellphone and put too much trust in the Autopilot system to safely drive the car, he said. Evidence presented at trial showed that McGee was not engaged in driving for at least 20 seconds before the crash. This month, the Miami jury found Tesla partly responsible for the accident, concluding that Tesla and Musk misled consumers about the capabilities of Autopilot. 'Years prior to this accident, Elon was in the public eye saying that this technology is safer than a human driver,' prosecuting attorney Doug Eaton said in an interview. 'The consumer expectation is based on the manner in which the car is marketed. Elon sold a car that didn't exist.' McGee was overly reliant on Autopilot to avoid disaster because of false claims Musk has made about the technology, some dating back a decade, attorneys argued in the trial. Speaking at an artificial intelligence conference in 2015, Musk said he viewed autonomous driving as a 'solved problem.' Despite those claims, Autopilot is classified as a driver assistance system, not a self-driving system. It cannot be used without the supervision of a human driver. 'The ordinary consumer expected this system to do a lot more than it could or did do, because of the way that Tesla marketed this technology and the way Elon Musk spoke about this technology,' said Adam Boumel, another attorney representing the victims. In a statement, Tesla said that the verdict was wrong and that the vehicle was not to blame because the driver 'admitted and accepted responsibility' for the accident. The most recent lawsuit filed against Musk by Tesla shareholders specifically concerns the robotaxis in Austin, which rely on technology derived from Autopilot. Filed in Texas by Denise Morand and on behalf of other shareholders on Aug. 4, the suit accuses Tesla and Musk of making 'materially false and misleading statements regarding the company's business, operations, and prospects.' Tesla Chief Financial Officer Vaibhav Taneja and his predecessor Zachary Kirkhorn are also listed as defendants. 'Tesla overstated the effectiveness of its autonomous driving technology' and downplayed the risk that the robotaxi would operate dangerously, the complaint said. 'Accordingly, Tesla's business and/or financial prospects were overstated.' Tesla's robotaxi rollout in Austin has been riddled with glitches, including instances of the vehicles violating traffic laws and even driving into oncoming traffic. For his part, Musk has dismissed the shareholder claims. He responded to the lawsuit on X, saying it was likely not filed by real investors but by class-action lawyers 'grifting for their percentage of the verdict.' Investors should know by now that Musk often makes ambitious and unrealistic claims, said William Riggs, director of the Autonomous Vehicles and the City Initiative at the University of San Francisco. But the world's richest man has also made leaps forward in vehicle electrification, space exploration and other frontiers, and can't be underestimated. 'He does these kinds of aggressive, radical things,' Riggs said of Musk. 'Sometimes, he surprises us all.' The recent litigation has shined a light on both the perils and potential of Tesla's autonomous driving technology. Tesla has rolled out multiple systems using versions of its self-driving tech, including Autopilot and a purportedly more advanced Full Self-Driving mode. It's unclear whether Full Self-Driving is powering the robotaxis in Austin, or whether it will be used in Musk's promised Cybercab. According to engineers, Tesla's technology qualifies as Level 2 automation, based on a five-level scale established by the National Highway Traffic Safety Administration. At Level 2, the driver is fully responsible for controlling the vehicle while receiving continuous automated assistance in steering, acceleration and braking. Tesla's robotaxis in Austin are not permitted to operate without a safety driver in the front passenger seat who can stop the vehicle in case of emergency. 'The quality of the performance of the vehicle is not that great,' Riggs said. 'It'll be a while before the performance level gets to the performance level of a Waymo or even that of a Cruise,' he said. Cruise, General Motors' robotaxi effort, suspended all operations in 2023 after one of its vehicles struck a pedestrian in San Francisco and dragged her 20 feet. Riggs predicted it could take two to five years for Tesla to launch a safe fleet of self-drivng taxis, though Musk has indicated that it's right around the corner. Tesla's autonomous technology is behind those of its rivals partly because Musk wants to forgo expensive hardware used in other self-driving cars, said Rajkumar, of Carnegie Mellon University. Waymo vehicles are built with a type of laser radar called lidar, as well as cameras, sonar and GPS. Musk is taking a software-based approach reliant on cameras and artificial intelligence alone. 'We know that AI is not perfect,' Rajkumar said. 'When you have an imperfect system on which people's lives depend, things will go wrong.'
Business Insider
29 minutes ago
- Business Insider
I started one of the largest Tesla clubs in the US. Here's why I believe in Elon Musk and his vision.
This as-told-to essay is based on a conversation with John Stringer, a Bay Area resident who started Tesla Owners of Silicon Valley. It has been edited for length and clarity. I was first exposed to Tesla back in 2018. Traffic in the Bay Area is horrendous. At the time, I was driving about two hours a day in my Toyota Scion from San Jose to San Mateo, and it was just painful. You're working at a stressful job, but you're already wound up by the time you get in the car because you have to deal with idiotic drivers. My goal was to get an electric vehicle because it would give me access to the carpool lane and the EV tax credit. That's when my wife told me about Tesla. I started to look into the company, and my friend allowed me to drive his Model 3. After experiencing Autopilot, I just knew: This is the future. A Tesla would drive for me 90% of my commute so that I could relax and enjoy the journey. And to see how the app was integrated into the car and how the vehicle communicated with my phone and vice versa, I saw how Tesla was a software-first company. In 2018, there was no car even close to the integration of the software that Tesla had. And then to have the side mirrors collapse as you walk away from the car — it just kind of felt James Bond-ish. It was a no-brainer. It was like it would be dumb for me not to make the move. My first Tesla was a metallic silver Model 3, long range. Tesla Owners of Silicon Valley is born After I bought the car, I got on Twitter in July of 2018 to connect with other owners. One of the most powerful things about Twitter, now X, is that stuff breaks there, and it's kind of like the world's discourse. I started to see all these insane articles about Tesla, and I thought, "I drive the car. That's not true." You see all this insane amount of hate, so you're like, "Okay, how do you not jump on board and really just help tell the story of what this company is?" In October 2018, I started the Silicon Valley chapter of the Tesla Owners program — a community of Tesla owners that's officially partnered with the company. One requirement for Tesla to officially recognize your club is to get 25 VINs. So, I literally went to my neighbors and friends to start the club. The mission is obviously aligned with Tesla's, just building awareness of sustainability. But also community building. Today, we have about 6,000 members. We have also partnered with some of the other clubs in Northern California, for an overall umbrella of 10,000 in the region. We're the largest Tesla club in North America, but we also have the largest digital presence of any Tesla group. Our social media channels have two and a half million followers. We've also conducted three interviews with Elon Musk for a total of six and a half hours—not that anyone's counting. In a lot of ways, we've become the global voice of the Tesla community. A lot of our members are environmentally-friendly people, tech enthusiasts, and early adopters who want to drive the best tech. Some of our original members were Model S and X owners, who paved the way for Model 3 owners. And then we have a plethora of members who are on the younger side who came in with the more affordable Model 3. A lot of our members are also Democrats. You will have some people who are not as involved and are not fans of the things Elon Musk is doing in politics. It's been insane to see the left attack their own base. To say that our group is a MAGA group would be ridiculous. Around 2019, I also started to invest in Tesla for all the reasons I first bought the car, and for the safety aspect that I discovered later. The fact that my car is recording 24/7 saved me from a hit and run a year after I bought my car. I can't believe I was just involved in a hit and run. Person must have been drunk and I doubt I can get the license plate. I am so thankful I was in a @tesla @elonmusk that barely moved when this drunk driver hit me. So glad my son and I are safe. — Tesla Owners Silicon Valley (@teslaownersSV) July 5, 2019 To believe in Tesla is to believe in Elon For me, to believe in Tesla is to also be excited about what Elon Musk is doing for the company and what he brings to the table. If I'm an investor in Tesla and I'm not a fan of Elon Musk, I'm probably going to get out. Why would you put your money into the guy who's driving the ship? So, for me, where Tesla's headed and what Elon's doing are pretty tied together. When you get someone like Elon, there's a whole ecosystem that comes with it — a network of people who will come and work for his company and an opportunity to work with the brightest person, entrepreneur, and engineer of our lifetime. It's super exciting to think about where the company is today and where it's going — the humanoid robots, the robotaxis. Elon also made these great products by receiving feedback from the Tesla community. We're not an echo chamber. Why would we be sitting here shilling the biggest, richest man in the world? He's not paying us. Has he been way too optimistic about when Full Self-Driving is going to be here? 100%. But I was the first public beta tester for FSD, so I knew it was going to be a growing process. Elon's a visionary. The dude sees 10 years into the future, and he thinks things could be done in a week. He's probably oversimplifying problems. But I've been in the same room with him for four hours in Austin and have done two virtual interviews with him. I've literally seen this guy do math and solve problems in his brain in real time. But I also don't need to prove anything about Elon to anybody. Just look at the results. He created a trillion-dollar company.
Business Insider
3 hours ago
- Business Insider
Grok's Various Role-Play Personalities Have Been Exposed Publicly
Several of the internal system prompts used by xAI's Grok chatbot have been exposed publicly through its website. Interestingly, these leaked prompts provide insight into how Grok was designed to role-play various personalities, including one labeled as a 'crazy conspiracist,' which appears to nudge users toward believing ideas like the existence of a global secret cabal. TechCrunch confirmed this exposure after it was first reported by 404 Media. Other personas include Ani, a romantic anime-style character who is described as nerdy beneath her edgy appearance. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. It is worth noting that this comes after a failed partnership between Elon Musk's xAI and the U.S. government. The deal collapsed after Grok went off-script with a disturbing rant about 'MechaHitler.' Around the same time, Meta (META) faced its own backlash when internal chatbot guidelines were leaked that showed its AI could engage in romantic conversations with minors. While Grok offers relatively standard roles like a therapist or homework assistant, the inclusion of oddball personas like the 'unhinged comedian' and 'crazy conspiracist' has raised concerns about the team's priorities and safety practices. Adding to the criticism, previously leaked prompts show that Grok sometimes uses Musk's own posts as a guide when answering controversial questions. Indeed, Musk himself has posted conspiratorial content on X and has reinstated previously banned accounts like Infowars and Alex Jones. As a result, these patterns suggest that the content and tone of Grok's AI may be closely aligned with Musk's personal views. What Is the Prediction for Tesla Stock? When it comes to Elon Musk's companies, most of them are privately held. However, retail investors can invest in his most popular company, Tesla (TSLA). Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 14 Buys, 15 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSLA price target of $307.23 per share implies 8.5% downside risk.
