Ep7. The Great IPO Debate, Tesla Robotaxi v Uber, Tech Check | BG2 with Bill Gurley & Brad Gerstner
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- Опубліковано 5 сер 2024
- Open Source bi-weekly convo w/ Bill Gurley and Brad Gerstner on all things tech, markets, investing & capitalism. This week, they discuss The Great IPO Debate, Tesla Robotaxi vs. Uber, and a Tech Check. Enjoy another episode of Bg2.
Timestamps:
00:00 Introduction + Eclipse
01:56 The Great IPO Debate
41:33 Tesla Robotaxi vs. Uber
01:10:27 Market Check
Available on Apple, Spotify, www.bg2pod.com
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Brad Gerstner @altcap / altcap
Bill Gurley @bgurley / bgurley
BG2 Pod @bg2pod / bg2pod
#BillGurley #BradGerstner #Bg2Pod - Наука та технологія
Taking a shot every time Brad says 'I recently spoke to the ceo of a major company'
😂😂😂
Oh wait I missed to attach a disclaimer that this not medical advice. And before you’re wasted now regularly on thursdays already. Please consult a medical professional.
Or „large insurance investors in the mid-west“ 😂
It’s crazy that this was supposed to be what all in was, well done y’all provide some real value
It's incredible how good this podcast is compared to others that try to business centric as well. The level of information and insight you all provide is extremely educational. Thank you and please keep these coming.
Love the Pod, you guys should consider adding the articles that are being discussed within the show notes.
Up this
Please continue with the graphs and market checks. Its so valuable and inaccessible for retail investors. Btw its funny to think that there are relatively few views on the pod but its likely the highest CEO or net worth to viewer ratio of any podcast.
I always get a big smile when these guys drop an episode. I'm nowhere near their circle but it's such insightful content each time. Thanks Brad(s)!
Distance from their 'circle' makes it more valuable.
Best new channel I've seen in a while.
The costs for a Tesla EV Robotaxi service, the cost to produce the EV will be lower than a typical Uber car, fueling costs will be lower, and labor costs will be lower.
No way. There's waaaay too many people who enjoy Ubering and would probably do it for next to nothing.
Love this pod so many hidden gems dropped and just pure business tech talk. Superior to the All-in pod.
Loving the new pod guys thanks from Canada!
great podcast! thank you guys so much. Looking forward to the next!.
Love the chat, this podcast is a hidden gem
Former insurance underwriter here- the cost for insurance on Teslas are double-triple normal cars because they are cast as all one piece, so bending the frame on the front bumper could be a total loss instead of a bumper replacement. Also consider that theres a massive increase for healthcare costs, texting and driving, as well as legal costs accelerating
But Tesla will do the insurance .
@@EvEvangelist the economics are still the same if its Tesla writing the checks or Liberty Mutual. $3000 fender benders turn into $40k totals if the frame or battery gets damaged in any way.
This seems to be a common misconception. None of the cars are single cast.
Model 3, S and X are built the traditional way, while Model Y and Cybertruck have Gigacastings, meaning 3 large castings. Each can be replaced individually or even partially (as per the manual).
The cost should be the same, since a crash that has enough force to structurally affect any of the large castings would always lead to a total write off anyway.
The battery is a problem for every EV, that is not Tesla specific. Replacing it currently costs 10-12k $, so should not be a total loss in most cases.
I can't comment on US rates, but in Germany the cars are comparable to Mercedes, BMW or Audi, sometimes cheaper, especially considering the power.
@@theipc-twizzt2789 just telling you what the claims files and adjusters have told us. Aka direct source knowledge
FSD is now so good, that I mainly disengage it for the purpose of nuance edge-cases such as _pothole dodging, smoother offramp operations etc etc_ . I can't imagine being without FSD when my free trial is over. I'll likely subscribe.
This us such a better pod than all-in
I think both are good in different ways.
They need to sack Sacks and All In would be significantly better. Strawman arguments kill the vibe.
@@SahajSingh he's playing you
Best investor channel! Love the analysis on each topic. 😁😄😃
Another fantastic Pod, a great discussion about timing and factors to consider for companies to go Public and the factors that give them the option to stay private for longer.
Great show, very informative !!!
Love these guys for high signal to noise ratio vs all the other ins
You guys are great.
Just tried FSD in my new model 3 , WOW very impressive !!!!
How many curbs has the car hit so far?
@@nicholas5396 LOLOL It does come close but none so far.
@@rollie5579 good to hear! The internet made it sound like it's happening to everyone.
Great stuff as always
An idea I have is when the cars don't have human customers in non-peak hour places like ups and FedEx could use them for business deliveries or maybe last mile delivering from big warehouses.
You guys are a breath of fresh air compared to the political trash that All-In has come. Thanks guys.
Look at the last episode of all in that didn’t have Jason as moderator. Trump derangement syndrome is annoying old news.
Yeah but talking about tesla is also a snoooze fest zZzZzzZzzzzzz
@@icecoldfroste except for long term Tesla investors.
amazing pod
Wait a minute, you directly jumped into the details of bootstrapping Tesla Robotaxi.
But does it mean you have great confidence that FSD can become quickly “Unsupervised”?
It doesn’t seem so clear to me yet!
Great show, thx.
How do you feel 2 weeks later?
@Brad & @Bill It would be great to hear your perspective on Tesla, Meta and Amazon earnings report happening this and next week.
In terms of the usage patterns of Uber being the same for Tesla robotaxi, I think one factor you are forgetting is package delivery.
Right now this is done during normal working hours but this could be done during the night by a robotaxi + teslabot combo using excess capacity of road networks & vehicle networks.
Also when people can travel long distances very cheaply if they do it within a certain time window this will increase demand in less popular time windows.
I think Tampa will be near the top of the list of the first cities to allow the CyberCab.
Pretty stable weather year round and already used as a testing location for autonomous. One of the highways is regularly closed down in one direction and used for autonomous testing.
❤❤❤ THANK YOU ❤❤❤
Right on guys!
Great pod! Few questions
Q1: Could private companies with successful cash flow buyback for LPs? Vs needing another round or public offering?
Q2: as small investor I wish I had access to invest in spacex for example. Curious thoughts deeper on this topic like what reg needs to change to provide more innovation in that space?
Huge value delivered here by the "B"s. Stuff that I don't get elsewhere.
sweet another one !!!
I predict 2 years from now we still wont have tesla robo taxis...
Question who wants a robotaxi that the owner has an unbreakable call on the car but mostly the owner wants the car to be robotaxiing and earning money? An Uber driver who sits at home while his high value car does the work?
LPs can also sell their Fund stakes (which hold the underlying positions) in the Secondary market for liquidity as well
On the expense side, if you are rearchitecting the same code base 4th, 5th time, it better be good enough that future investments are diminishing returns. In that sense, expense would come down. Expenses are often overlooked when company is very profitable and macro growth was very healthy. I was at a big tech and our largest competitor has 1/5 the operating/r&d cost for the past 20 years. Investers never asked a question until the business ran into challenges. We ended up with 15% layoff but in reality, lost close to 50% and talents just retired/semi-retired.
Surely robotaxis can work a lot more hours than an uber driver or a trucker? Maybe as many as 16 hours a day rather than 8? So wouldn't that dramatically increase revenue per car?
Moreover in terms of demand spiking if there's a lot of empty robotaxis offering discounted rides in the middle of the day that might start to bring out more demand in that period.
They still need charging and demand. The surge hours with Uber and Lyft show you the demand people have for a ride. The demand isn't there 24/7 even if the cars could be.
BG2 Bump
Could you discuss on one of your future call programs the difference between Teslas for service driving and nvidias driving technology
Would limiting pension from investing too much in private markets (or at all) be a possible solution?
I heard there’s a fellow who is the world’s best shit talker. Y’all should bring him on.
Valuable breakdown on Tesla robotaxi it is a possible new source of revenue growth for the company. Could be Tesla’s iPhone 📱 (or not) If u betting on it you gotta have the patience and stomach to wait 10 years to see it pan out. Imo tsla is oversold rn and the risk reward is more favorable
I love how much Bill moves when he's speaking. It's like his body is thinking too.
It happened to us as well that the clouds parted for the eclipse!
I think you failed to take into account the cost per mile of Tesla robotaxi. It'll be so cheap, it'll end bus services. More people will use them because they're so cheap and so practical and convenient.
Does your cost per mile include the maintenance of the vehicle. More riders more mess. Can you imagine getting into a cab that hasn't been cleaned after 10 riders?
Look into EVs and tires. But hey, fun problems when the future is moving fast.
@@jeffossola668I don’t think Uber drivers are constantly cleaning. Teslas will probably have cameras and they can charge a cleaning fee to riders if they get messy.
@stoor79 Uber drivers get rated so they have incentives to keep tidy. If some jackwagon pukes or craps in the robotaxi and you get it next then what? There are so many potential problems with full autonomous that I don't expect it to be more than a side show for awhile. Just my opinion though
Sharing economy throwback
It's not as simple as having the most driving data. This is something that Cathie Wood gets wrong consistently. Nvidia not only sells the GPUs that everyone wants - including Tesla - but also a complete system for autonomous driving and robotics. A lot of the training can be done virtually.
To your discussion about autonomous fleet average and peak demand problem: Elon answered it in the earnings call: the car will do computation while it's sitting around.
I trust them that they can actually program and use such capability and make a little money.
I don't think that others will be able to, if they are not as vertically integrated as tesla.
Can you talk about the possibility of using the cars as distributed virtual power plants while not being used? Tesla seems to be the one company that could meaningfully leverage that
Do you know how much the Tesla app sucks for just basic stuff??? Like I can’t imagine them being able to manage an on demand fleet, they would have to partner with Lyft or Uber.
Can someone explain even if Tesla robotaxi does happen in the timeline elon says (which he never meets those), where the path to profitability is for that? Uber took forever to turn a profit and they dont pay any expenditure on the cars nor depreciation of the cars, waymo and cruise both are hugely unprofitable at the moment, so how does this not hecome a sinking hole of r&d with little to no payoff. Im not saying im right, literally asking what am i missing in this thesis (and the idea that people are going to rent their taxis out while sleeping doesnt hold as much water when you realize you get your car back full of puke and spilled coffee). EDIT: I wrote the above before finishing the episode. Great analysis guys.
Can you guys talk about Rubrik IPO? and why they just issue 20M shares I don't get it seems very few number of shares
In a previous interview EM said robotaxi would eventually be cheaper that the bus/subway. He doesn't just throw numbers without calculating the feasibility. If they can in fact get to low single digits for rides I don't see how Uber can compete with that.
Bill is 100% correct
the idea that Tesla can finance in 5.5% prime environment a fleet of millions of cars needed to meet at peak demand is absurd
the cost would be $100s billions
vs. what Uber already does. What does Tesla or anyone else offer.
Who is paying for the fleet of millions of cars plus all the support infrastructure in a 100 markets to make this even meaningful to topline vs a MVP/POC
Insurance is regulated at a state level not national level and nothing is going to change that
good luck with large scale self insurance, that requires massive ReInsurance of $10s billions a year
This is a product seeking a solution vs. a solution needing a product
Very lucid and well said! Fish comment I've seen that isn't Kool aid drunk pie in the sky analysis of robo taxi revenue.
First?! What a winner I am.
🤡
getting to hear you go deep, for free, priceless
"Go public early so we can make money"
what headphones is Bill G wearing? the Decibullz?
About Deterministic Models (min 48) you shouldn’t think about Models if you require Planning. What you build is a system on top of the Model, that system (Agents they are called) have determinism, IF-then code, and most importantly,Memory . Technology can achieve this today, it can be done
the lack of politics and geopolitics is a breath of fresh air, unlike other pods...
The best companies are not worried of quarterly pressure and scruteny etc as much as the not as good ones.
I’ve been thinking the same way about FSD in China as Mr Gurley, especially considering the odds of THIS government being collaborative or supportive to Tesla 😂.
Robotaxis aren’t safer than human drivers: they just have different risk profiles.
Shifting the risk from individuals to a collective system doesn’t remove the risk - it just hides it.
Of course we hate when individuals make bad driving decisions and cause harm. However there probably will be very little appetite for a fleet of robotaxis that all crash at the same time because of a bit-error or lighting anomaly (eclipse that was never part of the training set) that screws up object-detection across a city.
The concern about the lack of retail investor exposure to emerging technology companies through the public market is way overdone. The best companies usually go public and others end up as part of a larger tech company. Companies go public when the prices are attractive to the investors that are selling their shares to the public. VC firms love a sellers market with very high valuations.
The price of used and new cars have spiked since Covid. Additionally the labor costs for repair has spiked due to wage inflation. Those are significant factors driving insurance rates.
Wanna call out how often Brad name drops Nvidia as he is invested in that stock. Goes out of his way to mention it in any topic. How this or that was trained using H100. We get it by now man.
I have a 2023MY and still no FSD trial. I was told software 2024.8 still doesn’t have it. Gotta imagine this is a good chunk of teslas on the road.
I read it's about 12% of Teslas, and it should be addressed by the end of this week.
Sorry to hear you have to wait. Think you'll love v12 when it's released on the 2024.8 branch. I enjoy supervising 12.3.4 on 2022MY and 2024M3 Refresh.
Much better than the hokey luv ❤ fest the pod has become. (You guys need to get out of your billionaire mindset and add the perspective of your audience income level as well)
This is great, its what the All In pod used to be like!
Imo people aren't being realistic w.r.t. fsd. Lots of improvement but there are all sorts of alligators that are remaining in that "last X %" that Tesla hasn't resolved.
This its no where near being ready.
Tesla lacks the real world driving data in other countries to make them feasible for initial deployment of Robotaxis. The edge cases, driving behavior of the citizens, and rules of the road are very different throughout the world than in the USA. Even Canada and Europe would be difficult to deploy Tesla Robotaxis because of lack of data.
If YOU travel to another country, can you drive?
.
You have the *skill* ... Maybe not the local *knowledge*
.
If the *SKILL* can be transferred from the existing fleet, and the "other country" has cars currently being driven, learning in shadow mode, gaining the *KNOWLEDGE* of local variations ("edge / corner cases") That puts Tesla at the "before the USA free month" stage in one sense, but the *SKILL* set of the fleet will be at a far higher level when introduced.
@@rogerstarkey5390 When you travel to most countries, you can drive, but you need to learn the rules or you might get fined or banned from driving. I heard in some European countries, it is against the law to cross any solid line, regardless of the situation. FSD trained on USA roads know that a solid white or yellow line can be crossed especially for improperly marked roads or when you need to make a turn. In some developing countries, the rules of the road are just suggestions or recommendations. In the Dominican Republic, motorcycles pass on both sides of your car at the same time. They come so close to your car and sometimes even make contact. The drive the wrong way down one way streets. Cars go through red lights all of the time if no cars are crossing the intersection. There are intersections that lack traffic lights. During rush hour, if you want to cross the intersection, you need to slowly creep out to block one lane of traffic, then the next lane, the the third lane in order to cross the street. If you are timid, you will never cross the street and all the cars behind you will hate you and may provoke violence.
In Nicaragua, they just slow down at night when approaching a red light and if they see no cars crossing, they go right on through the red light. In city of Managua Nicaragua, many streets still have stop signs in addition to traffic lights! I imagine they keep the stop signs because of the frequent malfunctioning or power failures of the traffic lights. What would FSD do if it saw a green traffic light and a stop sign at the same intersection? In the North America and Europe, where we would have three lanes of traffic, Asian countries might have five lanes.
The best case scenario for Tesla is to acquire Lyft and integrate their so called Robotaxi into it. This should immediately tank Uber by 10 to 15%
All delivery services fit the model for Tesla maybe with an Optimus delivery from car to front porch
telsa is in the insurance biz now
Sell premium on assets under management but just roll if over I always price um way outta money
Remember that Tesla doesn’t allow people to buy out their lease. All leases are returned to Tesla which would give them some of the extra vehicles needed for peek use.
"building for average or peak conundrum"
Only cars with sufficient charge could participate in robotaxi. How will punctures and breakdowns be handled? What if another car hits Tesla owners car participating in robotaxi fleet? What if somebody leaves something in car, ie lost property? What if somebody damages interior of car? Are pets allowed? The list of issues goes on
At night when robotaxis not busy where are they going to park? Who is going to service them? Who is going to charge them?
Fewer miles driven = less traffic = higher speed = higher accident rate and more severe accidents
Micro2Macro put out an idea that Tesla would be well placed to offer existing rideshare drivers reduced fsd and insurance costs to accelerate uptake.
I would have thought you two knew more about the economics of robotaxi. Your demand curve assumptions are too low since price elasticity is high on these. More and more people will not own a car and rely only on robotaxi. The demand and utilization can 100x from current rideshare which changes the unit economics of Tesla owning its own fleet. Several other things missing on your robotaxi model. Good discussion on regulation and love the pod.
What authority do you have it that in the USA people will stop buying cars to just utilize a robo taxi? That hasn't proven true with ride shares or regular taxis or any other mass transit
@@nicholas5396 lots of people in cities don’t own cars due to cost (gas, parking, etc). If 70% of cost of Uber driving is the driver and that gets removed, total cost will be down significantly which means price can come down for a ride. Are you saying more people won’t use rideshare instead of owning a car if price is 50% cheaper?
People have a hard time giving up the privacy of owning their own vehicle and using a form of public transportation. There's no really good model for the tesla robotaxi, especially with so few details.
@@TriEarth96That is exactly why the Robotaxi case is so compelling.
You get to keep all the advantages of owning a car (no public transport, privacy, availability), and none of the disadvantages of actually owning it.
That and the cheaper cost per mile should massively increase utilization.
@spencerkuhn this is true in really big cities with people who don't go outside the city often or commute to work. But I dare you to watch the traffic leaving, Chicago, LA, Boston, Atlanta, etc, etc every morning heading for jobs outside of the city. It's a massive number. I still don't think people assumptions are going to play out they way the Cathie Woods of the world belive it will. Lastly people that own expensive cars aren't going to line up in droves to have strangers puke and spill their coffee in them only to find them dirty and ruined the next time they get in it for work. Just my guess though.
A question for you regarding Musk's wanting a 25% voting control and how Tesla might arrange that. Is it possible/probable that Tesla would/could buy back something like 328.848 million shares? That would reduce the number of outstanding share from 3.19 billion shares to approximately 2.862 billion shares and since Musk has 715,022,706 shares and options that would raise his ownership to about 25%.
Patterns of Driving HAVE NOT returned to pre COVID levels.... There's way more cars on the road now than before the Pandemic, ridership on public transit continues to be very low.... What else are you wrong about?
What happened with LTSE? Why aren’t they playing the role of the “four horsemen” to help startups go public? It seemed like they were going to be positioned to do things like that.
“Little guy” “retail investor” “mom and pop” are your audience.
How does this explain all of the Chinese IPOs or biotech companies that make way less revenue?
Tesla should target Turo hosts as their initial suppliers of this robotaxi service. They already are using their Teslas in a commercial capacity.
Tesla killed Hertz resale value by using price elasticity to address waning demand due to high interest rates rather than reducing production.
They also killed my car's resale value. Good thing I bought it for keeps.
They hold a lot of Uber don't they?
The hardware capital Cost depreciation of the dedicated Robotaxi is based on 1m miles longevity per Elon
The cost of the Customer owned Robotaxi is ………
I agree about the insurance for Robotaxis. We are more accepting of our own fallibilities. We accept that we aren’t perfect and never will be. Machines, on the other hand are subjected to a much higher standard by people. When machines fail we are less forgiving, especially for machines that are extremely disruptive and have destroyed millions of jobs. Juries will award much higher settlements from deaths caused by a Robotaxi than a drunk driver.
Bill please sit still!
Insurance is regulated at the state level
Why not have Tesla drivers build their own fleet of robotaxis and go head to head with Uber?
Is that a toupee? Need to bring it down quite a bit.
Despite increased auto deaths during covid, the overall mortality rate in the USA did not increase. What does that tell us about the reality of our _Made for TV pandemic?_
Burned through stimmy checks!?! It was $2k given over a 12 month period!!!
Would you be willing to turn your car into a taxi and have multiple strangers ride in it each day?
Given how pessimistic Gerstner is about Google, but optimistic in the Gen AI wave, I'm surprised they didn't cover the recent Apple and Google partnership...