Elon Musk Explains Rivian Lawsuit, Tesla Short/Long Term Goals, Succession Planning, Chair Sells Shares, Ford CEO Retires (08.04.20)
Our here and today we were talking about the final part of Elon Musk's three part interview series with automotive. News and then other than that it's been a relatively quiet day for Tesla but we do have a couple other items as well as always I would recommend listening to the full interview in that link will be in the show notes are at all recap this kind of how the interview was structured. So first off, they talked about Musk's future tesla, and if he might take a step back operationally, here's some time soon if you remember the history of Tesla Elon Musk at some. Point had said that that was probably a likelihood for him but a few years back things definitely changed and it seemed like Ilan was all in on Tesla, an envisioned being the CEO running the company for quite a long time. He echoed that sentiment strongly in this interview saying quote I think for some number of years in the future, I will continue to run the company in a way that I think will enable us to make great products that people love and provide those products all around the world and just kind of complete the roadmap that we've laid out for many years and. Line of questioning then centered around if musk was actively succession planning for himself or what sort of looked like for Tesla, he really said that's not something that they're thinking a whole lot about right now that he's thinking about but he has no disillusionment of running tussle forever he said obviously, at some point, he'll become old and infirm as he described and somebody else at that point would obviously need to take over. But the main point here is that it's far off in the future. They also talked a little bit here about organizational structure and management retention on the Structure Yvonne pointed out that it's really important as the company grows to. Reinvent and restructure because what works on a small scale isn't necessarily going to work on a large scale. You likened it to creature as it grows it changes from cells collection of cells to growing organs, nervous system etcetera just like a company may add new parts in collections of people to the company over time. So he mentioned the retention of their top talent has been excellent but over time they have had to restructure which I think carried the implication that it might look a little bit more unstructured or unsettled from the outside, and he also importantly I think this is really important that is overlooked in these arguments get brought up is that Tesla has relentlessly recruited from from both automotive and the technological sectors you on skype is by saying quote, they want some like Tesla Pixie, dust or something and quote hoping that those employees can make their company like Tusla to that led to an interesting conversation on riven. The interviewer asked if Riviera had been poaching tussle employees and about the lawsuit tussle filed against driven for stealing trade secrets a couple of weeks back which we actually uncover on the podcast yet on if that poaching was happening on, Said said, yeah, absolutely of course, and when asked to what extent he said quote I mean it's not like a massive percentage but they definitely have. Taken a bunch of Tesla intellectual property on thumb drives and on computers and stuff. It's not cool dealer Ip and for people to violate their confidentiality agreements and non solicit agreements that kind of thing. So yeah, they were doing bad things. So we sued them unquote. So while we're on the subject, just a little bit more back on that suit Tesla is quote as Tesla now knows ravine instructed one recently departing Tesla employees about the types of Tessa confidential information that review needs both revenue and the employees knew full well, taking such information would violate the employees nondisclosure obligations to Tesla nonetheless, employees expropriated for within the exact information revient sought highly sensitive. Trade secret information that would give ravine a huge competitive advantage and quote the suit details indiscretions from four former tussle employees. The first being a staff recruiter who's manager at Tesla actually left Tesla to work for riven, and then recruited the staff manager while also explaining that ravine did not have the recruiting template structures. Formulas are documents that they would need for their recruiting efforts at which point the Stafford are still working at Tesla downloaded at least sixteen different documents from Tesla things like group interview prophecies, interview training guides, and email them to her personal g mail account as far as the other employees. One was a senior manager of staffing she downloaded. Ten confidential documents with quote detailed information on Tesla's candidate pipeline for senior level operation managers including a detailed internal right up of an executive level candidate and quote, as well as recruiting heat map showing tussles best recruiting sources. The third employee was a manager of environmental health and safety. She also downloaded and exported documents to personal g mail account Tesla says, quote, these documents consisted of highly sensitive trade secret, confidential, and proprietary engineering information about manufacturing project management control specifications for manufacturing equipment specifications, regarding manufacturing robotics, and manufacturing equipment requirements. These documents would be used rarely if at all by siren as a manager of environmental health and safety yet she exported them. Shortly after accepting her offer Iranian and quote the circumstantial implication, there would be that those documents then had been solicited since they were not directly related to this person's job and the fourth employee was a manager charging programs at Tesla left for ravine to become the senior manager for charging development and on the day before leaving Tesla to go driven this employees quote forwarded to his personal email address a list of a highly curated select group of high-level Tesla employees who are experts in the deployment and management of charging networks. Precisely, the type of team riviere needs to deploy its own charging network. The information would allow ravine to target for recruitment the. Members of that group, which is responsible for the selection deployment and management of Tesla's global super charger network and quote I, think at one point ravine seemed like a pretty good candidate to potentially eventually utilize tesla charger network but I think with the investment from Amazon and now this lawsuit especially that last employees on the charging network I would imagine the hopes for some sort of partnership on that for ribian would be pretty minimal at this point as for ribbons point of view they told CNN in a statement quote this suits allegations are baseless and run counter to ravines culture ethos and corporate policies and quote adding quote upon joining Riviere we require. To confirm that they have not and will not introduce former employers intellectual property into Arabian, systems and quote. So we'll just have to wait and see what comes of that next up in the interview was brief discussion on regulatory credits. Lawn didn't have a whole lot to say on this topic but noted the obvious at least two us the tussle would not be able to get these credits if other. Automakers just made electric vehicles that are compelling. It's sort of unfortunate that it is titled. Regulatory Credits on tussles earnings report I think to the uninitiated and in headlines that tends to imply government credits, which is not all the case. There are simply credits being paid to tesla instead of the government because of failure to with government regulations next, they talked about the autopilot naming convention and the pushback that they've. Received in Germany as of late, you on had some choice words on that including ridiculous and idiotic. We've talked plenty about that. So no need to go into too much detail there. The next question was sort of interesting. They ask him what he wanted to accomplish with Tesla by the time he was fifty, which was a bit thrown off by sense that's less than a year from now but he said quote well, I mean, hopefully, we get the I mean from Tesla's standpoint Giga Berlin and Gigi Texas operating next year that would be cool I. Don't know maybe we will be lucky enough to get the cyber truck into production towards the next year that would be cool I don't know if we will succeed or not but that's worth trying and quote I thought the phrasing on that was pretty interesting. Given the fact that Tesla exceeded their model white timelines by about six months and they seem to have adopted and under promise over achieve sort of guidance system. But you'll definitely presented twenty twenty one as sort of that aspirational target for the cyber truck even though that is what it says right now on the website for the Tri Motor variant given the fact that this'll be coming from gigafactory Austin. I'm sure most of US already had level set our expectations accordingly, but it's going to be a new factory, a new production process. So definitely wouldn't expect a model why situation where it comes six months early as in this case, that guidance does seem to be relatively align with tussles internal goals after that the interviewer rephrased that question and said, okay what about by the time you're fifty five years old. You on said quote I. Think we want to have reached volume production in all the products that have been announced and maybe if you haven't and have the company be operating very solid way that is robust that even if I were to die, the company would still do really well for a long time and quote beyond that you on did reiterate without prompt that tesla does aspire to eventually make roughly. Twenty million vehicles per year, Yulon noted that worldwide, the total automotive fleet and operation is about two billion vehicles. So tussle with aspire to turn over one percent of that each year, which will be twenty million per year. Of course that fits with yawns response to the question on TUSLA's Q. One earnings call about maintaining that fifty percent compound annual growth rate. The last couple of topics were on covid nineteen. The impact, their von said that in the US compared to how the situation was handled in. China the regulations have been just a bit more haphazard and randomly applied through different geographies just relying what Yuan set here. I know this political but he said overall, they've filtered through it and the team has done great and there have been no serious issues and then the last topic was whether or not. Anybody ever tells Alano and you said quote people tell me I am wrong all the time and quote adding that I won't directly quote this year. But if you ever want people to tell you, you're a giant pile of something just go on twitter he said that jokingly but obviously, there's some truth to that and then he said really though from a management standpoint, everyone is wrong some of the time. The first mistakes that he would like to correct are the ones that he makes manager should always take the attitude that they are there to serve their team and is not a question of if you're wrong, it's how wrong you are with the goal of becoming less wrong over time. That's something that you'll has mentioned in regards to his optimistic timelines in the past trying to get less wrong overtime last. Couple of quick things here for today Robyn Denholm the chair of the Board for Tesla a few days ago, exercised her rights for about Twenty Six thousand shares of Tessa stock, and then ended up selling those into the market. So you may see some articles about that just to clarify a couple things on that her option for these shares did expire next year. So between now and next August she would. Have had to have exercised when you exercise these stock options that's taxable event. So if you don't sell any of the shares, you have huge tax burden. So generally in a situation like this, the person doing that exercising will at least sell the number of shares to cover that tax burden. But in this case, Denholm home did sal all of them I do believe she still holds other shares and Probably. Other options but I didn't take the time to look into it because personally don't really care all that much about circumstances like this inside herself all the time for all sorts of different reasons. I don't believe it to be a good indicator of future performance, and certainly, if we look back at tussles history, it has not been but if you do want to take the time to do more digging. On her specific positions, there is more information out there. The last thing I would say on this is sales like this are predetermined. So this particular sale was scheduled back in May. Last thing we do have some more executive turnover at other automakers Ford. Today announced that their CEO Jim Hackett will be retiring and their current chief operating officer Jim. Farley will be taking the reins Farley fifty eight has been. With Ford, since two thousand seven, we'll wait and see obviously, but I would imagine this doesn't change the course too much for Ford. All right. That'll wrap it up for today as always. Thank you for listening. Don't forget to subscribe and sign up for notifications also make sure you're following me on twitter at Tessa podcast and I'll see you tomorrow for the Wednesday August fifth episode of Tesla Daily Thank you.