Davis

I enjoy talking about the market | I-Banker & Growth Investor

[Tesla @Tesla]

While there are many articles that do not accurately convey the nature of our safety systems, the recent Washington Post article is particularly egregious in its misstatements and lack of relevant context. 

We at Tesla believe that we have a moral obligation to continue improving our already best-in-class safety systems (https://t.co/EMIEfc5kHo). At the same time, we also believe it is morally indefensible not to make these systems available to a wider set of consumers, given the incontrovertible data that shows it is saving lives and preventing injury. 

Regulators around the globe have a duty to protect consumers, and the Tesla team looks forward to continuing our work with them towards our common goal of eliminating as many deaths and injuries as possible on our roadways.  

Below are some important facts, context and background.

Background
1. Safety metrics are emphatically stronger when Autopilot is engaged than when not engaged.

a.
In the 4th quarter of 2022, we recorded one crash for every 4.85 million miles driven in which drivers were using Autopilot technology. For drivers who were not using Autopilot technology, we recorded one crash for every 1.40 million miles driven. By comparison, the most recent data available from NHTSA and FHWA (from 2021) shows that in the United States there was an automobile crash approximately every 652,000 miles. (https://t.co/RZjjBmylTk)

b.
The data is clear: The more automation technology offered to support the driver, the safer the driver and other road users. Anecdotes from the WaPo article come from plaintiff attorneys—cases involving significant driver misuse—and are not a substitute for rigorous analysis and billions of miles of data.

c.
Recent Data continues this trend and is even more compelling.  Autopilot is ~10X safer than US average and ~5X safer than a Tesla with no AP tech enabled. More detailed information will be publicly available in the near future.

2. Autopilot features, including Traffic-Aware Cruise Control and Autosteer, are SAE Level 2 driver-assist systems, meaning –

a.
Whether the driver chooses to engage Autosteer or not, the driver is in control of the vehicle at all times. The driver is notified of this responsibility, consents, agrees to monitor the driving assistance, and can disengage anytime.

b.
Despite the driver being responsible for control for the vehicle, Tesla has a number of additional safety measures designed to monitor that drivers engage in active driver supervision, including torque-based and camera-based monitoring. We have continued to make progress in improving these monitoring systems to reduce misuse.

c.
Based on the above, among other factors, the data strongly indicates our customers are far safer by having the choice to decide when it is appropriate to engage Autopilot features. When used properly, it provides safety benefits on all road classes.

The Washington Post leverages instances of driver misuse of the Autopilot driver assist feature to suggest the system is the problem. The article got it wrong, misreporting what's actually alleged in the pending lawsuit and omitting several important facts:

1. Contrary to the Post article, the Complaint doesn't reference complacency or Operational Design Domain.

2. Instead, the Complaint acknowledges the harms of driver inattention, misuse, and negligence.

3. Mr. Angulo and the parents of Ms. Benavides who tragically died in the crash, first sued the Tesla driver—and settled with him—before ever pursuing a claim against Tesla.

4. The Benavides lawsuit alleges the Tesla driver “carelessly and/or recklessly” ���drove through the intersection…ignoring the controlling stop sign and traffic signal.”

5. The Tesla driver didn’t blame Tesla, didn’t sue Tesla, didn’t try to get Tesla to pay on his behalf.  He took responsibility.

6. The Post had the driver's statements to police and reports that he said he was “driving on cruise.” They omit that he also admitted to police “I expect to be the driver and be responsible for this.”

7. The driver later testified in the litigation he knew Autopilot didn’t make the car self-driving and he was the driver, contrary to the Post and Angulo claims that he was mislead, over-reliant or complacent. He readily and repeatedly admitted:

a.
“I was highly aware that was still my responsibility to operate the vehicle safely.”

b.
He agreed it was his “responsibility as the driver of the vehicle, even with Autopilot activated, to drive safely and be in control of the vehicle at all times.”

c.
“I would say specifically I was aware that the car was my responsibility.  I didn’t read all these statements and passages, but I’m aware the car was my responsibility.”

8. The Post also failed to disclose that Autopilot restricted the vehicle's speed to 45 mph (the speed limit) based on the road type, but the driver was pressing the accelerator to maintain 60 mph when he ran the stop sign and caused the crash. The car displayed an alert to the driver that, because he was overriding Autopilot with the accelerator, "Cruise control will not brake."

More information and background can be found here → https://t.co/VoTuFFkP9D

[litquidity @litcapital]

Goldman Sachs absolutely fleecing their Marcus customers (3.90% vs. 4.15% thru their Apple partnership)

[unusual_whales @unusual_whales]

The calls have centered around Buffett possibly investing in the US regional banking sector in some way, but the billionaire has also given advice and guidance more broadly about the current turmoil.

Read more: https://t.co/hRrBl1am02

[zerohedge @zerohedge]

CPI 0.4% M/M, Exp. 0.4%, Last 0.5%
CPI Core 0.5% M/M, Exp. 0.4%, Last 0.4%

CPI 6.0% Y/Y, Exp. 6.0%, Last 6.4%
CPI Core 5.5% Y/Y, Exp. 5.5%, Last 5.6%

[Cameron Dawson @CameronDawson]

Supercore CPI (Core Services Less Housing) reaccelerates to +0.5% MoM in February vs. +0.36% in January.

[Tasha Keeney @TashaARK]

Surface streets have more frequent accident rates than highways. Adjusting the national average and the "Non Autopilot" rate given in Tesla's Safety Report, a Tesla in FSD looks ~5X safer than a Tesla in manual mode 👀‼️3/10

[Nick Grous @GrousARK]

Yesterday @elonmusk mentioned that Twitter currently monetizes at $0.05 per hour with the goal being $0.20 per hour.

Some may look at the 4x increase as a stretch but I think it could be quite conservative.

Back in 2021 when we looked at hourly monetization rates we estimated social media platforms were monetizing at roughly $0.50 per hour in the US (mostly just Facebook).

I believe Elon was giving a global figure so the goal of $0.20 per hour would be fair given the US monetizes at a much higher rate.

[Jim Bianco @biancoresearch]

3/4

How much did the forward curve shift from Monday's close (red) to right after Powell finished today (green)?

[Soren Iverson @soren_iverson]

iMessage honest ETA

[Davis @DavisMoshier]

Anyone who says he’s not the smartest man on Earth is wrong

[Farzad 🇺🇸 🇮🇷 @farzyness]

Some pretty significant takeaways from @elonmusk Morgan Stanley stream:

- Twitter is EBITDA profitable today and could be cash flow positive starting Q2 2023
- 130M human hours per day at ~$0.05 per hour. Goal is $0.20 per hour
- 99% reduction in CSE searches
- User base is growing with 40% reduction in cloud spent - went from 3 data centers to 2
- Twitter will introduce keyword based advertising, relevant advertising by end of year
- Long term goal of Twitter is to be biggest financial institution in the world. “You’ll see”.
- Twitter is an easier problem than tesla by a long shot. Will take a few years to build out exec team.
- Tesla compact TAM is every human on earth
- Starlink could be a better solution than fiber for worldwide inter connectivity
- Starship orbital test within a month or so. Full and rapid reusability in ~2 years.

$TSLA

[unusual_whales @unusual_whales]

An office landlord tied to money manager Pimco has defaulted on $1.7 billion of mortgage notes, per Bloomberg.

[Davis @DavisMoshier]

Fascinating explanation of the potential implications of the Tesla bot.

You hopping on or getting run over?

[Farzad 🇺🇸 🇮🇷 @farzyness]

The Tesla Bot will be like instantly giving birth to a human that is capable of working faster than the average person, ~24 hours a day, without the need of a salary, health insurance, food, water, or "safe" working conditions.

The cost to manufacture said Bot at scale will likely be significantly less than $20k per unit. If Tesla can make 20m cars per year by 2030, they will likely be able to make 20+ million bots per year at full scale sometime in the future. That means Tesla is introducing to the human population ~80+ million human-equivalent labor units per year, that will be orders of magnitude 'cheaper' than the ~18 year investment we typically have to put into a human.

Most humans work 8 hour days, 5 days a week. Bot can work 24 hours a day, 7 days a week. That's a 4x increase to productivity at least if the Bot works as good as the average human. Assume average pay for a human is $30k per year, for 10 years. That's $300k in wages alone. A Tesla Bot at ~$20k will be ~95% "cheaper" than a human and able to produce 8x more over the same time period. That's a pretty severe step change in labor economics.

The big question becomes - what price will Tesla sell these for? If it's affordable by most people, then you will have a dynamic where folks will use the Bot to free up their time to better pursue things that make them happiest.

If it isn't affordable by most people, you will have few numbers of folks capable of monopolizing physical labor with little incentive to share the gains they would get from such insane productivity increases.

Which outcome is more likely? @elonmusk would love to pick your brain on this. $TSLA

[Jim Bianco @biancoresearch]

This is how we get a wage/price spiral.

[The Rock Trading Group @The_RockTrading]

No prior S&P 500 bear market in history has made a new low after making 18 consecutive closes above its 200-day average $SPY

[Davis @DavisMoshier]

Deflation indicators📈🤷

[unusual_whales @unusual_whales]

Recession confirmed?

[Davis @DavisMoshier]

Will it work? Probably

Is that a problem for employers? Potentially

[Cameron Dawson @CameronDawson]

What a difference a few weeks makes...
The bond market has gone from being much more dovish than the Fed in end January, to now expecting a higher terminal rate than the Fed's median dot for 2023. Note there are still cuts priced into the 2H23, but much less (~20 bps vs. ~50 bps in Jan)

[Charlie Bilello @charliebilello]

With 84% of companies reported, S&P 500 Q4 GAAP earnings are down 29% year-over-year, the 3rd straight quarter of negative YoY growth and the largest decline since Q2 2020. $SPX

[Market Rebellion @MarketRebels]

OpenAI says it is working to reduce biases in the ChatGPT system, via Bloomberg