Nikola: How to Parlay an Ocean of Lies into a Partnership with GM
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* orbit
So in practical terms, Shuttle might have actually held back reusable rocket use more than advanced it. Fantastic achievement, though, and really not too bad economically when you consider all of its capabilities (only a fraction of which were used for any given mission, though).
Oh, the thing that had to be essentially refurbished before being able to fly again?
(Though I forgot that they also refurbed the SRBs. I think the SSMEs are more impressive, they got 19 uses out of one of them.)
Fair enough.
I suppose typing the whole thing out:
"SpaceX is the first company to launch a rocket to orbit and land its first stage"
is the most accurate way to phrase it. I was just trying to acknowledge companies like Blue Origin and Virgin Galactic, who have landed rockets or parts thereof before SpaceX.
The big difference, however, is that those efforts have been essentially economically meaningless, whereas SpaceX's efforts have been quite impactful.
The Motte: Elon Musk is great at hiring engineers.
There's something to be said about the value of setting wildly unachievable goals. It takes you further than you might have thought possible.
Of course in the media it was all like 'Elon rides in on spaceship and promises to build submarine to save everybody'. And we don't know if it 'didn't work' as it was not tried, because the smallest kid was eventually brought threw with the same methods.
The whole point here is that Elon wanted to help but clearly he couldn't help with diving, so with a team of engineers they tried to work on a small part of the problem. Only to then get shit on relentlessly for working something out of the box.
It was similar to when everybody was shitting on Elon because apparently he delivered the wrong products to help with Covid. Later turned out that Tesla had excellent contact with doctors in China because of their production facilities in China and focused on delivering what doctors in China told them was useful.
All in all there is no way around it, Elon has started many successful companies and pretty much all of them have done some or many impressive things. Very often with the experts in the field claiming his plans were impossible or buissness suicide. He might say something wrong once in a while, but you better actually listen what exactly he is saying and why, before dismissing it claiming he is just smelling his farts.
Nissan Leaf? Close to 1/2 million sold.
The Tesla Roadster was a radical re-thinking of the automobile -- an industry that had been stagnating for over 50 years -- and an all-in investment in electric vehicle future by an eccentric billionaire. Nowhere near as bold or life-or-death in either financial outlay or feature design.
Do a side-by-side feature comparison of the original Leaf and Roadster to see just how far apart the two were in thinking, design and ambition.
The Leaf was and is essentially the belief that Tesla's vehicles would be too expensive for the average customer so Nissan could ride Tesla's tailwind to sell a more affordable model. And they have, and that's fine.
But it boggles my mind when people imply that Nissan's efforts in electric vehicles are in any way a reasonable comparison to what Tesla has done.
Musk has a history of building and shipping successful products company after company in spite of a constant amount of people saying he would fail. (X.com, Paypal, Tesla, SpaceX, Neuralink, Boring).
Nikola is a complete fraud that collected money from know-nothing investors riding on EVs and Tesla's name. They haven't shipped anything and probably never will. Bizarrely positively portrayed in the press alongside negative Tesla stories - I imagine because it's good for clicks?
I find it hard to believe the SPAC that brought them public wasn't solely for the purpose of allowing them to steal as much as they could from the public before they shut down. No idea how well they played it - I guess we'll see if anyone ends up in prison.
At least he got to con his way into a fancy ranch in the mean time: https://www.latimes.com/business/real-estate/story/2019-11-1...
People like this make the world worse for the rest of us (and make it harder for honest startups to raise money).
Are complex, difficult, expensive products or services usually built and launched quickly? Do they occasionally require long cycles of iteration? Maybe the iPhone should have been thrown away at version one.
It's 2005, does the Falcon 9 exist yet? Geez, we're waiting. It's obviously all vaporware, a fraud, they could hardly launch the Falcon 1 without it exploding every time.
It's 2009, does the Model S exist yet? Geez, we're waiting. It's obviously all vaporware, a fraud, they'll never mass-manufacture electric vehicles.
(Some bold takes? Level 5 self driving cars the way we commonly envision it won’t ever come to fruition, SpaceX will never go to Mars, transhumanism will never come to pass, and hyperloops won’t either. You can come back in 5 years and gloat if I’m wrong.)
Doesn’t mean those goals won’t be achieved, even if they are late, tho.
If you want to minimize their obvious accomplishments based on Musk's own incredibly ambitious long-term (decades out) goals, feel free, but that's pretty dumb because it's essentially meaningless relative to the rest of the market. If ULA were already sending colony ships to Mars, maybe you'd have a point, but they aren't.
Sure. I agree.
> minimize their obvious accomplishments based on Musk's own incredibly ambitious long-term (decades out) goals
Outside of the Silicon Valley bubble, that’s called “holding people accountable to the goals they set.” And I’m happy to give him decades, he still won’t achieve transhumanism, Mars travel, and the like.
Setting extremely ambitious goals and trying your level best to achieve them is a virtue, not a vice. If you let some weird disdain for Silicon Valley (which is in fact a place/state of mind which I do not inhabit and whose culture I strongly dislike) rob you of your ability to get excited about great efforts toward building great things and/or solving great problems, that's nobody's problem but your own.
That only holds true up til the point where your loud (public) ambitious goals are the reason for ticket sales.
Once there is financial motive for setting ambitious goals, you lose credit for the ambition -- it becomes driven by profit.
SpaceX is literally taking queries for the sale of private Mars tickets[0].
I have a hard time considering the sale of tickets to a now-technologically-impossible-future-event that may be possibly hundreds of years away from our present time as altruistic.
If I made a website and sold tickets to the "Nicest place to sit and observe the apocalypse when it occurs." for hefty profits i'd be driven out of town. No way I could know where that might be or when it might occur; the entire premise is faulty.
A guy launches a rocket or two and suddenly his opinion, against the majority of the rest of science and engineering by the way, claims we're going to Mars soon.
Sure, he's more believable than some random person saying it, i'll give you that -- but the promise of Mars is something that I and many others consider to be so unlikely in the immediate future that we view the promise as akin to a lie or fraud; and Musk has done little to assuage the very real technical fears behind the mission other than with vagueties like "Well, it's an engineering challenge." or "We'll have to discover new ways of doing X".
Yes, that's true, new method and procedures will inevitably need to be developed -- but dismissing such feats as minor is not only in poor taste, but short-sighted when trying to plan a timeline for when these events may occur.
I think this shortsightedness is intentional, and for profit. He can claim the world, profit from it, and deliver very minimal results that are nothing compared to the promises.
You see this behavior over and over in the management of early Tesla, too.
Beyond that, I really just don't see the angle of Musk as a con man. He's a maniac—literally, manic—and that certainly comes through in the aggressive and sometimes unrealistic nature of the promises he makes, but accusing him of being somebody who would settle for delivering "very minimal results" just seems to ignore the reality of the man himself, both the personality traits he's clearly displayed (and I don't mean that in an entirely positive way) and more importantly the results he's already delivered. They are not "minimal". He's delivered unprecedented upstart success and unprecedented innovations at scale in two markets that have been dominated by incumbents essentially since their inception. That's not a man looking to spin a web of lies and hype and then cash out. In fact he seems to be in a very small class of extant business leaders who've actually done something worth talking about besides being very rich and overseeing incremental (valuable or not) progress.
You and "many others" are free to think whatever you want about the technology, and I'd probably agree with you to some extent on many points, but it kind of undermines your status as an impartial skeptic when you show so clearly that you have an axe to grind. And why? I really just don't get it. I would never work for Musk in his current form, and I don't own any products made by any of his companies, and I think he's guilty of treating some of his factory workers quite badly, but I give credit where credit's due and you should, too. It's not about endorsing him, what he stands for, how he treats workers, his opinions on COVID-19, or whatever else—it's simply about seeing the world clearly.
The only thing close to 'private Mars tickets' is the footer which says: "For inquiries about our private passenger program, contact sales@spacex.com". That sounds like a very generic "If your problem is having too much money, we can help!" kind of sales pitch.
> If I made a website and sold tickets to the "Nicest place to sit and observe the apocalypse when it occurs." for hefty profits i'd be driven out of town.
If you're a company that sells private bunkers and you have a page on your website about a possible apocalypse, then no one will fault you for having a generic "For inquiries about our private bunker program, contact sales@bunkerx.com" footer.
Becoming an inter-planetary species doesn't happen in a year.
I want SpaceX to succeed and they have a track record of execution such that I now believe they really can. I was hopeful before (and if you listen to Musk talk about it he didn't think they'd be able to really pull it off early on either but figured they'd at least make progress towards it even if they failed), but now I think a mars colony is a real possible outcome.
It's not a bold take to just state something is impossible until it happens, that's pretty much the default.
The bold take is to look at what might be possible and execute goals in pursuit of that.
For SpaceX this means reusable rocket technology to bring costs down (massive success here has them ahead of everyone else). Starlink as a revenue source is also a really good approach.
For Tesla it's the 'master plan' of roadster -> model s -> model 3, reinvesting in infrastructure and battery technology with vertical integration to build out superchargers and drive costs down. This has been massively successful and their EVs (particularly the model3/y) have no equal at any price point EV or gas. The level 5 autonomy was really a bonus on top of that EV transition that they've added to, and if anyone can pull it off it will be Andrej Karpathy and the fleet of Tesla's they can train with (https://www.youtube.com/watch?v=hx7BXih7zx8).
Bullshit and really big ideas can sound similar, but that doesn't mean they are - there's a lot of value in being able to tell the difference.
In the case of Nikola, they're just lying to enrich themselves and taking advantage of those that can't see the difference between a person like Trevor Milton and a person like Elon Musk.
But the point I’m making is more specific than that: you can’t call them successes because they haven’t achieved their goals yet. (But they haven’t failed yet, either. The jury is still out.)
As far as daylight between Musk and Milton, it's not a matter of degree, but one of kind.
Tesla and SpaceX have both achieved their original nearer term vehicles, Dragon/ F9/FH plus Model S, X, and 3. Full reuse and full autonomy currently are still out of reach, but both of those are incredibly ambitious that no one else is super close to doing, either.
Both Tesla and SpaceX are very successful, but of course Musk keeps raising the bar on what he considers success.
But you’ll have forgive me if I hold Musk to public promises he’s made, especially regarding self driving cars & Mars. At a certain point, what’s the difference between making a bold promise and telling a lie? It’s difficult to judge people’s intentions.
It’d be a lie if they weren’t taking steps necessary for that goal. It’s not a lie to have a large, even an unlikely, goal.
Starship, in particular, isn’t really needed for a conventional space business case. Falcon 9 is sufficient for that. Starship (as envisioned) is either too big or too reusable. The only thing it makes sense for is the grand, multi-generational vision.
But I'd say there's a greater than 50/50 chance of SpaceX landing people on Mars in Musk's lifetime. But that's not even THAT remarkable... Their actual goal (self-sustaining Mars civilization of at least a million people) is 5-6 orders of magnitude grander than that, and almost certainly won't occur in Musk's lifetime. Musk acknowledges that.
No. It makes them not-successful. Which also applies to SpaceX in that regard.
> Their actual goal (self-sustaining Mars civilization of at least a million people) is 5-6 orders of magnitude grander than that, and almost certainly won't occur in Musk's lifetime. Musk acknowledges that.
His stated goal is to do this by 2050. That’s within his lifetime (I hope).
(Responding to your claim elsewhere since reply isn't allowed there)
Incorrect. That's not Musk's stated goal. What he said was:
"Building 100 Starships/year gets to 1000 in 10 years or 100 megatons/year or maybe around 100k people per Earth-Mars orbital sync" - [0]
Nothing at all about having a million people on Mars in 2050. To get a million people to Mars requires ten Earth-Mar orbital syncs, or 20 years. Adding 10 years to get to that 1000 Starships/year cadence. That means they have to achieve 100 Starship/years by 2022 to have a shot at sending a million people to Mars by 2052 (because the next orbital sync is 2022)
Starship hasn't flown yet with the first orbital flight hopefully some time next year. It will be well into 2020s, at the earliest, to get to 100 starships/year production rate. Musk knows that and he didn't state otherwise.
[0] - https://twitter.com/elonmusk/status/1217989066181898240
SpaceX promises or goals or whatever are less egrigious. It's clearly providing a useful service (stuff to orbit for less money), but nobody is giving them a bunch of money today for a ride to Mars maybe later. Same with the Boring Company; it'll become egregious if they trick a municipality into paying for something, or leave an unfinished tunnel sitting around for years and years (but longer than the Seattle tunnel, cause even non-imaginary tunnel machines have problems)
Nothing bold about saying people won’t achieve goals and then disclaiming it saying people can gloat in 5 years if you’re wrong. That’s cowardly, the opposite of bold.
But you’re right on the other points —- I’m willing to extend the timeframe for self driving to 10 years and transhumanism to 20. And to be even bolder, I’ll let you pick a timeline for the Hyperloop.
SpaceX didn't lower Falcon 9 launch prices because the market is willing to pay their current price, but they sell something that costs them about $20M for $70M (competition's price is at $100M) and they sell something that costs them about $40M for $150M (competition's price is at $400M).
ULA (Boeing and Lockheed Martin partnership that used to have US monopoly) only exists today because the US federal government needs dissimilar redundancy, so that if something bad happens on a launch, the other provider's system can launch stuff while the first one is investigating and fixing the issue. Without this requirement, ULA would have been closed. Same for Boeing's CST-100. Same for Northrop Grumman's Antares and Cygnus. Same for Orbital's Dream Chaser. Boeing's SLS and LockMart's Orion cash cows will be shut down if Starship proves reliable.
Starship is much more speculative/ambitious and will require a bunch more iterations before they make it work. There will definitely be failures along the way, hopefully without loss of human life but that's not guaranteed. If they don't go bankrupt before they make it work, a fully rapidly reusable Starship (150 tons to orbit for just a few million bucks) will make all other rocket technology completely antiquated, 100x cheaper is too much to bear for national pride reasons.
But he's also no stranger to fraud, lies and defrauding investors. Solar roof is best example of that ([1] and [2] talk about it, but there's more stories about it).
Solar roof was 100% fake product, that was shown only to justify fraudulently bailing out his other insolvent business. Years later, Tesla still doesn't have solar roof product (they do some solar roof installation, of roof made by Changzhou Almaden, Chinese company [3]).
[1] https://ftalphaville.ft.com/2019/08/28/1566985766000/The-gre...
[2] https://arstechnica.com/tech-policy/2019/09/solarcity-was-in...
[3] https://www.pv-tech.org/news/changzhou-almaden-supplying-tes...
I'm not convinced any of this rises to fraud and none of it is close to what Nikola is doing here.
The solar roof also does exist and they install it, I'm not sure how that's fraud? https://www.tesla.com/solarroof because they buy parts from China?
Elon staged fake product presentation a month before the vote to gain support for the acquisition [1].
> Those shareholders should be happy now with the outcome of letting Musk do what he wants. > I'm not convinced any of this rises to fraud and none of it is close to what Nikola is doing here.
It's not a fraud because it worked? Same as Nikola - if they end up delivering some products in the end and their stock will keep on going up, then they it doesn't matter that they lie now?
> The solar roof also does exist and they install it, I'm not sure how that's fraud? https://www.tesla.com/solarroof because they buy parts from China?
Tesla still doesn't produce any type of solar roof, that was suppose to be their huge technological advantage. It's same as if Nikola instead of producing their vehicles will become dealership for Nissan Leaf.
Main difference between Nikola and Tesla now is that Tesla did deliver some products so far, but both companies are using hype and lies to gather funds and generate more hype. Given how much founding Nikola gathered so far, unless the whole EV bubble explodes, they'll also likely deliver some products.
[1] https://www.cnbc.com/2019/10/28/musk-deposition-stockholders...
> It's not a fraud because it worked?
It's not fraud because I don't buy your claim that it was a fake product presentation solely to gain acquisition support and the article you link doesn't even support that.
> Main difference between Nikola and Tesla now is that Tesla did deliver some products so far
"Some products" - they've sold hundreds of thousands of cars, built out a supercharging network, and a battery factory, while also making progress on autonomous driving at the same time. They were the first to prove this market against enormous odds and constant negative press.
Nikola has produced nothing but bullshit. I think the Tesla stock is crazy right now and I also think Elon's timelines are often unrealistic, but the amount of anti-elon anti-tesla sentiment in the face of success after success against enormous odds is wild to me.
"Shareholders also allege in the suit that Musk planned the unveiling of a product that didn’t yet function"
This allegation is based on what they already admitted to:
"Still, the company does acknowledge that the demos Musk unveiled at Universal Studios were not functional" [1]
> "Some products" - they've sold hundreds of thousands of cars, built out a supercharging network, and a battery factory, while also making progress on autonomous driving at the same time. They were the first to prove this market against enormous odds and constant negative press.
Tesla did a lot of good stuff, I'm not denying it, and they've made EV cars desirable for certain people. But it doesn't change the fact, that their operating mode is "fake it till you make it". And they sometimes do, often don't. They also "had" coast to coast self driving car since 2017, battery changing, alien dreadnought factory, with robots speed limited only by air resistance, panel gaps that are snake chargers, 620 miles range in 2017, 500k model 3 per year in Fremont, ventilators production, etc, etc.
> Nikola has produced nothing but bullshit. I think the Tesla stock is crazy right now and I also think Elon's timelines are often unrealistic, but the amount of anti-elon anti-tesla sentiment in the face of success after success against enormous odds is wild to me.
Because Elon and Tesla is massively overpromising. To point, that they're straight up lies.
Do they deliver some good stuff in the end, and have areas where they actually have technology advantage? Often they do, yeah. But that doesn't make up for the fact, that their business is build on hype and overselling their abilities in all the areas.
[1] https://www.fastcompany.com/40422084/inside-steel-pulse-the-...
If did a demo with that method while claiming that it's the real thing running on 100 servers already with thousands of users ... well, that would be fraud.
What Musk communicated (said, implied, gesticulated, telepathed) at that demo regarding Solar Roof? He mentions production process, implying that it's real. He talks a lot about an integrated future, blabla. Is it a concept unveiling like what automakers do each year that then becomes nothing? Well, not exactly after all they take deposits for it. But "obviously" it's dumb. Having so many small tiles just kills cost efficiency. (Because every tile basically has a panel and needs a small connector, makes roofing slower, etc.)
I'm fairly sympathetic to the claim that all these startups are big piles of BS .. but at the same time it's not like they are so different from what other companies pull off as business-as-usual. See Google's demos that then go nowhere. See how phone and laptop makers over-promise and then constantly under-deliver, let's say with regard to battery capacity and life. Or game companies releasing trailers and doing demos at E3 and then years later the product is nowhere near finished and eventually the finished looks much worse.
They have a number of installations in California that were done for real clients and are fully functional. It may not be viable or scalable, but it is absolutely not fake. It is an actual product that works.
"Still, the company does acknowledge that the demos Musk unveiled at Universal Studios were not functional"
(https://www.fastcompany.com/40422084/inside-steel-pulse-the-...)
Making the same claims of goals and taking the money and running? Fraud.
Some people are attracted to rich arrogance more than anything. It's why people pay money to read fluff piece autobiographies ghostwritten for billionaires. It's why people like martin shkreli still have strong fanbases on the internet. Tesla may be a good company, but good companies are not built by one person, and fanboys are usually blind to that fact.
1. Don't (permanently) run out of money
2. Get a bunch of capable people together and organized
3. Point them in a good direction
> 1. Don't (permanently) run out of money
> 2. Get a bunch of capable people together and organized
> By those measures, he's killed it repeatedly.
The problem with fraud and lies is not that they don't work. They work great. That's the entire reason people do them.
The problem is that they stop working after a while.
The dream scenario for fraudulent fundraising is that you make so much money with your pitch that you can make your lies a reality before too many people catch on.
As anyone who is familiar with kickstarter knows, it rarely works out that way.
So if any random startup with some guy/gal with some positive track record claims that they'll do X ... let's say Magic Leap claims they'll paint black, or Openwater claims they'll read minds without invasive surgery just with IR light and an ungodly amount of CT-like singal processing for image reconstruction (founded by Mary Lou Jepsen, who has pretty extensive "moonshot creds" by creating the Pixel Qi display, which I knew nothing about until recently), etc.
At what point this becomes fraud? Well, of course we know the moment the founder/employees/interested-parties start faking things that are not true. Yes, sure, but when does simply painting a rosy picture becomes Theranos-level scam? After all Theranos' founder convinced seemingly competent people when she was 19 old about something truly risky. How? Her father was a vice president at Enron. Also she had Stanford's name next to her. (She got Channing Robertson, her ex-advisor and dean of School of Engineering at Stanford, to back her idea in or before 2005.)
And all is well as long as the founder is truthful, even if he/she is extremely biased. (As in we'll make this work by next week. And next week they say they'll make it work next week. Repeat a thousand times. No problem, because being a maximally biased estimator is not in itself being untruthful. Even if it's an extreme sign of metacognitive defects.) The problem starts when the founder claims that something works in such and such way, but that's not actually the case.
I think even the very murky territory of not disclosing previous failures can be simply signs of bias. (As in I'm not telling you about how we fucked up the last twenty iterations of our magical product, because I think the tests were very bad, and you'd get a very unfair impression of our marvelous idea, so I'll just say we're working on it, and let you decide solely based on that.) Of course if you agree to report progress, you agree to keeping lab notes, but then you destroy them or purposefully stop writing notes, that's bad.
I don't know anything about Nikola, other than that they are pushing hydrogen fuel cells and battery powered vehicles, plus building their own water-splitter network along key routes.
From what I've heard recently Nikola just seems like straight up lies and fraud from trying to piggy back on the success of Tesla.
Neither are good, but one is much worse in my opinion.
True. But he also delivers on most of them. What I find most optimistic about his statements are basically the timeframes. Self-driving is taking longer than initially thought, and so is Mars. But there's been major progress across multiple (difficult) industries.
We can't compare him with the copycat company (not even the name is original!)
In my mind that either means he's stupid (not learning from his mistakes) or deceptive. Personally, I don't think he's stupid, so...
I always set unrealistic bars for myself. And in the end I get more from not reaching my goal than I would from reaching a lower one.
Nikola's product is the brand of being a hip, "with it" electric car company, like Tesla, but different, and they are selling it to GM. It's a simple straightforward win-win, and everything that looks like fakery is beside the point. It has solid value to GM precisely because of the inflated, arguably irrational value of Tesla.
Now, I'm not investing, but it did occur to me to look at it that way. They are not actually in the same business as Tesla or GM. They're laundering cool factor.
That is flat false, making a automotive battery out of laptop batteries was quite a technology development. They also made their own engines and inverters from the beginning.
> The CEO of Tesla is also well known to be untrustworthy with his promises
Actually the opposite, it is well known that when he says something its very likely going to happen. As most of the things he say, no matter how crazy to turn out to actually happen.
Arguable there is no other human alive in the world today, that when he say 'We are gone do X' that more people believe could actually do it.
> having even being formally investigated by the SEC for stock price manipulation.
He wasn't investigated for stock price manipulation, he was investigated for improper communication to stock holders.
> I don't know the future, but there is a possibility that they will also develop the needed technology to make it all work.
So even after 10 years of consistently laying every year, announcing dozens of technologies that all turn out to be totally fake you still think they can do it. That seems beyond utterly blue-eye to me.
I actually disagree with this take but it gets close to the problem with Trevor Milton. Trevor is very unpolished. I'm skeptical of how detailed he gets with all the in's and out's with the technologies he's trying to innovate and make more efficient. What's going for him is a few things, he's partnering with many companies which means he's mitigating the company's risk. Now that Musk created the market, others want to join in and try whatever route that sticks.
Musk on the other hand, speaks in more precise words when describing a topic. Musk does sell vaporware but...eventually (behind 'schedule') Musk delivers. This lazy focus on manifesting a specific vision what what Musk is doing. He'll let the entire engineering department go, if they aren't willing to work hard at making the future a reality.
Going full circle, the energy density of hydrogen fuel cell is the future. I don't see how it's not. All you need now is for Toyota to join forces with them and you'll have an unstoppable force that will help reduce emission drastically and at a large scale. The technology is very close (1, maybe 2 iterations away) and I doubt they are far away from a breakthrough. I don't believe Milton could've focused on Hydrogen semi's prior to the success of Tesla, he doesn't have that skill but...he's making due with what he's after. He's also being wise at selling electric trucks too because the market is primed for it (read: Musk primed it).
In conclusion, there are a lot of investors deep into Nikola. If Milton gets in the way of bringing this realistic engineering challenge to market, the investors will change it up. I'm not certain of how much voting say that Milton has but...it's a good sign that he stepped back from CEO role. He's way too sloppy with his words but...he brings the hype and investors are still wanting his hype. It's messy but nothing worth doing is ever blameless.
P.S. I don't own either stock. Nor any energy/battery/car/electric stocks. I'm just interested in advancing our technology.
Instead of advancing technology, they might have taken funding and credibility actual companies could have used.
The founder has so far answered just one real question on twitter, about what they were going to bring to the GM produced car: "100% a badger. We will use common parts for example; tires, window regulators, hvac, brakes & batteries to drive down cost, but the badger is completely a badger. The infotainment, displays, software, ota, app, cab, interior, user experience, sales, service, warranty etc is ours"
That's a long way to say they'll use their software and sales team.
Based on what? Just looking at the density is not enough. You have to look at the whole system from generation to actually driving.
The hydrogen system is even in the best case, assume multiple many, many improvements in mass manufacturing and so on, only half as efficient as an electric system.
Battery technology is improving at a far faster rate then hydrogen technology, its not even remotely close. By the time your predicted ' (1, maybe 2 iterations away)' happens, batteries will have made 5 iterations.
The DoD for example is already sponsoring a massive program that companies lots of universities and national labs to work on Lithium Sulfur batteries that could double or triple the density of current Li batteries while also being quite a bit cheaper.
Silicon anode batteries are already in the early stages of commercialisation and they will make commercial aviation feasible.
And even if you insist on using chemical fuel, why would you use hydrogen? If you want to drive a truck a long distance at a time, you could just use dimethyl ether, methnol or something like that. That would solve tons of problem with storage and so on.
I really don't understand why people are so fascinated with hydrogen, while it continue to disappoint for 30 years. Even in the space industry, where fuel cell used to be used all the time there use has fallen out of favor.
On the contrary, it should be the driving force about making long-term decisions to benefit society. Hell, I'd be all for mini-nuclear in vehicles but the ability to make it safe is such a high threshold that it's not even remotely feasible.
No one thought electric cars would be where they are today. Elon made this electric car market happen by making it sexy (and selling only premium cars) which helped him double down on the real vision. There is a ceiling for the battery and it's not as high as many think.
We'll see what Tesla battery day shows but my main point is this: That to improve society with long-term thinking, we need to be more innovative and it's my opinion that attacking Milton's weaknesses is a waste of the public's time/energy. Especially when short sellers get a lot more freedom in how they deal with the market. No one is being a fair arbiter of the facts. Hydrogen is better for hauling big loads, it just is. To bring that to market is Nikola's real challenge. The upside to hydrogen is greater than the upside of li-ion, full stop. Shouldn't we want the better solution for society?
No. Because people don't drive cross country everyday. Making an overall system vastly less efficient to optimize on specific metric that most people don't car about in a product is nonsense.
For grid storage density is also totally irrelevant.
What matters is price and scalability, not density.
> Elon made this electric car market happen by making it sexy (and selling only premium cars)
They are selling premium cars because that really whats economically feasible. As they go down the cost curve the cars will get cheaper.
> There is a ceiling for the battery and it's not as high as many think.
Even with current battery just going to silicon anodes/single crystal cathodes can and will double density.
Go look what is possible with Li-Sulfer batteries that are already being worked on to get to the next level.
Do you like spending a non-insignificant amount of time driving to/from a gas station (or electric charging station) and then spending even more time to wait until your local energy (car's tank/battery cells) has recharged enough for you to go again for....non-insignificant amount of time...etc..etc.
How many people have done this? How many years? etc. It's a pretty important first principle to have a system where energy density is a maximum (or at least significantly higher theoretical maximum than existing trends [i.e. Li-ion]).
> For grid storage density is also totally irrelevant.
I'm not discussing this. I'm talking about high power demands needed for semi's/trucks. The above (in this comment) is also considering the consumer market efficiency to be had.
> Go look what is possible
I'm aware but many of the efficiencies that are implemented for Li-ion [and it's variants] could theoretically compound the limit with hydrogen based. Abundance of essential compounds is a better by product than a scarce quantity of essential compounds.
P.S. This is about moving the goal posts. We're talking about innovation in a specific market. But ultimately the end goal is improving all aspects that affect society. (less destructive to the earth, doing more with less, etc)
More then 95% of EV charging happens at home. For most people a 300 miles way beyond plenty. In Europe the avg will likely be half of that.
Its seems you focus on the problems with batteries but ignore the many problems in scaling hydrogen and fuel cells. Two gigantic new industries that need to be bootstrapped and both have very significant technical and cost challenges to even get on track.
Batteries are in full ramp with 100 billions of investment in scale and 10s of billions in research. I just think they will win for the waste majority of situations.
I'm curious what this is based on. Last I checked, the li-ion batteries of today are basically the same from the ones we had 10-15 years ago. Sure, a little more silicon, a little less cobalt, but ultimately the same chemistry.
The biggest change for fuel cells is that they're moving from science project to mass production. There will be easily orders of magnitude reduction in cost. While this won't go forever, for the foreseeable future we should see a much faster rate of change for fuel cells and not batteries.
The batteries chemistry has not improved that much but the density still improved. We were in a period where cost and manufacturing improved far faster then chemistry. But thanks to the investment in batteries there are improvements to the chemistry coming down the pipe.
Tesla is gone have DBE technology that should improve density by 10-20% at least. Full silicon anodes are being commercialized right now. Single Cristal Cathodes are gone come pretty soon. Thicker anodes are being increasingly worked on.
I think we are going to continue to go down the cost curve, both because of engineering and chemical improvements.
> The biggest change for fuel cells is that they're moving from science project to mass production. T
Where is that happening exactly? In all the fuel cell cars Toyota isn't selling very well?
> Where is that happening exactly?
It is happening everywhere simultaneously. Right now, tens of billions of dollars are being invested in hydrogen and fuel cell technologies. Anyone who pays attention knows that the revolution is happening as we speak.
Also it was only yesterday that GM announced taking an 11% in the company for $2B. Surely GM has done their due diligence before throwing a couple of billions in? https://www.cnn.com/2020/09/08/business/nikola-gm-badger-ele...
That all said, everyone also thought Theranos was legitimate until they were exposed to be not.
I'm not sure there's any signal embedded in the knowledge that a company as incompetent as GM has done due diligence.
As someone who worked in automotive tech in Detroit. This isn't even close to true.
That is highly questionable to me.
> The current public narrative says that Tesla is cutting edge and futuristic, and Chevy is old school.
That the current 'narrative' because its currently true.
GM + Nikola = Theranos + Walgreens
Big Co partnership !== legitimacy
Edit: Apparently what I said is incorrect about Theranos. I have heard this but I have never made a study of the company. So it might well not be correct or only for a limited time.
I'm pretty sure I am correct about Mitons house.
https://mashable.com/article/theranos-elizabeth-holmes-detai...
Short sellers don’t really have an interest to lie though. If it doesn’t look like there is really a fire, it’s much better to close the position and hunt for a new target rather than trying to make it seem like a problem when there isn’t. Lies don’t help short sellers because they present a legal risk and a financial risk (the market steam rolling them as they are seen through).
Started with Cruise, now Nikola, and it will continue until they’re bankrupt.
While not shocking given the previous track record of Trevor's previous enterprises - the most likely outcome here is that it will get very, very ugly. He also already 'cashed out' millions of dollars to buy a 32.5 million dollar ranch - one of the largest residential properties in Utah's history. [1]
Tesla's run up and general optimism around EVs seems to have triggered a gold rush of sorts, effecting other EV pureplays' stock prices (ex. NIO) regardless of progress and actual state of the technology.
While in theory I am in strong support of new financing models to bring new technologies to market(ex. these Special Purpose Acquisition Companies - SPACs) I am very concerned that if even a portion of the alleged is true, this could poison this financing route for legitimate businesses and the sector overall. A camp in the investment industry even think Tesla is a fraud, and this would only harm the narrative and long term mission of Tesla.
It would have been great if they actually took the money, utilized it with a plan and executed on the plan to help with electrification - the premise for which I think many retail investors have become involved.
Even if there was no fraud, I was always skeptical of their plan (smelled like vaporware to me) and their adamance about hydrogen as an energy storage medium without sufficient discussion on electrolyzer technology or how those unit economics work always struck me as big red flags. Seems like Nikola's plan was to combine a bunch of off the shelf parts existing from other sources into a product, in that case - where is the technology? So much of it with just the bit of digging and what I hear about it has made me skeptical.
Probably best to stay as far away as possible and see where the chips fall. I do wish them the best though, assuming there was no fraud.
[1] https://www.latimes.com/business/real-estate/story/2019-11-1...
At this point in Tesla's history, how is it a fraud? It is manufacturing and selling cars. It is building batteries. I can see where some may think it is not living up to the hype/promise of returns, but they are actually making and selling product. Yet people are still claiming fraud?
I don't subscribe to this narrative, but it's an easy one to spin when your stock is the one being short sold.
If you promise a bunch of long holders that a particular short trade is guaranteed to make profit, would they not take it out of concern for people?
I'm just relaying what I have heard and read. Tesla's history is far from perfect. I think the target of issue has been their various claims and promises on 'self-driving' and their autonomous vehicle programs. Also, some possible issues surrounding the acquisition/merger of SolarCity.
And while the shorts around Tesla aren't making much noise right now given all the momentum, it wasn't all that long ago that there were some loud short sellers alleging about various accounting frauds. Some quick 'internet research' here will dig up various allegations and statements from the 'haters'.
More common at issue is that many traditional auto analysts' existing equity valuation models for auto companies 'break' when you plug in the numbers for Tesla - making it impossible to come to a 'reasonable' valuation they are comfortable buying at (as these are people investing other people's money need to be able to point to something that justifies the purchase if it goes south).
They do appear to be generating income from operations these days, but the size of the operation has increased so fast that it is hard to analyze.
But even if they weren't, there's a lot of daylight between unprofitable and fraudulent!
However short selling at its core just involves the belief that a company is overvalued. In the case of extreme fraud, the "correct value" is $0. In most cases, the short seller just believes it's some amount less than the current share price (but above $0).
Tesla falls into the latter category. I'm sure some do claim fraudulent behavior, but Tesla is an interesting case because Tesla's PE is ~200 IIRC, compared to the 20 average for the automotive industry. For comparison, Amazon's PE is 120.
So if you think Tesla is ultimately a car company, or even just a "regular" tech company, it's not insane to think that it's incredibly overvalued. That doesn't mean you think it's a fraud, of course, but the subtlety obviously gets lost by many (and short sellers often make grandiose edicts that don't help their case).
TSLAs PE is 896 as of market close today (371.74/.4140) and had a PE of ~1213 at its ATH price of 502.49/share
But yeah, there’s a valid non-malicious reason to believe Tesla is overvalued.
There is literally no company on the planet that can justify a 896 PE
Let's see how long Tesla can keep things going with 1,000 PEs
They are projected (based on stock valuation) to take over all or most of
cars energy solar power
Which is quite an absurd assumption
Musk may hate them, but there's is little-to-no daylight between him and the short sellers at this point; both think Tesla's stock is currently overvalues and are selling it to cash in on the current high valuations. :)
Where did he ever say Tesla was overvalued?
SPACs have been around for a long time, and they've always had a bad reputation, often used for various forms of fraud and penny stock scams. Going live via a SPAC is opaque and expensive; you'd never choose it unless the normal IPO path seemed too risky for some reason, probably because you might not be able to survive the transparency the process requires.
If Nikola is just a complete fraud, that wouldn't taint SPACs so much as it would confirm their existing reputation.
This gem right here:
> "The entire infotainment system is a HTML 5 super computer," Milton said. "That's the standard language for computer programmers around the world, so using it let's us build our own chips. And HTML 5 is very secure. Every component is linked on the data network, all speaking the same language. It's not a bunch of separate systems that somehow still manage to communicate."
This guy does not know what HTML is. What he has described is not what HTML would be used for.
And I'm supposed to believe he's some sort of mastermind behind some new age hydrogen/electric truck?
It will really only fail when the money dries up. As long as they can keep raising money, they can keep the fantasy alive long enough to lure in other investors.
It's been modern economic theory that has encouraged this stripping of US industry...unfortunately it's a lauded theory.
It isn't a very profitable market.
And I assume you're referring to the automotive bailouts in 2008 when companies in many industries were falling apart and received bailouts or TARP funds? It was a rather unprecedented situation at the time, not really reflective of overall business viability.
Domestic OEMs have plenty of issues (poor innovation, arguably poor relative quality, unions, etc.) to criticize. Operating margins, which tend to be on par with foreign OEMs, aren't really one of them. And it really depends on what you're comparing it to to make a determination about how profitable the sector is. Pretty much nothing is as profitable as SaaS, but 4-5% is nothing to laugh at.
There is a metric shit ton of pressure on these legacy automakers to compete with Tesla. Sure, you may think Tesla is a relatively small slice now, but the leaders at these companies are extremely scared of falling behind technologically to the point where they are uncompetitive. I'm quite sure a lot of people at GM were skeptical, but I bet a lot of them also did the subconscious calculation "What's worse for my career, losing out on a deal with an innovator like Nikola and falling even further behind, or going with Nikola, in which case if it fails we're not much worse off then we were originally?" Against this backdrop it's easy to see how a scammer can take advantage of this dynamic and even play legacy players off each other, e.g. "Well, you could choose not to invest in us, but then think how much further behind Tesla you'll be. And you know we're talking to Ford, too."
If he could talk lucidly about things like HTML I'd think that lent more credence to the possibility he didn't have a clue about hydrogen
edit: for the downvoters, if you haven't seen one of these "bear thesis" articles before, understand you must do at least as much homework as the bear claims to have done before accepting anything you read. Of course Nikola is a dodgy company, but it's also a social phenomenon. That's the value in it for the likes of GM, and also for the average investor -- including the professionals. At one stage YouTube was the largest video piracy company on the planet before a larger company swallowed them up and cut deals to legitimize what they'd done. Meanwhile, everyone knew the brand. You can consider what's happening here to be something roughly comparable
nothing about his background or experience gives any legitimacy to him being in a position of "electric truck CEO and mogul"
Why should we not assume his HTML5 knowledge is roughly equivalent to his hydrogen car knowledge?
2. It’s not the lack of understanding that’s concerning. It’s the confident wrongness.
Lying with confidence is, after all, where the "con" in con man comes from.
> Trevor claimed that Nikola’s headquarters has 3.5 megawatts of solar panels on its roof producing energy. Aerial photos of the roof and later media reports show that the supposed panels don’t exist.
what is the connection between HTML5 and building your own chips?
stock goes up 10%
The "build our own chips" could be like when people call entire computer towers "CPUs" and really just mean build the infotainment boards how they like. HTML 5 gives them easy portability in the case they want to change things out.
Security would probably refer to embedding something like Chromium and taking advantage of their sandbox
And "data network instead of stuff just working" could mean something like local network RPC/REST over HTTPS instead of CAN which is much more general purpose
-
This is all a lot of stretching... but sometimes non-technical people try to very confidently regurgitate technical things they hear while filling in the gaps
Especially because they don't realize how small changes in terms have such outsized changes in meaning (hence the calling a computer tower a CPU)
But Alibaba is real. It's a real company doing real things and delivering real value. It's a giant success.
Now I'm not saying Nikola will be (maybe those shorts for 2022 are pretty cheap) but people speak like complete idiots and still run successful companies that they start.
¹ https://www.youtube.com/watch?v=f3lUEnMaiAU
Here's a highlight: https://youtu.be/f3lUEnMaiAU?t=789
When you are the head of a revolutionary startup that's competing technologically with existing companies, you can't afford to be one.
Of course you can, you hire people to understand those things for you and make them work. Do you think the bulk of innovation, design and execution comes from the CEO's own head? Not even Elon Musk is that integral to his companies or their output.
He was however a massively charismatic individual and an extremely good judge of character, so he was able to use these traits to sweet talk investors and hire people he knew he could trust to get the job done.
He comes across as a complete idiot.
Maybe you don't need to be that smart to run a company like Alibaba, but I find that hard to believe - I suspect government protection and party favoritism plays a part.
It became clear they (+ANT financial) exist only because the CCP allows them to exist with heavy funding.
https://www.marketwatch.com/story/can-we-trust-alibabas-numb...
Most people do not really know how HTML works, and nobody but technical people should really.
Or at least - they could make major mistakes in communication.
If he was 'my CEO' I would understand that he was trying to say 'Infotainment is a platform, built on extensible tech that everyone knows how to use' - this is fair.
It seems like Nikola is a fraud, but this isn't the red flag actually. This is standard miscommunication.
Should have added some blockchain while he was at it.
And yet every Tesla owner tells me that their car is just one update away from driving itself across the country.
Milton stated that using a very secure HTML5 supercomputer that's linked on the data network allows them to build their own chips.
These statements are not equivalent in what they imply about the speaker. It's not subtle.
What's the over/under on cold fusion before self-driving?
It used to be more fun before the search engines start pushing age over relevance, but searching for 'elon musk claims' is entertaining.
You can watch that talk and see the approach they're taking. Maybe you're more skeptical than they are about the near term possibility, but you can see that the work and progress is real.
The AGI risk is real too.
What Milton said doesn't make semantic sense, it's not a question of timelines.
I'm not claiming that the Head of AI Research at Tesla has said stupid things (I don't think he has), I'm saying that Musk has said stupid and nonsensical things that don't make semantic or scientific sense, and in comparison to Milton their hucksterism is just a difference of degrees.
It's not a matter of degree, but one of kind.
AGI is not 50 years away - it is unknowably far in the future. It may be a century, it may be a millenium. We just know far too little about the human mind to make any firm prediction - we're like people in Ancient Greece or 1800s England trying to predict how long it would take to develop technology to reach the moon.
We are at the level where we can't understand how the nervous system of a worm works in terms of computation. Emulating a human-level mind is so far beyond our capabilities that it is absurd to even imagine we know how to do it, "we just need a little more time".
I agree it's not possible to have a good idea to the answer to this question, unless you happen to be involved with a development group that is the first to figure out the critical remaining insights, but it's more in the league of "don't know if it's 5 years or 50" rather than "100 years or 1000".
Predictions are easy when there are no consequences, but I wouldn't make a bet with serious consequences on critical developments for AGI not happening in the next decade. Low probability, probably, but based on history, not impossible.
It seems to me extremely clear that we are attacking the problem from two directions - neuroscience to try to understand how the only example of general intelligence works, and machine learning to try to engineer our way from solving specific problems to creating a generalized problem solver. Both directions are producing some results, but slowly, and with no ability to collaborate for now (no one is taking inspiration from actual neural networks in ML, despite the naming; and there is no insight from ML that could be applicable in formulating hypotheses about living brains).
So I can't imagine how anyone really believes that we are close to AGI. The only way I can see that happen is if the problem turns out to be much, much simpler than we believe - if it turns out that you can actually find a simple mathematical model that works more or less as well as the entire human brain.
I wouldn't hold my breath for this, since evolution has had almost a billion years to arrive at complex brains, while basic computation has started from the first unicellular organisms (even organelles inside the cell and nucleus are implementing simple algorithms to digest and reproduce, and even unicellular organisms tend to have some amount of directed movement and environmental awareness).
This is all not to mention that we have no way right now of tackling the problem of teaching the vast amounts of human common sense knowledge that is likely baked into our genes to an AI, and it's hard to tell how much that will impact true AGI.
And even then, we shouldn't forget that there is no obvious way to go from approximately human-level AGI to the kinds of sci-fi super-super-human AGIs that some AI catastrophists imagine. There isn't even any fundamental reason to assume that it is even possible to be significantly more intelligent than a human, in a general sort of way (there is also no reason to assume that you can't be!).
Check out GPT-3’s performance on arithmetic tasks in the original paper (https://arxiv.org/abs/2005.14165)
Pages: 21-23, 63
Which shows some generality, the best way to accurately predict an arithmetic answer is to deduce how the mathematical rules work. That paper shows some evidence of that.
> evolution has had almost a billion years to arrive at complex brains
There are brains everywhere and evolution is extremely slow. Maybe the large computational cost of training models is similar to speeding that computation up?
> there is no obvious way to go from approximately human-level AGI to the kinds of sci-fi super-super-human AGIs that some AI catastrophists imagine.
It's worth reading more about the topic, it's less that we'll have some human comparable AI and then be stuck with it - more so that things will continue to scale. Stopping at human level might be a harder task (or even getting something that's human like at all).
> This is all not to mention that we have no way right now of tackling the problem of teaching the vast amounts of human common sense knowledge that is likely baked into our genes to an AI, and it's hard to tell how much that will impact true AGI.
This is a good point and basically the 'goal alignment problem' or 'friendly AI' problem. It's the main reason for the risk since you're more likely to get a powerful AGI without these 'common sense' human intuitions of things. I think your mistake is thinking the goal alignment is a prerequisite for AGI - the risk comes from the truth being that it's not. Also humans aren't entirely goal aligned either, but that's a different issue.
I understand the skepticism, I was skeptical too - but if you read more about it (not pop-sci, but the books from the people working on the stuff) it's more solid than you probably think and your positions on it won't hold up.
Getting back to the human bit, I'm using 'human' just as a kind of intelligence level, indicating the only intelligence we know about that can do much of anything in the world.
The paperclip maximizer idea still assumes that the AI has an extremely intricate understanding of the physical and human worlds - much better than any human's. My point was that there is no way at the moment to know if this is possible or not. The whole excersise believes that the AI, in addition to understanding the world so well that it can take over all of our technology, could additionally be so alien in its thinking that it may pursue a goal to this utmost extent. I find this combination of assumptions unconvincing.
Thankfully, the amount of knowledge we have about high level cognition means that I'm confident in saying that I don't know significantly less than, say, Andrew Ng about how to achieve it (though I probably know far less than him about almost any other subject).
I'm not claiming that AGI risk in some far future won't be a real problem. My claim is that it is as silly for us to worry about it as it would have been for Socrates to worry about the effects of 5G antennas.
Did you read what I linked? (I don't intend this to be hostile, but the paper explicitly discusses this.) They control for memorization and the errors are off by one which suggest doing arithmetic poorly (which is pretty nuts for a model designed only to predict the next character).
(pg. 23): ”To spot-check whether the model is simply memorizing specific arithmetic problems, we took the 3-digit arithmetic problems in our test set and searched for them in our training data in both the forms "<NUM1> + <NUM2> =" and "<NUM1> plus <NUM2>". Out of 2,000 addition problems we found only 17 matches (0.8%) and out of 2,000 subtraction problems we found only 2 matches (0.1%), suggesting that only a trivial fraction of the correct answers could have been memorized. In addition, inspection of incorrect answers reveals that the model often makes mistakes such as not carrying a “1”, suggesting it is actually attempting to perform the relevant computation rather than memorizing a table.”
> The paperclip maximizer idea still assumes that the AI has an extremely intricate understanding of the physical and human worlds - much better than any human's. My point was that there is no way at the moment to know if this is possible or not.
It seems less likely to me that biological intelligence (which is bounded by things like head size, energy constraints, and other selective pressures) would happen to be the theoretical max. The paperclip idea is that if you can figure out AGI and it has goals it can scale up in pursuit of those goals.
> I'm not claiming that AGI risk in some far future won't be a real problem. My claim is that it is as silly for us to worry about it as it would have been for Socrates to worry about the effects of 5G antennas.
I think this is a hard claim to make confidently. Maybe it's right, but maybe it's the people saying the heavier than air flight is impossible two years after the Wright brothers flew. I think it's really hard to be confident in this prediction either way, people are famously bad at this.
Would you have predicted gpt-3 kind of success ten years ago? I wouldn't have. Is gpt-3 what you'd expect to see in a world where AGI progress is failing? What would you expect to see?
I do agree that given the lack of clarity of what should be done it makes sense for a core group of people to keep working on it. If it ends up being 100yrs out or more we'll probably need whatever technology is developed in that time to help.
I read about this before. I must confess that I had incorrectly remembered that they had only checked a few of their computations for their presence in the corpus, not all of them. Still, they only check for two possible representations, so there is still a possibility that it picked up other examples (e.g. "adding 10 with 11 results in 21" would not be caught - though it's still somewhat impressive if it recognizes it as 10 + 11 = 21).
> It seems less likely to me that biological intelligence (which is bounded by things like head size, energy constraints, and other selective pressures) would happen to be the theoretical max. The paperclip idea is that if you can figure out AGI and it has goals it can scale up in pursuit of those goals.
Well, intelligence doesn't seem to be so clearly correlated with some of those things - for example, crows seem to have significantly more advanced capabilities than elephants, whales or lions (tool use, human face memorization). Regardless, I agree that it is unlikely that humans are a theoretical maximum. However, I also believe that the distribution of animal intelligence to brain size may suggest that intelligence is not simply dependent on the amount of computing power available, but on other properties of the computing system. So perhaps "scaling up" is not going to be a massive growth in the amount of intelligence - that you need entirely different architectures for that.
> Would you have predicted gpt-3 kind of success ten years ago? I wouldn't have. Is gpt-3 what you'd expect to see in a world where AGI progress is failing? What would you expect to see?
I don't think GPT-3 is particularly impressive. I can't claim that I would have predicted it specifically, but the idea that we could ape human writing significantly better wouldn't have seemed that alien to me I think. GPT-3 is still extremely limited in what it can actually "say", I'm even curious if it will find any real uses that we don't already outsource as brain-dead jobs (such as writing fluff pieces).
And yes, I do agree that this is a problem worth pursuing, don't get me wrong. I don't think lots of AI research is going in the right way necessarily, but some is, and some neuroscience is also making advances in this area.
I appreciate that what I just said comes with a huge caveat - and that probably 80% of the work will be hammering-down everything else - but consider that Google’s Waymo is already well-past that already.
I just drove my Tesla half way across the country and back last week. And based on the performance of Autosteer and the neighboring car visualizations they're nowhere close to Level 5 self driving.
Love the car and am a big Tesla/SpaceX fanboy. But I won't believe it'll achieve Level 5 until I see it.
Before you downvote this, keep in mind that the founder comes from a Mormon background - perfect upbringing to be trained as a salesman
Another example of selling snake-oil ideas comes from the author of the book "The 7 Habits of Highly Effective People":
"According to Clayton Christensen, The Seven Habits was a secular distillation of Latter-day Saint values." https://en.wikipedia.org/wiki/Stephen_Covey
Imagine being trained like that from youth- you could sell anything. This comes from an anecdote from an ex-Mormon friend.
BTW, they sound like idiots to the people that understand the technology but that's a small subset of all people. Most people have even less understanding than the CEO. So they get influence by his charm and finesse. What most people would call BS around here.
"More impressive is that Nikola’s revenue for the second quarter was very small ('immaterial,' Nikola actually calls it), just $36,000. Most impressive, though, is how they earned that revenue:
'During the three months ended June 30, 2020 and 2019 the Company recorded solar revenues of $0.03 million and $0.04 million, respectively, for the provision of solar installation services to the Executive Chairman, which are billed on time and materials basis. During the six months ended June 30, 2020 and 2019 the Company recorded solar revenues of $0.08 million and $0.06 million, respectively, for the provision of solar installation services to the Executive Chairman. As of June 30, 2020 and December 31, 2019, the Company had $3 thousand and $51 thousand, respectively, outstanding in accounts receivable related to solar installation services. The outstanding balance was paid subsequent to period end.'
'Solar installation projects are not related to our primary operations and are expected to be discontinued,' says Nikola, but I guess they are doing one last job, specifically installing solar panels at founder and executive chairman Trevor Milton’s house? It is a $13 billion company whose only business so far is doing odd jobs around its founder’s house."
Edit0: formatting.
They pulled a truck up a hill and let it roll down unpowered, using it in a video demonstrating their new EV technology when nothing worked. Who does that.
That would be 'Tesla making a video of a working vehicle and showing it at Conf because they are not sure it will start!'
There are reasonable expectations of 'show', but showing something that literally does not work, as 'working' would be fraud.
The equivalent would be 'there is no software' so 'just make a video fabrication of software' and then show that at the conf.
Because you aren't sure it's going to work at all, ever.
Uber manually arranging a driver / passenger pick up and animating a vehicle on the map along a predefined route, etc. etc.
It’s edgy to say startups do this, but there hasn’t been a startup conducting this level of fraud so openly since Theranos. And Nikola is a publicly traded company valued at billions.
When I look around, it seems more the case that being a better person or a worse person both take a lot of work. "Chaotic neutral" is probably cake by comparison.
If you want to be a billionaire you have to practice, practice practice taking more than your share, and some days that'll count for a percentage of your goal. Or put more simply, it's not about the $50k, it's about the muscle memory.
If you've really thought through it and still figure it's a good idea, I'd honestly like to stay as far away from you as possible. Because I'm pretty sure that would represent a judgement that's at best very unsound, and in the more likely case indicates a personality that's dangerous to their surroundings.
Not just that. It is still a very, very big world to ply their scams upon. While it has gotten a little better with the Net, there is still plenty of room to work with.
There are still tradespeople that still rack up a pile of pissed-off clients and lawsuits, then walk away to another province/state.
How many utterly toxic managers have you worked with that completely trashed a department to glorify themselves, collect the big bonus check in Year 3, then walked off to the next company before the entire rickety house of cards comes crashing down? Until business culture attitudes change on short-tenures, swapping long-term stability for short-term gain remains the easiest scam to run for easy gains.
How many minus-X engineers have you worked with who were extremely good at socializing with management, held up process and procedure as a shield to ward away anyone from asking them to do anything, then pushed to the front of the crowd when a delivery milestone is achieved?
How many products and services outside of your area of expertise have really good marketing, even good "reviews", but upon actual real world use are complete wrecks, or have critical defects that sit unaddressed for years or even decades? Our socio-political-economic system is extremely good at broadcasting the availability of goods and services at light speed, but we're still stuck in the Bronze Age of speaking individually with each other in the market bazaar literally word of mouth to find out the worth of those economic transactions.
There is an entire industry thriving within Amazon's ecosystem doing exactly this, drop shipping from China factories spewing schlock that only marginally works long enough to prevent monetary clawbacks. Personally, there is an entire product category I've tried 7 different vendors all with great Amazon ratings where every single unit has failed within six months of use: Lightning audio splitters (you can split a Lightning port into either two Lightning ports, or a standard mini audio jack and a Lightning port, typically to plug in a headset and keep an iDevice powered at the same time...like needed for regular marathon web conferences where Bluetooth headsets don't last long enough). I made a Franken-dongle comprised of an Apple-branded Lightning-to-HDMI converter, HDMI audio extractor to RCA audio plugs, and RCA audio plugs to female mini jack audio plug to work around this.
It takes a large amount of effort to find reasonable comparisons between products and even then, many manufacturers change up quality when they "reach the top" and want to cash out on "winning" the quality-value race. Todd at Project Farm exemplifies the absurd amount of work it takes to compare pedestrian tools and supplies. The many, many posts in neighborhood chat groups/forums asking for recommendations for a good electrician, HVAC, plumber, dentist, etc. exemplify the general failure to set up non-gamed, non-compromised review systems integrated into the economic system.
And illustrate the general failure of capitalist transactions as we know them today to convey granular merchant-to-customer information like say, a market butcher with a cook: the transactions lossy-compress away all the time-bound and quality-bound attributes of the transaction itself into a single number, and then lossy-compress away again that single number into a multitude of streams of numbers (revenue/income/profit/loss) inaccessible to customers except for the largest publicly-traded entities at the grossest levels, and then lossy-compress away on top of that with credit availability to mask and obfuscate real-time effects. Customers are left with a huge latency between actual supplied quality in real-time to rough reputational "feel" from aggregated opinions over a long period of time.
Fraud is not a bug of such a system, it is a vital operating feature for far too many economic actors.
This is a great example of why shorts are socially valuable. Without that incentive who would go to the trouble of doing all this research to uncover (possible) fraud? This topic that comes up a lot on Money Stuff, where its easier for private companies to hide misbehavior because you can only short the public ones.
Very sad and disheartening to see it continue and get further investment, just make me think that telling the truth does't pay, selling lies does, fake it till you make it taken to the extreme, similar to Tharanos.
The over promise under deliver approach Musk uses annoy's me but there is something real there, real results, Nikloa is literally riding on a play of a name of another company. At least Musk recognizes the issues with Hydrogen and he obviously has a grasp of the technical issues:
It will probably surprise nobody here that the Pareto Principle applies to large scale manufacturing. Hand building a vehicle is 10% of the work, and the other 90% is a very different kind of work and skillset that is easy to drown in. A bunch of things you just figured out how to do well, you need to stop doing entirely because a machine or a vendor should be doing them for you. Along with all the people and equipment you acquired to do it.
You have to stomach writing off a bunch of equipment, swallowing your pride and taking advice from people who have no sweat equity in your company. And as a cherry on top, you probably get to be the asshole that has to fire John Henry, who has been here since before the machines.
Nikola’s Director of Hydrogen Production/Infrastructure Is Trevor Milton’s Little Brother, Who Worked Paving Driveways in Hawaii Prior To Joining at Nikola
Nikola’s Chief Engineer: A Background Largely in Software Development and Pinball Machine Repair
So I looked it up and basically it looks like they acquired a company which was ALREADY listed on NASDAQ then renamed it.
> In March 2020, Nikola announced its plans to merge with VectoIQ[10] Acquisition Corporation[11] (ticker VTIQ), a publicly traded special purpose acquisition company run by former General Motors Co. executive Steve Girsky. This resulted in the combined company being listed on the NASDAQ exchange with the NKLA ticker symbol.[12] Nikola’s stock began trading on June 4, 2020, a day after the merger was completed
Not just any company, a Spac. Special purpose acquisition company. That's their purpose, they're not actually companies, but blank check investment vehicles.
It's a way to go public without an IPO. And unlike reverse mergers with actual companies spacs are clean since they're shell companies.
They're neither shady nor unusual, though.
Don’t forget that “Hindenburg Research” (seriously?!) stands to make many tens or hundreds of millions of dollars based on whether they can convince a significant number of shareholders that what they are claiming is true. And also that if they are successful in doing so that it also becomes a self-fulfilling prophecy.
I have no reason to believe or disbelieve any claims being made in TFA, so the only thing I can say for sure is that that this “report” is in no way altruistic.
One of the very precarious notions around short selling is the financial incentive it provides to ruinously slander a company, and the very meager legal protections a company has against defamatory claims that short sellers make — in the name of “analysis” — against a company that they stand to make a fortune from if it fails.
Without knowing anything one way or another about Nikola, the only thing I can say for certain is that if Nikola misstates a material fact to investors they can go to jail, whereas if “Hindenburg” gets their facts entirely wrong they face no repercussions. They have no duty to the shareholders of Nikola stock, and the legal peril of being even willfully wrong in their analysis is minuscule compared to what Nikola officers could face from the SEC.
That’s just the grain of salt I would carefully consider before reading anything that Hindenburg puts out.
The group releasing the report stands to lose their position if their claims are false or even if the market ignores them. I’d argue it’s a lot harder to convince a bunch of people with long positions making the market that they pumped the wrong company than it is for the makers to ignore the ruse long enough to diversify the inevitable failure and pass it into your retirement fund.
You don't just short companies for fun with no ramifications. I think you’re painting an exaggerated picture of the nature of taking down a company. You only attempt to do so if you are extremely sure of your convictions and have overwhelming evidence to support your case. You make enemies and you risk losing your connection to other market makers.
I came across Nikola last month and didn’t need a report like this to smell something fishy. But this one is especially damning. I see no reason to not believe the evidence in the report.
But I was long Tesla during a similar period in their own existence, while short sellers tried to make a similar case that Tesla was a fraud and certain to go bankrupt any day.
There is always a strong reason to question a report when the authors have an extremely vested interest in people believing it, and in fact when the objective truth of whether they are right is less important than how many people they can make believe that they are right.
It does present a bit of an ethical conundrum. Is it ethically correct to not point out something you believe to be fraudulent?
It's certainly unethical to deliberately slander something you believe to be viable, purposes of profit or not, but it can be hard to tell the difference when judging any such initiative.
I could see the case for banning advocating a short position, reasoning in terms of market manipuiation, but I don't think it's clear-cut. Was also a very close observer to the Tesla shennanigans two years ago, and there were some shameful tactics being used at the time.
>We view the Hindenburg as the epitome of a totally man-made, totally avoidable disaster. Almost 100 people were loaded onto a balloon filled with the most flammable element in the universe. This was despite dozens of earlier hydrogen-based aircraft meeting with similar fates. Nonetheless, the operators of the Hindenburg forged ahead, adopting the oft-cited Wall Street maxim of “this time is different”.
>We look for similar man-made disasters floating around in the market and aim to shed light on them before they lure in more unsuspecting victims.
Looking at this piece I feel like Mark Baum when he met Greg Lippman (changed to Jared Vennett in "The Big Short"): They are "so transparent in [their] self-interest, I kind of respect them."
The fact that big companies and Big CEO's are stupid and incompetent is the interesting thing.
Everyone who worked on this deal at GM should be fired along with the CEO.
I once worked at a 'Big Company' that thought about buying n Mp3 player. Everyone loved their CEO, their pitch, the box, product looked slick.
We were going to buy it. I took it home and tried it and it was garbage.
Literally our M&A team, execs, due diligence and nobody bothered to fing try the dam product* and use a little bit of common sense to ascertain whether it was 'quality' or not.
This was not fraud, and of a much smaller scale, but it's just incredible how big the 'blind spot' so many executives have.
Edit: I said executives were 'stupid' they generally are not. They just have gaping holes in their abilities, that enough ego doesn't allow them to even see themselves. It's understandable they don't want to look weak, but insane that they don't do background/deep checks.
If I were a CEO I would include 'product & IP validation' right up front as part of due diligence - not just by 'accredited people' (because you can't get a 'CA' in tech) but by people you trust.
Edit 2:
"Trevor has appointed his brother, Travis, as “Director of Hydrogen Production/Infrastructure” to oversee this critical part of the business. Travis’s prior experience looks to have largely consisted of pouring concrete driveways and doing subcontractor work on home renovations in Hawaii."
Oh please make this into a Tiger King Netflix special ...
I think the flood of retail investors with disposable income and government benefits is leading to absurdities in market pricing. See: Hertz skyrocketing after announcing bankruptcies.
After all, the stock has dropped 90%, how much lower can it go right?
Well, to the new investors, all the way to 0.
If the stock truly is wiped out and common shareholders equity is 0, you can exercise the put, receive 100x the strike value per contract, and deliver nothing.
Source: https://www.optionseducation.org/referencelibrary/faq/splits...
How long will the fraud last? Isn't your return limited by the difference available under the put?
I generally stick to calls because it's way easier to make money in a company you know is good and it's easier to capture the upside (Peloton for me recently).
Market seems skewed this way, it's a lot harder to correct the price even when you know it's total bullshit. Seems likely to allow frauds to go on longer.
- Subscription model makes sense and is sticky with good margins.
- Undercuts gyms while providing better experience.
- Well timed growth during pandemic.
If I use a product and think it's really excellent I'll check out the stock and the company. This has largely worked for Apple, Tesla (bought in 2012), and now Peloton.
It is. Max profit when stock prices hits zero. It can be still a massive return compared to the premium invested.
Assuming the house of cards falls before expiration, of course.
Premiums are rather high on NKLA puts too.
I would have expected that GM's due diligence team would uncover this sort of stuff prior to taking an 11% position in the company.
Which proves to me, once again, that the way to get rich is to defraud people with a lot of money, and not a lot of insight.
The work they are supposed to be doing for Nikolai is the same work they'll be doing for their own EV trucks (that they'll have to have at some point) so you can look at it as GM being paid by Nikolai for R&D.
I would still not do this deal if I was GM.
The probability of Nikolai bursting in the flames of disgrace and litigation before they'll pay GM for anything is 99%.
GM can only sell 30% of stock after a 1 year (and additional 30% each year after) so by the time they can cash in, it'll likely be worthless.
And Mary Barra will have to explain how she got taken by an obvious fraud. It might end up costing her a job.
GM also would retain the right to all the fuel credits and those could be valuable.
If Nikola is successful, GM profits with a great deal. If its not GM doesn't actually lose much. only the time it engineers spent on cooperation with Nikola and potentially some tooling cost.
It's GM, so it wouldn't shock me. But as others have pointed out, the deal isn't quite as bad as it sounds.
> relying on the 'fake it till you make it' mantra betting other people's money on the outside chance they can figure out how to do what they claim they already do before everyone else catches on.
This really does seem like the de facto path to unicorn status. SoftBank and WeWork, Theranos. I would also throw in the soon-to-IPO Palantir and Snowflake. Both seem to be held in the air on pure hype on incredibly lackluster fundamentals. Uber is a decade old now and no one knows their end game. They seem to either be holding out for all taxi services to die off so they can start fleecing their customers, or on pie-in-the-sky hopes of a self-driving fleet of vehicles (owned and insured by who, I wonder?) I personally don't see anything "free market" about these obvious market manipulations via heavy subsidies. This sort of winner-take-all behavior will likely hurt consumers and choice in the long run.
But back to your main point, this is just the Minimum Viable Product nonsense taken to its logical extreme. How often have you seen the advice to just toss together a demo, fake website, or whatever and collect email addresses and/or get customers paying real money upfront for a product that is pure vaporware? It's the very first thing people tell you to do to verify a market. I have yet to see a startup that wasn't a little bullshit. Perception is reality today. That's what all these "fake it til you make it", "move fast, break things" type of people remind you, relentlessly.
Reason? I think most readers would stop reading this (IMO) badly written and badly formatted avalanche of statements (which may or may not be true, but the form in which it is presented doesn’t give me confidence that it is) before hitting that info.
This is within 5 minutes of reading so I don't know where you got the 'end of the article' from.
(I read the report this morning so they didn't added it after ward.)
They didn't say only at the end. Near the top, the article itself even says to look at the end: "Please see our full disclaimer at the bottom of the report."
Oddly? It's not the job of the investors to champion for the company. The short seller presented a report with research and evidences. Another party is welcome to produce their own report that 'share any of the positives that a company may possess.' For example, Nikola.
Let the company presents its side of the story, then it's up to the market/public to decide whether the reports stand on their own merit.
So maybe they are looking for companies that are going to have extreme PR disasters, regardless of actual consequences.
I think the Hindenburg is the best known because it was captured on film and broadcast radio, and was also the last.
In any case, I think the "too soon?" window has closed for the Hindenburg Disaster.
Hedge funds are not usually terribly concerned with marketing image. See, for example, Cerberus Capital Management, the former owner of Chrysler, which saw fit to name itself after a three-headed dog that guards the gates of Hell.
It’s a special kind of pretentious language that people use to make them seem more authoritative or accurate/deliberate. It’s manipulative.
- quantify/fication instead of "measure/ment"
- problematic instead of "a problem"
- such that instead of "that" (the correct usage is as a phrase that comes from math proofs, "pick an x such that y")
I think this one comes out of a fear of or desire to avoid confrontational language in general in the US. Something can be called problematic without declaring “a problem exists”.
What, you got a problem?! :)
Every group has its own language and jargon, used to signal group membership. It doesn't have to make sense grammatically or logically.
Interesting that GM seems to be making a lot of moves at once.
https://www.cnbc.com/2020/09/03/gm-and-honda-to-estabish-str...
https://www.autoblog.com/2020/07/08/hyundai-xcient-fuel-cell...
And then I ran into this article. https://www.autoblog.com/2020/08/13/nikola-hyundai-hydrogen-...
Trevor Milton, founder of Nikola Corp, said he would like to cooperate with Hyundai. He said he had twice made proposals to Hyundai that were rejected.
Someone sold GM on a fraudulent electric vehicle future? Let's ask some former EV1 owners how that feels.
They are 'the next Tesla' but 'better' because they use 'hydrogen'. And every 'blogboy' knows that hydrogen is the real technology of the future. So when a untypical CEO from a Tesla like company makes big claims and has amazing presentation and videos to back it up, many buy it.
Nikola did clever things like suing Tesla over their truck design, to get massive exposure threw the Tesla hype machine with the moto bad publicity is publicity. They consistently try to get into all the Tesla and EV influences and made it a point of trying to get them onboard. Trever Milon often competing on Tesla, comparing themselves to Tesla and so on.
He literally says things like 'There are few people who can out-Elon Elon but I'm one of them'. That sort of talk sells well.
Nikola for 4 years consistently trying to insert itself into the conversation and that has really payed of for them. They have never done anything but get mentioned right along companies established car makers. In reality Nikola is far less of a company then Rivian, but much better known.
This might be one of the best parts.
https://www.cnet.com/roadshow/news/budweiser-beer-nikola-hyd...
They were one of the very few companies that claimed revolutionary battery technology. This is an instant red flag and a huge one. New revolutionary batteries don't just just happen.
Sila Nanotechnology, is only replacing anode materials, and they have been at it since 2012 and don't expect to be in cars until 2025. Quantum Scape, who want to make Solid State Li Anode batteries is not gone be in cars until 2025.
There were a number of other companies who also did this 'we have revolutionary batteries'. Some actually believed they did. Dyson is a good example, they wanted to create a car, and to achieve their targets, they invested lots of money including in batteries. However since they are a honest company they eventually admired that they couldn't hit their engineering targets and abandoned the project.
A Nikola competitor in the arena of bullshit spinning is Henry Fisker. His first company made lots of nonsense claims, including about batteries, but unlike Nikola they actually went threw the trouble and made some investment in future battery tech, just not credibly commercial ones. They went bankrupt. His new company is right back to the old bullshit spinning way but they have lower their ambitions and just open say they want to buy the VM MEB platform, now they are gone be the most 'sustainable' among other claims.
As a comparison, Tesla 'revolutionary' technology at battery day will likely not be a silicon anode or a lithium anode, those are simply not ready for commercial use. Revolutionary battery technology would be 10-20% energy density improvment and 30-50% longer lifetime maybe 2x faster production speed, and Tesla has been working on this for 5-10 years and have spent many 100s of millions acquiring a set of companies and having research agreement with multiple universities that all work in collaboration. In total I would guess to really bring a new cell to market at scale, you are talking 5-15 years and 5 billion $, and that is still with basically conventional cell chemistry.
Much of the same can be said about Fuel Cells. Toyota, Honda and also the Koreans have been banging their head against the fuel cell wall for 30 years, with heaps of government money to back them up. They know they can't make it work, even with their massive resources. In personal vehicles they are not competitive against EVs in the slights (while also not being an improvement in CO2 compared to Gas) while in trucks they are not competitive with Disel or Natural Gas, and soon electric trucks are gone take the majority of routes over as nobody can compete with their price on these short and mid distant routes.
But Nikola are gone make it, and not for a geographically small place like Japan, but for the gigantic US without much government support either.
Another topic is that of product announcements. If you follow Nikola for many years, or you go back to 2016 and look at their announcements there is a funny effect that happens. People can say about Elon Time what they like, but mostly the products actually do come out and often are improved over the original announcement in a number of ways. Nikola shows the exact opposite pattern. It goes something like this, announce revolutionary new product but its 3-5 years out. Then progressively lower the specs over time, while pushing the time to market out further.
The hype for anything EV related has been insane. Quantum Scape is a fine company for example, but they have valuation that is insane for a company that is not gone make real money for many years and not gone make profits for many more after that. They essentially have a technology that requires a totally new manufacturing system, while competitors like Sila can put their materials in existing facilities claim the same level of improvements. I wouldn't expose myself to a unique technology with so much competition
There are tons of EV startups and they differ widely from Lucid, Rivian being serious companies step by step putting in place a solid car company. Dynamic companies like NIO coming out of China. And there are the bottom feeders like Nikola, Fisker and others that surf on the hype.
This is gone be a massive market shakeout with Tesla being the leader hunted by everybody. Slow moving giants like VW, Toyota and so on finally realizing whats happening and taking methodical step after step. And a massive wave of startups from around the world, especially China trying to be next next big thing. Its gone be interesting to say the least.
If Nikola goes under... GM hasn't lost anything. They can take all the work they did and just use it for their EVs.
This is a marketing video. For all we know that truck could have an engine. I'm talking about a real actual video of the truck doing what it's been proclaimed to do. It's been a few years, it shouldn't be so hard to have a single video of a truck getting close to these targets.
GM gets 2 billion in stock + 700 million in cash reimbursements and a strategic partnership. Nikola implodes, then GM still gets whatever of the 700M they could file and all the work they did is directly useful and necessary for their own EV projects. They're basically getting paid to do their own R&D
The hit is to their reputation.
Nikola basically paid GM to "partner" with them in a lopsided deal so they could have more credibility.
Elon Musk fanboys are jealous that Trevor Milton is doing it better, faster.
Also direct answer to your question: https://money.cnn.com/2012/04/12/markets/ponzi-scheme/index....
https://restofworld.org/2020/how-a-forbes-cover-star-stole-m...
https://www.timeslive.co.za/news/south-africa/2020-09-07-for...
Your taxes will always be supporting their business.
Hydrogen powered ones? Most likely not, unless the fossil fuel industry manages to convince everyone they are still needed.
I'll say it, I have no idea of validity of any of these statements, need to go read. But do remember getting weird stock pump and dump emails about this company a long time ago and it always put a bad taste in my mouth.