August 5, 2025 • 32 mins
It was an expensive week for Tesla. On Friday, a jury in Miami found the electric car company 33% to blame for a deadly 2019 crash involving its full self-driving feature, ordering it to pay a total of $242.5 million in damages. A few days later, the company’s board said it would dole out a $30 billion stock payoff to co-founder Elon Musk in order to keep him focused on the company, which has been bouncing from crisis to crisis.
In this episode of Elon, Inc., host David Papadopoulos is joined by Bloomberg Elon Musk reporter Dana Hull, Bloomberg Businessweek’s Max Chafkin as well as Missy Cummings, an academic and former senior adviser for safety at the US National Highway Traffic Safety Administration who was called as an expert witness during the trial. Together, they discuss the possible consequences for the company flowing from the verdict, with Cummings warning it’s yet another roadblock for fully self-driving cars. Papadopoulos, Hull and Chafkin also discuss that monster payout to Musk.
Later, Papadopoulos, Chafkin and Bloomberg News reporter Kiel Porter discuss Porter’s latest story on The Boring Company, Musk’s largely stalled endeavor to build underground “hyperloops.” Although the tunnel-digging venture recently scored a contract to build a loop connecting Nashville’s airport with its downtown, Porter’s paints a picture of a struggling company that—in true Muskian fashion—promises more than it can deliver.
And the challenges are mounting. All the company has to show for its labors is a small loop that takes people to and from the Las Vegas Convention Center. When asked by Papadopoulos about the company’s falling valuation—now hovering at around $6.4 billion, down from a high of $8.6 billion in July 2023—Porter is direct.
“They were supposed to have 68 miles dug in Vegas. It was supposed to be this huge interconnected lattice, and instead you got less than four operational miles,” he says. “It doesn’t take a genius to look at that and go, ‘why am I investing in this?’”
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:07):
Let me tell you we have a new star.
Speaker 1 (00:10):
A star is born Elan On Mars Juthan Kennemy. He
is the Thomas Edison plus plus plus of our age.
Speaker 3 (00:18):
Probably his whole life is from a position of insecurity.
I feel for the guy.
Speaker 2 (00:22):
I would say ninety eight percent really appreciate what he does.
But those two percent that are nasty, they are our
pay in four fols, we were meant for great things
in the United States of America, and Elon reminds us
of that. I'm very disappointed in Elan. I've helped Elon
a lot. Welcome to Elan and Bloomberg's weekly podcast about
(00:49):
Elon Muskets, Tuesday, August fifth. I'm your host, David Papadopolis. Okay,
so here's this week's show. In three large numbers to
undred and forty three million dollars, thirty billion dollars, and
two point two billion dollars. The first is the amount
of money of Florida jury ordered Tesla to pay the
(01:10):
victims of a crash that took place when a driver
had autopilot engaged. The second is the quote introm Close
quotes Stock Award that Tesla's bord handed Elon yesterday. And
the third is the plunge in the estimated value, perhaps
the least loved of the Musk businesses, the boring Company.
(01:31):
So we have an eclectic cast of characters to bring
you each segment, and we'll start with Elon Inks stalwarts
Dana Hall and Max Chafkin. Hello to you both.
Speaker 3 (01:41):
Hey, David, Hey Dana, Hey guys.
Speaker 2 (01:43):
And we have a special guest, professor Missy Cummings, who's
the director of Mason's Autonomy and Robotics Center at George
Mason University and who was a expert witness in this trial,
to talk about the Tesla autopilot rule link. Missy, Welcome
to the show.
Speaker 1 (02:02):
Thank you for having me.
Speaker 2 (02:03):
Okay, So, Dana, before we do tap into Missy's expertise,
here set the scene for us a little bit. What
happened on that day back in twenty nineteen, and what
exactly did the Florida jury say last week?
Speaker 4 (02:18):
Yeah, so this You know, there are lots of autopilot crashes,
some have gotten enormous media attention, some have not. This
was a crash that occurred in twenty nineteen where the
driver of a Tesla. Basically, he was on hold with
an airline making a phone call, dropped his phone, reached
for his phone, and then managed to t bone a
(02:38):
parked car where a young couple was stargazing, killing the
woman and gravely injuring the man and the driver. You know,
already kind of settled with this family, but the family
sued Tesla. And surprisingly, we've had Tesla in a lot
of court cases, and often they settle before the eve
(02:58):
of trial. But this went to trial in Miami. Missy
was one of the witnesses, and the jury found Tesla
liable not just for damages but for punitive damages, which
I think is significant because even though the driver himself,
you know, testified that he had dropped his phone and
was distracted, the company itself was found liable. And it
was just an extraordinary case on so many measures. I mean,
(03:21):
I was not there in Miami, but you know, Missy,
like you were there, I mean, it was it was
what did you think when when the verdicts came out
and what did you specifically testify about?
Speaker 1 (03:30):
Well, there were several expert witnesses, but my specific area
is AI expertise and then regulatory expertise. Since I had
worked at Nitze for a year, so you know, jury trials,
you just never know. I got a good sense when
I was testifying because the jury was listening and you're
(03:54):
explaining technical concepts and you can see it, you know,
as a professor, I can see somebody check out fast
than anyone. But they were not checked out. They were
paying attention. And I think that they both understood the
technical issues which led to them finding Tesla. You know,
in this case, I think it was thirty three percent liable.
(04:17):
But I also think that the jury understood the punitive
damages were due to Tesla's cover up of a lot
of the data. And I think they got that too.
Speaker 4 (04:27):
Speak a little bit about the cover up of the data,
because that was a really wild thig. I know that
the attorney for the Benavitaz family made like an augmented
video that was based on what they were able to
extract from the onboard computer. And there was a hole
back and forth about did Tesla know that it have
this data or they did they hide it? How significant
was that?
Speaker 1 (04:47):
I mean, it was deleted and we knew we could
see it in the files, but because we were able
to recover it it was undeniable. But we knew that
these augmented videos existed because I had been an expert
witness in other cases where I had seen the annotated video.
This is a video of any crash that they have.
Your car records what's going in in the frontal camera view,
(05:10):
but it also records everything that it sees, and so
we know that this data exists. It exists for every
single Tesla, every single day. And so for Tesla to
try to cover this up, you know, I'm not an attorney,
but I thought it bordered on criminal.
Speaker 2 (05:24):
So they sought to cover it up by saying what that, Oh,
we don't simply don't have it.
Speaker 1 (05:30):
And yeah, they were trying not to give us the data.
And if it hadn't been for the digital forensics person
that we had on this, it would have gone unnoticed.
And why that's critical is we were able to show
what the car saw and what it quote unquote knew
was going to happen. So you know, with several seconds
to spare, the car saw the end of the road
(05:52):
coming and decided to project drivable space into the wilderness.
So it knows that the the road is coming. It
has the map that knows it's coming, but still the
car decided to go ahead and drive in the wilderness.
So even if this other car hadn't been there, the
car would have gone off the road. And indeed that
(06:13):
the computer vision system actually saw a car there and
never alerted the driver and never engaged the emergency braking system.
Speaker 2 (06:23):
Why isn't though Tesla's argument correct though that, and I
believe by the way other juries in the past have
found it to be that, hey, you know, autopilot is
there just to assist you. You are still the driver
and you need to be responsible for your vehicle and
paying attention and not looking for your phone when it
(06:46):
falls on the floor.
Speaker 5 (06:47):
Yeah, well this came up in this case as well
as other ones in the past. Tesla has said that
in court often and perhaps in sort of legal back
and forth. But if you look at the messaging that
the company has employed, and this is part of the
reason why I think the jury and why many people
are sympathetic to some of these drivers who have taken
(07:09):
their eyes off the road while they're using autopilot or
full self driving. You know, we've seen cases of full
self driving also leading to issues, and it's because if
you like, listen to what Elon Musk says. You think
it's better than a human He says it all the time,
and he continues to say it. Part of me thinks
that this case may start to undercut that story, just
(07:32):
because reading the details that came out here are so powerful.
You have, as Missy is saying, a technological system that
is inadequate, and Missy's saying it saw the road.
Speaker 2 (07:45):
But yeah, but in fairness is this technology this is
six years old right from twenty nineteen, missy, Do you
have a sense how much progress their technology is made
from twenty nineteen to today?
Speaker 1 (07:58):
Well, you know, so full self driving is in existence
today and it wasn't a product back then, and you can't.
It's hard to separate out those two because the computer
vision system, for example, that works for autopilot is a
critical part of full self driving, and indeed, they were
using a lot of the data that they were getting
(08:18):
an autopilot mode to inform full self driving mode. What
I will tell you is, as a robotics professor, have
I seen a dramatic leap in capability from twenty nineteen
to twenty twenty five?
Speaker 2 (08:35):
No?
Speaker 1 (08:36):
Indeed, I think that what this case showed me as
an expert. Because I looked at all their testing documentation
or the lack thereof, I got news for you. Self
drive is not happening for them. I've seen under the covers,
and they're just their procedures, processes, what they value, what
(08:57):
they don't value in terms of testing, whther or not
you can do all this shadow testing, I see still
an extremely immature company that just does not know how
to build a safety critical technology. They've been able to
dodge responsibility up to now because the driver was the scapegoat,
but when it's self driving happens, there's no scapegoat. It's
(09:21):
all them.
Speaker 2 (09:22):
So Dan, we've alluded briefly here to the fact that
Tesla pushes back, of course, and they have worked very
hard to do so. What is their exact line, Well.
Speaker 4 (09:33):
Tesla argues that the driver is a fault because he
was distracted, and in their statement they say today's verdict
is wrong and only works to set back automotive safety
and jeopardize Tesla's and the entire industry's efforts to develop
and implement life saving technology. We plan to appeal given
the substantial errors of law and irregularities at trial. You know,
(09:54):
Tesla often blames the driver in these cases. But the
other thing that I think is really important to point
out is this was a unique case in that the
victim here was not the driver or the driver of
another vehicle. It was pedestrians. It was like a young
couple that had pulled over to like look at the stars.
They did not sign up to be part of this experiment.
(10:14):
And that is that is like another whole aspect of this.
So often in crash cases, it's what did the driver
do or not do? But these people were completely innocent.
They were not even in their car, and they had
pulled over to the side. They were not even driving.
It was a stationary object and behind some signs. They
parked behind something thinking that these signs would protect them.
Speaker 1 (10:35):
Yeah.
Speaker 2 (10:36):
Wow, okay, Missy, I was struck by something you said
a little bit earlier. Full self driving isn't happening for
them than being Tesla now. So much of the company's
nearly trillion dollar valuation is predicated on full self driving
happing for them and robotaxi being a thing. So there's that.
(10:58):
But moreover, Missy, there are already these vehicles buzzing around,
these robotaxies buzzing around in Austin and perhaps soon to
be in other cities. Should that worry.
Speaker 1 (11:11):
Us, well, I think it's first of all, really important
words matter here. Full self driving is a product which
is recently had its name change to supervised full self driving,
really because of all these lawsuits. Right, so I'd like
to distinguish between their product full self driving and actual
self driving, which is still not happening for them. They
(11:34):
have robotaxis in Austin, there's a person in the right seat,
there's remote operators, and in some cases we know that
there have been either leading or trailing cars that help
protect the envelope around the car. There's no legitimate self
driving car company that's on the road today with this
(11:55):
amount of babysitting. Look, I'm telling you I'm a robots professor.
Or they're using one sensor, one sensor stream to do everything.
One thing we know in robotics that is a super
bad idea in a stagey critical system, and it won't work.
It just is not going to work. I don't care
what they do with the software. I don't care how
(12:15):
much Dojo is in this. I don't care you know
whether or not he gets a gazillion dollar bonus from
the company. It's not going to happen because technically it
cannot happen for the kinds of systems and the kinds
of speeds that they're operating at. So, you know, be
(12:35):
my guest, but I'm going to put my child through
college on these expert witness fees if they continue, Missy.
Speaker 2 (12:41):
You know, Max and I have something of a running
debate slash feud on the show and off the show
about human drivers versus robot d robotic drivers and what
they can do. Max thinks humans are brilliant drivers.
Speaker 5 (12:55):
I'm not so sure about robots.
Speaker 2 (12:57):
Okay, I'm not so sure about that. Our lifetime's Missy,
will the four of us see a world in which
the robots are driving the vast, vast bulk of our vehicles?
Speaker 5 (13:11):
Now, David, you owe me one hundred dollars?
Speaker 2 (13:13):
No, I don't know.
Speaker 4 (13:15):
I also just want to make the point that, you know,
Tesla really leans into this concept of Tesla Vision is
their system. They've got cameras and this incredible brain. But
I would just like to point out that humans don't
just drive with their eyes and their brain. You use
your ears, You listen to sound. You listen and you
feel the roadway, like driving is a multisensory experience. It's
(13:35):
not just your eyes, that's all.
Speaker 1 (13:38):
Waymou likes to say that they have safer drivers than
human their cars are safer than humans, which is debatable.
But you also have to remember that all these cars
have teams of people from the Philippines watching their every move.
If every single one of us had a remote operation
center watching our every single move, we'd all be better drivers. Right,
(13:59):
So I wish people would stop making that comparison because
it's an Apple's to launches.
Speaker 2 (14:04):
All right, Missy, this was great. You will most certainly
have to come back and join us again.
Speaker 1 (14:10):
Would love to.
Speaker 2 (14:16):
Max Dana more Tesla News. Elon just was handed something
that we're calling an intram pay package. Max, this is
a billion.
Speaker 5 (14:27):
This is a feel good story, I think for all
of us, all of us, Yeah, who just would like
to get paid more money? Elon Musk getting thirty billion
dollars come on over the next two years.
Speaker 3 (14:38):
Having I think over the last couple of.
Speaker 5 (14:41):
Years, anyway, done a questionable job leading Tesla, right, Like
the stock has not done super well. There's been a
swirl of controversies but lawsuits, as we've discussed. But of
course this award is not just about the last couple
of years. It's about this other stock award. The board
is attempting to sort of create a make good on
their pay package from twenty eighteen that was invalidated by
(15:03):
the Delaware court. So though although in some ways it
looks like a guy.
Speaker 2 (15:08):
Being paid for no.
Speaker 5 (15:11):
Clear reason, it's actually an attempt to like recreate some
part of that gigantic pay package that he has yet
to receive.
Speaker 2 (15:19):
Yeah, so of course the ultimate valuation or value will
will be determined by the performance of the stock. But
give or take thirty billion dollars, so he gets this now,
and what if lo and behold in that court case,
they also say yeah you can in the end, all right,
yeah you can have that money. Does he get both packages? No,
(15:40):
he doesn't.
Speaker 5 (15:41):
The way this is written is if they somehow are
able to pay the original pay package, which the valuations
are all over the place because it kind of depends
on the stock price. But I think when we initially
talked about this it was in the fifty billion ish range.
It's it's been worth I think a bit more at
various times. If that package is somehow approved because of
(16:04):
appeals or whatever, then this package would be invalidated. This
is only valid if Elon Musk does not get that
one and he works at Tesla for the next two years,
and then the intent is to give him another giant
pay package for his current work, because again this is
(16:24):
a backwards as we're talking about work that has already
been performed.
Speaker 4 (16:27):
Yeah, this is like an interim pay package to keep
Elon focused on Tesla while the Special Committee of the
board works on a new pay package to incentivize him
going forward. And this is all because you know, the
pay package was invalidated by the judge in Delaware, then
Tesla appealed to the Delaware Supreme Court. That appeal process
(16:48):
is taking forever.
Speaker 3 (16:49):
I think.
Speaker 4 (16:49):
Originally, you know, we all hope that maybe we would
get a resolution to that sometime this year, but it's
still going on. So, like they need to give him
something because from the board's perspective and a lot of
the retail shareholders, they're like, Elon hasn't been paid since,
you know, for years. He deserves to.
Speaker 2 (17:05):
Get Like how is he how is he living and
eating and paying rent back?
Speaker 4 (17:09):
The other thing you remember is that you know, on
the one hand, this is about pay and like giving
Elon ninety six million shares dilutes everybody else. But for Elon,
it's also about control. I mean, he's been very public
about the fact that he's worried about activist shareholders and
he wants more control, and the more shares he gets,
the more control he has.
Speaker 5 (17:30):
But that's kind of a hilarious concern, his concern about control,
given that he effectively controls Tesla today. I mean, yeah,
he only has something like twelve percent of the equity
in the company, But as we've talked about a million times,
he can say whatever he wants and it basically happens.
Speaker 2 (17:48):
Okay, Dan, we will say goodbye to you and we'll
see you next week.
Speaker 3 (17:52):
Thank you.
Speaker 1 (17:59):
All.
Speaker 2 (17:59):
Right Now, Max and I are joined by Kyle Porter,
who covers transport industrials in space for us here at Bloomberg. Kyle,
Welcome to the show.
Speaker 3 (18:08):
Thanks for having me, guys.
Speaker 2 (18:09):
Now, Kyle, you had a really good piece the other
day about the boring Company.
Speaker 5 (18:14):
Max.
Speaker 2 (18:14):
The boring company. You guys were just talking about all
of a sudden boring everywhere, Boring everywhere.
Speaker 5 (18:20):
It's the forgotten Elon Musk Company to stomach scent. Although
here we are talking about it. Uh, this is a
second week in.
Speaker 2 (18:26):
A row, back to back boring. Yeah, So, Kyle, just
to begin at the very beginning here for the uninitiated,
remind us what the Boring Company is and does.
Speaker 3 (18:38):
The Boring Company is a nearly decade old effort by
Musk to reinvent public transportation, in this instance by digging
tunnels in which he will put his teslas underground and
whisk you around without traffic.
Speaker 2 (18:53):
Now, Kyle, I liked your piece quite a bit. In
your piece, titled Elon Musk's Boring Company is Turning into
a nine hundred million dollar flop, begins with a fantastic
anecdote at the beginning there that really sets the scene
and tells us a lot about the state of affairs
there at the company. Right now, tell us about it.
Speaker 3 (19:14):
Yeah, it was September thirtieth. In fact, it was completely unplanned.
Everyone boring factory got told on thirty minutes notice, get
out to the boudego across the road. Elon's doing an
all hands. People were very excited. They hadn't really seen
him on site all year. So they paraded across. Then
Elon spent the next hour talking about why everyone needs
to vote for Trump, how great it's going to be
(19:35):
for SpaceX and its regulatory burden, was asking for ideas
from the crowd, was asking for volunteers, for people to
go to swing states, including Pennsylvania, and then he wrapped
up his talk, took a few more questions, and went
across the SpaceX didn't even bother visiting the factory.
Speaker 2 (19:50):
So how about that, Bax, You don't see the guy forever.
He shows up and let's talk about everything, but what
you're doing day in and day out.
Speaker 3 (19:58):
I mean, here's the thing.
Speaker 5 (19:59):
If it were a normal there would be nothing even
the least bit unusual about that. I'd say. The thing
that is interesting is it really cuts against the Elon
Musk mythology, which is like he's in the factory, he's
personally evaluating the tunnel machines or whatever. And of course
it also the anecdote and the fact that he's just
(20:20):
all he wanted to talk about was politics or whatever
and space Yeah, it emphasizes this idea that like he
started the Boring Company in twenty seventeen and at the
time it kind of seemed like a joke and it's
now Yeah, and now it feels like a joke that
has sort of gotten old or something. Right. I mean,
(20:42):
they just haven't been able to do all that much.
And Kyle's story makes that point. I mean, there's really
just like one actual example of a project, which is
the Vegas Loop, which, for lots of reasons that we
can talk about, you know, has not worked out all
that well, although you know, I guess to the credit
of the boring company, like it's there. You can definitely
go from the Westgate Hotel to like one side of
(21:05):
the Las Vegas Convention Center or another.
Speaker 2 (21:07):
Now, yeah, Kyle, there there is the Vegas thing.
Speaker 3 (21:11):
You said that.
Speaker 2 (21:11):
There's also some test tunnel they did in California. Yeah,
that was the original, the original tunnel. I see. And
how long or short is that one?
Speaker 3 (21:21):
Uh? I think they're looking less than two miles. I'd
have to double tuck.
Speaker 2 (21:25):
Have the length, Yeah, have the length of the vaunted
Vegas Tunnel. Now, in your story, you talk about how
actually a lot of the work, the only work perhaps
by work, I mean actual digging work they're doing, is
underneath Musk's home and his businesses. In Texas. Tell us
about that.
Speaker 3 (21:43):
Oh yeah, it's a little bit internal work. Well, there's
two tunnels currently operation, one of which is the Cyber
trop Tunnel, which, as it sounds, may have cyber trucks
out from the Testi factory. And there's an awful lot
of videos you can go and look at online at
how impressive it is.
Speaker 2 (21:57):
Is it impressive?
Speaker 3 (21:58):
Well, it's impressive that you can fit a slider truck
through it. I mean there is not much in terms
of wiggle room when I decided that tunnel.
Speaker 2 (22:05):
So it's a little bit like selling one of those
ships through the Panama Canal Max. You've kind of been
not very very tight, all right, So you can you
can roll the cyber trucks out of this tunnel. What
else is there is this vaunted network of tunnels there
in Texas too.
Speaker 3 (22:18):
You can walk underneath the road from Boring to say SpaceX,
and they are currently digging a tunnel. When I was there,
you could feel the ground vibrating that's going between X
and SpaceX as well.
Speaker 2 (22:29):
So when you.
Speaker 3 (22:30):
Actually go to that site, there are no sidewalks, there
are no stop signs, there are no pedestrianization. So rather
than just adding some pain, they decided it was much
cheaper and more efficient to dig under the road.
Speaker 2 (22:42):
Okay, now, remind us again where exactly in Texas are we.
Speaker 3 (22:45):
Here bass Drops. You're looking about thirty five minutes outside
of Bustin.
Speaker 2 (22:50):
So Max said, when it was created about a decade ago,
it sort of seemed like a joke, which certainly was
the way I took it.
Speaker 5 (22:57):
I mean, so I said that, and I mean it
sounds like I'm meaning glib, but it literally was a joke.
I mean, Musk was like on Twitter and he was like,
traffic's driving me crazy. I'm just gonna start boring tunnels,
and then he made a series of boring jokes like ah,
they'll be called the Boring Company, ha ha. Now and
it it, it did turn into a real company that
has done a bunch of sort of interesting things. I mean,
(23:20):
the challenge has been that the same essentially, the same
challenge that Musk was trying to address in the first place,
which is like, it's really hard to dig tunnels. You're underground,
you got to move earth, you know. And it turns
out that the industry, I mean, he spent a lot
of time, especially early on sort of criticizing you know,
how slowly tunnel machines work, how slow tunneling is. You
(23:43):
got all these permits and so on, and I don't know.
I mean, you look at the pace, you look at
the number of miles they've gone. It doesn't seem like
they've really improved it.
Speaker 2 (23:52):
They've made it slower.
Speaker 5 (23:54):
Actually I don't know that that's true, but it doesn't
seem like there have been huge improvements. And the other
thing that's sort of interesting Kyle's story points this out
as the thing that I heard as well as like
this machine that they built. Essentially, and Kyle correct me
if I'm getting this wrong, it's just like essentially like
a knockoff of an existing tunnel boring machine, or like
(24:16):
an improvement of an existing tunnel boring machine, which on
one hand, seems like a kind of a far cry
from the kind of you know, usual Musk playbook of
like where you know, inventing things from first principles. The
other thing is it's not very big.
Speaker 3 (24:32):
I mean, like to make these.
Speaker 5 (24:33):
Kind of like world changing tunnels that that Elon Musk
has talked about, you'd want to have like big tunnels
so you could have multiple cars going through and as
Kyle saying, like the tunnels that they've dug so far
are really narrow.
Speaker 2 (24:48):
A cyber truck through. I would mean Kyle was impressed,
shocked to hear a cyber.
Speaker 5 (24:52):
Truck could go through, because I've been in those tunnels
in the Vegas Loop and you could bare it feels
like you can barely fit, you know, a test the
model why through, Like there just isn't that much.
Speaker 2 (25:03):
I mean Texas is you know, everything's Texas size. In Texas,
there are.
Speaker 5 (25:06):
Especially strain tunnels that they've put you know, a road
in the middle of So.
Speaker 2 (25:10):
Kyle tell us about the digging machine, the boring machine, the.
Speaker 3 (25:14):
How do the proof Rock the prof Rock machine, Yes,
that is what it's. The subsecom models have been called
and they have numbers attached to them, and.
Speaker 2 (25:22):
We're up to number five.
Speaker 3 (25:24):
Now, correct five isn't testing six is in the build stage.
Is the latest information that I got. But when you're
looking through this, for example, proof Rock one was just
a test machine. Proof Rock two is in Vegas, although
there's question marks over whether it's still being used. Proof
Rock three is doing tunneling in Vegas. That's the principal machine.
(25:46):
Proof Rock four is drilling underneath in bass Drop between
SpaceX and X, and then five's in testing. So when
they announced that they could start right away in Nashville,
I literally counted up the machines. I'm like, wow, you
don't have any more proof rocks, you know, to pass around.
Speaker 2 (26:02):
You're out of proof rocks, Maxim So, so Nashville is why,
of course Boring came up last week. They apparently have
we can say, have they outright wanted concession to start
digging tunnels.
Speaker 5 (26:14):
I think it's more like there's a plan. It's a
plan than rather Okay, I think I think there's still
some approvals.
Speaker 2 (26:21):
But Kyle, your peace sights that just like we just
saw in Nashville, they've gotten green lights from other places
as well in recent years, or some iteration of a
green light from authorities, but it hasn't actually resulted in digging.
Speaker 3 (26:38):
Yeah, green light's not the best them. I'd say there's
been some flashy announcements of places across the country that
have somehow come to not Chicago was definitely a good
case in point for that. It feels as if Boring
come in and say we can build something quick, we
can build it without you spending a penny and it's
going to make your life so much better now, which
public authority anywhere in the world is not going to
(27:00):
say yes to that. The problem is when you start
digging in, excuse the pun, to a lot of what
Boring is proposing. They're terrible at paperwork, they can't meet
basic bidding criteria. They don't seem in a lot of
cases to have an understanding of international property law.
Speaker 2 (27:16):
Yeah, yeah, Kyle tinterrupt for a second. You have a
great anecdote in the story about a disastrous meeting or
series of meetings they held with officials to Port Authority
of New York. Tell us a little bit about that.
Speaker 3 (27:29):
Well, they still talk about it, people who weren't there
when Boring were doing this, but like, oh yeah, New
York already hurts, you know. Apparently Cuomo set it up,
was friendly with Musk at the time. Officials went into
the room. They wanted to do this incredibly ambitious project
between the city and you know, eventually connecting both the airports,
and within fifteen minutes, the guys of the Porthorio We're
(27:51):
looking at you like these guys don't have a clue,
you know, couldn't tell you the basics of, you know,
how we were going to make this safe from a
fire perspective, how we were going to make it ADA compliance,
you know, for those with disabilities, what the actual process
of buying land in the city looks like. You know,
So everyone just sort of nodded and smiled. I'm sure
(28:12):
if there is no tunnel in New York.
Speaker 5 (28:14):
There's an interesting contrast here with SpaceX because, like Elon Musk,
as he described it actually to me back in twenty seventeen,
why he was thinking this made sense. He saw this
as not that different from SpaceX, right. SpaceX took, you know,
sort of basically existing technology, bunch of rockets that had
(28:34):
been developed largely by the US government, and improving on them,
making them more efficient, more reliable, and then in doing so,
revolutionizing the practice of contracting for rocket launching. He's largely
done that, and he's done that, And so the idea
was why, like it would sort of make sense with boring,
because you have big, heavy machinery, you have made unarguably
(28:57):
like broken contracting process. Now, I think you could argue
it was that the contracting process of something else, But
in any case, you have these famous examples of cities
and governments spending huge sums of money to not dig
very far, and so you could kind of see where
he was thinking. And I think the difference is and
you see it in that Port Authority example, there was
a partner, a government partner for SpaceX who was like
(29:20):
a willing participant who was saying, yes, we want this,
we want you Elon Musk, to try to figure this out,
and that was NASA. NASA was paying him in the
early days of the company hundreds of millions and eventually
billions of dollars to develop this, and there is no
equivalent partner for the boring company, right. They just sort
of bounced between cities and governments and these kind of
(29:41):
interstate authorities like the Port Authority, and no one is saying, hey,
let's invest hundreds of millions of dollars to help you
figure this out. And what's instead happening is Elon Musk
is competing as a normal construction contractor, and it looks
like competing kind of poorly, not necessarily doing a good job,
and it seems to be only able to sort of
get projects where he's dealing with these kind of very
(30:03):
small projects unusual sort of private public partnerships. The Vegas
one is paid for by the Las Vegas Convention Center Authority,
which is a private end So anyway, so I just
think there isn't this like big government partner for the
Boring company. That's the thing they've lacked all along. And
I think obviously Elon Musk doesn't and we've seen it
from his statements over the past few years.
Speaker 3 (30:25):
He's not going out and looking for one of those.
He doesn't seem to value that.
Speaker 5 (30:28):
Even though it made a huge difference in the beginning
of SpaceX.
Speaker 2 (30:32):
Yeah, I just don't know that digging tunnels interest him,
you know, captures his attention quite the way that sending
big efing rockets up into space does. Kyle, I sort
of buried the lead on us here. We are going
to wrap up with the valuation drop, the decline, and
the valuation of Boring as you have it. From one estimate,
(30:54):
it looks like it went from somewhere over eight billion dollars, which,
by the way, max for a joke, eight billion dollar
jokes pretty good to now somewhere in the mid sixes
at a time when most of the other you know,
things at orbit around Tesla I have been soaring. Boring
is sinking, I guess just a sign that this thing
is just kind of sort of going nowhere.
Speaker 3 (31:17):
Yeah, there's no buzz around it, there's no projects around it.
And you were getting on for a decade. Now when
you know, they were supposed to have sixty eight miles
duck in Vegas. It was supposed to be this huge,
interconnected lattice and instead you've got less than four operational miles.
It doesn't take a genius to look at that and go,
why am I investing in this?
Speaker 2 (31:35):
Right? And I suppose if the man Atoptic Company weren't
named Elon Musk, that six billion dollar valuation would even
be a lot less.
Speaker 3 (31:44):
I think that's very safe to say. There's a lot
of companies that tried to reinvent tunneling over the years,
and none of them lasted.
Speaker 2 (31:51):
Okay, Kyle, well we appreciate it. Great story. By the way, everyone,
you go out and read it. It's called Elon Musk's
boring company is turning into a nine high and drew
million dollar flop, which, by the way, gives us yet
another figure to highlight on this week's pod. Thanks again, Kyle,
Thank you guys. This episode was produced by Stacy Wong
(32:18):
and edited by Anamasirakus. Blake Maples handles engineering, and Dave
Purcell fact checks. Our supervising producer is Magnus Henrikson. The
elon Ing theme is written and performed by take Yasuzawa
and Alex Sugiira. Sage Bauman is the head of Bloomberg Podcasts.
A big thanks as always to our supporters Joe Weber
and Brad Stone. I'm David Papadoppolis. If you have a minute,
(32:42):
rate and review our show, it'll help other listeners find us.
See you next week.
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:07):
Let me tell you we have a new star.
Speaker 1 (00:10):
A star is born Elan On Mars Juthan Kennemy. He
is the Thomas Edison plus plus plus of our age.
Speaker 3 (00:18):
Probably his whole life is from a position of insecurity.
I feel for the guy.
Speaker 2 (00:22):
I would say ninety eight percent really appreciate what he does.
But those two percent that are nasty, they are our
pay in four fols, we were meant for great things
in the United States of America, and Elon reminds us
of that. I'm very disappointed in Elan. I've helped Elon
a lot. Welcome to Elan and Bloomberg's weekly podcast about
(00:49):
Elon Muskets, Tuesday, August fifth. I'm your host, David Papadopolis. Okay,
so here's this week's show. In three large numbers to
undred and forty three million dollars, thirty billion dollars, and
two point two billion dollars. The first is the amount
of money of Florida jury ordered Tesla to pay the
(01:10):
victims of a crash that took place when a driver
had autopilot engaged. The second is the quote introm Close
quotes Stock Award that Tesla's bord handed Elon yesterday. And
the third is the plunge in the estimated value, perhaps
the least loved of the Musk businesses, the boring Company.
(01:31):
So we have an eclectic cast of characters to bring
you each segment, and we'll start with Elon Inks stalwarts
Dana Hall and Max Chafkin. Hello to you both.
Speaker 3 (01:41):
Hey, David, Hey Dana, Hey guys.
Speaker 2 (01:43):
And we have a special guest, professor Missy Cummings, who's
the director of Mason's Autonomy and Robotics Center at George
Mason University and who was a expert witness in this trial,
to talk about the Tesla autopilot rule link. Missy, Welcome
to the show.
Speaker 1 (02:02):
Thank you for having me.
Speaker 2 (02:03):
Okay, So, Dana, before we do tap into Missy's expertise,
here set the scene for us a little bit. What
happened on that day back in twenty nineteen, and what
exactly did the Florida jury say last week?
Speaker 4 (02:18):
Yeah, so this You know, there are lots of autopilot crashes,
some have gotten enormous media attention, some have not. This
was a crash that occurred in twenty nineteen where the
driver of a Tesla. Basically, he was on hold with
an airline making a phone call, dropped his phone, reached
for his phone, and then managed to t bone a
(02:38):
parked car where a young couple was stargazing, killing the
woman and gravely injuring the man and the driver. You know,
already kind of settled with this family, but the family
sued Tesla. And surprisingly, we've had Tesla in a lot
of court cases, and often they settle before the eve
(02:58):
of trial. But this went to trial in Miami. Missy
was one of the witnesses, and the jury found Tesla
liable not just for damages but for punitive damages, which
I think is significant because even though the driver himself,
you know, testified that he had dropped his phone and
was distracted, the company itself was found liable. And it
was just an extraordinary case on so many measures. I mean,
(03:21):
I was not there in Miami, but you know, Missy,
like you were there, I mean, it was it was
what did you think when when the verdicts came out
and what did you specifically testify about?
Speaker 1 (03:30):
Well, there were several expert witnesses, but my specific area
is AI expertise and then regulatory expertise. Since I had
worked at Nitze for a year, so you know, jury trials,
you just never know. I got a good sense when
I was testifying because the jury was listening and you're
(03:54):
explaining technical concepts and you can see it, you know,
as a professor, I can see somebody check out fast
than anyone. But they were not checked out. They were
paying attention. And I think that they both understood the
technical issues which led to them finding Tesla. You know,
in this case, I think it was thirty three percent liable.
(04:17):
But I also think that the jury understood the punitive
damages were due to Tesla's cover up of a lot
of the data. And I think they got that too.
Speaker 4 (04:27):
Speak a little bit about the cover up of the data,
because that was a really wild thig. I know that
the attorney for the Benavitaz family made like an augmented
video that was based on what they were able to
extract from the onboard computer. And there was a hole
back and forth about did Tesla know that it have
this data or they did they hide it? How significant
was that?
Speaker 1 (04:47):
I mean, it was deleted and we knew we could
see it in the files, but because we were able
to recover it it was undeniable. But we knew that
these augmented videos existed because I had been an expert
witness in other cases where I had seen the annotated video.
This is a video of any crash that they have.
Your car records what's going in in the frontal camera view,
(05:10):
but it also records everything that it sees, and so
we know that this data exists. It exists for every
single Tesla, every single day. And so for Tesla to
try to cover this up, you know, I'm not an attorney,
but I thought it bordered on criminal.
Speaker 2 (05:24):
So they sought to cover it up by saying what that, Oh,
we don't simply don't have it.
Speaker 1 (05:30):
And yeah, they were trying not to give us the data.
And if it hadn't been for the digital forensics person
that we had on this, it would have gone unnoticed.
And why that's critical is we were able to show
what the car saw and what it quote unquote knew
was going to happen. So you know, with several seconds
to spare, the car saw the end of the road
(05:52):
coming and decided to project drivable space into the wilderness.
So it knows that the the road is coming. It
has the map that knows it's coming, but still the
car decided to go ahead and drive in the wilderness.
So even if this other car hadn't been there, the
car would have gone off the road. And indeed that
(06:13):
the computer vision system actually saw a car there and
never alerted the driver and never engaged the emergency braking system.
Speaker 2 (06:23):
Why isn't though Tesla's argument correct though that, and I
believe by the way other juries in the past have
found it to be that, hey, you know, autopilot is
there just to assist you. You are still the driver
and you need to be responsible for your vehicle and
paying attention and not looking for your phone when it
(06:46):
falls on the floor.
Speaker 5 (06:47):
Yeah, well this came up in this case as well
as other ones in the past. Tesla has said that
in court often and perhaps in sort of legal back
and forth. But if you look at the messaging that
the company has employed, and this is part of the
reason why I think the jury and why many people
are sympathetic to some of these drivers who have taken
(07:09):
their eyes off the road while they're using autopilot or
full self driving. You know, we've seen cases of full
self driving also leading to issues, and it's because if
you like, listen to what Elon Musk says. You think
it's better than a human He says it all the time,
and he continues to say it. Part of me thinks
that this case may start to undercut that story, just
(07:32):
because reading the details that came out here are so powerful.
You have, as Missy is saying, a technological system that
is inadequate, and Missy's saying it saw the road.
Speaker 2 (07:45):
But yeah, but in fairness is this technology this is
six years old right from twenty nineteen, missy, Do you
have a sense how much progress their technology is made
from twenty nineteen to today?
Speaker 1 (07:58):
Well, you know, so full self driving is in existence
today and it wasn't a product back then, and you can't.
It's hard to separate out those two because the computer
vision system, for example, that works for autopilot is a
critical part of full self driving, and indeed, they were
using a lot of the data that they were getting
(08:18):
an autopilot mode to inform full self driving mode. What
I will tell you is, as a robotics professor, have
I seen a dramatic leap in capability from twenty nineteen
to twenty twenty five?
Speaker 2 (08:35):
No?
Speaker 1 (08:36):
Indeed, I think that what this case showed me as
an expert. Because I looked at all their testing documentation
or the lack thereof, I got news for you. Self
drive is not happening for them. I've seen under the covers,
and they're just their procedures, processes, what they value, what
(08:57):
they don't value in terms of testing, whther or not
you can do all this shadow testing, I see still
an extremely immature company that just does not know how
to build a safety critical technology. They've been able to
dodge responsibility up to now because the driver was the scapegoat,
but when it's self driving happens, there's no scapegoat. It's
(09:21):
all them.
Speaker 2 (09:22):
So Dan, we've alluded briefly here to the fact that
Tesla pushes back, of course, and they have worked very
hard to do so. What is their exact line, Well.
Speaker 4 (09:33):
Tesla argues that the driver is a fault because he
was distracted, and in their statement they say today's verdict
is wrong and only works to set back automotive safety
and jeopardize Tesla's and the entire industry's efforts to develop
and implement life saving technology. We plan to appeal given
the substantial errors of law and irregularities at trial. You know,
(09:54):
Tesla often blames the driver in these cases. But the
other thing that I think is really important to point
out is this was a unique case in that the
victim here was not the driver or the driver of
another vehicle. It was pedestrians. It was like a young
couple that had pulled over to like look at the stars.
They did not sign up to be part of this experiment.
(10:14):
And that is that is like another whole aspect of this.
So often in crash cases, it's what did the driver
do or not do? But these people were completely innocent.
They were not even in their car, and they had
pulled over to the side. They were not even driving.
It was a stationary object and behind some signs. They
parked behind something thinking that these signs would protect them.
Speaker 1 (10:35):
Yeah.
Speaker 2 (10:36):
Wow, okay, Missy, I was struck by something you said
a little bit earlier. Full self driving isn't happening for
them than being Tesla now. So much of the company's
nearly trillion dollar valuation is predicated on full self driving
happing for them and robotaxi being a thing. So there's that.
(10:58):
But moreover, Missy, there are already these vehicles buzzing around,
these robotaxies buzzing around in Austin and perhaps soon to
be in other cities. Should that worry.
Speaker 1 (11:11):
Us, well, I think it's first of all, really important
words matter here. Full self driving is a product which
is recently had its name change to supervised full self driving,
really because of all these lawsuits. Right, so I'd like
to distinguish between their product full self driving and actual
self driving, which is still not happening for them. They
(11:34):
have robotaxis in Austin, there's a person in the right seat,
there's remote operators, and in some cases we know that
there have been either leading or trailing cars that help
protect the envelope around the car. There's no legitimate self
driving car company that's on the road today with this
(11:55):
amount of babysitting. Look, I'm telling you I'm a robots professor.
Or they're using one sensor, one sensor stream to do everything.
One thing we know in robotics that is a super
bad idea in a stagey critical system, and it won't work.
It just is not going to work. I don't care
what they do with the software. I don't care how
(12:15):
much Dojo is in this. I don't care you know
whether or not he gets a gazillion dollar bonus from
the company. It's not going to happen because technically it
cannot happen for the kinds of systems and the kinds
of speeds that they're operating at. So, you know, be
(12:35):
my guest, but I'm going to put my child through
college on these expert witness fees if they continue, Missy.
Speaker 2 (12:41):
You know, Max and I have something of a running
debate slash feud on the show and off the show
about human drivers versus robot d robotic drivers and what
they can do. Max thinks humans are brilliant drivers.
Speaker 5 (12:55):
I'm not so sure about robots.
Speaker 2 (12:57):
Okay, I'm not so sure about that. Our lifetime's Missy,
will the four of us see a world in which
the robots are driving the vast, vast bulk of our vehicles?
Speaker 5 (13:11):
Now, David, you owe me one hundred dollars?
Speaker 2 (13:13):
No, I don't know.
Speaker 4 (13:15):
I also just want to make the point that, you know,
Tesla really leans into this concept of Tesla Vision is
their system. They've got cameras and this incredible brain. But
I would just like to point out that humans don't
just drive with their eyes and their brain. You use
your ears, You listen to sound. You listen and you
feel the roadway, like driving is a multisensory experience. It's
(13:35):
not just your eyes, that's all.
Speaker 1 (13:38):
Waymou likes to say that they have safer drivers than
human their cars are safer than humans, which is debatable.
But you also have to remember that all these cars
have teams of people from the Philippines watching their every move.
If every single one of us had a remote operation
center watching our every single move, we'd all be better drivers. Right,
(13:59):
So I wish people would stop making that comparison because
it's an Apple's to launches.
Speaker 2 (14:04):
All right, Missy, this was great. You will most certainly
have to come back and join us again.
Speaker 1 (14:10):
Would love to.
Speaker 2 (14:16):
Max Dana more Tesla News. Elon just was handed something
that we're calling an intram pay package. Max, this is
a billion.
Speaker 5 (14:27):
This is a feel good story, I think for all
of us, all of us, Yeah, who just would like
to get paid more money? Elon Musk getting thirty billion
dollars come on over the next two years.
Speaker 3 (14:38):
Having I think over the last couple of.
Speaker 5 (14:41):
Years, anyway, done a questionable job leading Tesla, right, Like
the stock has not done super well. There's been a
swirl of controversies but lawsuits, as we've discussed. But of
course this award is not just about the last couple
of years. It's about this other stock award. The board
is attempting to sort of create a make good on
their pay package from twenty eighteen that was invalidated by
(15:03):
the Delaware court. So though although in some ways it
looks like a guy.
Speaker 2 (15:08):
Being paid for no.
Speaker 5 (15:11):
Clear reason, it's actually an attempt to like recreate some
part of that gigantic pay package that he has yet
to receive.
Speaker 2 (15:19):
Yeah, so of course the ultimate valuation or value will
will be determined by the performance of the stock. But
give or take thirty billion dollars, so he gets this now,
and what if lo and behold in that court case,
they also say yeah you can in the end, all right,
yeah you can have that money. Does he get both packages? No,
(15:40):
he doesn't.
Speaker 5 (15:41):
The way this is written is if they somehow are
able to pay the original pay package, which the valuations
are all over the place because it kind of depends
on the stock price. But I think when we initially
talked about this it was in the fifty billion ish range.
It's it's been worth I think a bit more at
various times. If that package is somehow approved because of
(16:04):
appeals or whatever, then this package would be invalidated. This
is only valid if Elon Musk does not get that
one and he works at Tesla for the next two years,
and then the intent is to give him another giant
pay package for his current work, because again this is
(16:24):
a backwards as we're talking about work that has already
been performed.
Speaker 4 (16:27):
Yeah, this is like an interim pay package to keep
Elon focused on Tesla while the Special Committee of the
board works on a new pay package to incentivize him
going forward. And this is all because you know, the
pay package was invalidated by the judge in Delaware, then
Tesla appealed to the Delaware Supreme Court. That appeal process
(16:48):
is taking forever.
Speaker 3 (16:49):
I think.
Speaker 4 (16:49):
Originally, you know, we all hope that maybe we would
get a resolution to that sometime this year, but it's
still going on. So, like they need to give him
something because from the board's perspective and a lot of
the retail shareholders, they're like, Elon hasn't been paid since,
you know, for years. He deserves to.
Speaker 2 (17:05):
Get Like how is he how is he living and
eating and paying rent back?
Speaker 4 (17:09):
The other thing you remember is that you know, on
the one hand, this is about pay and like giving
Elon ninety six million shares dilutes everybody else. But for Elon,
it's also about control. I mean, he's been very public
about the fact that he's worried about activist shareholders and
he wants more control, and the more shares he gets,
the more control he has.
Speaker 5 (17:30):
But that's kind of a hilarious concern, his concern about control,
given that he effectively controls Tesla today. I mean, yeah,
he only has something like twelve percent of the equity
in the company, But as we've talked about a million times,
he can say whatever he wants and it basically happens.
Speaker 2 (17:48):
Okay, Dan, we will say goodbye to you and we'll
see you next week.
Speaker 3 (17:52):
Thank you.
Speaker 1 (17:59):
All.
Speaker 2 (17:59):
Right Now, Max and I are joined by Kyle Porter,
who covers transport industrials in space for us here at Bloomberg. Kyle,
Welcome to the show.
Speaker 3 (18:08):
Thanks for having me, guys.
Speaker 2 (18:09):
Now, Kyle, you had a really good piece the other
day about the boring Company.
Speaker 5 (18:14):
Max.
Speaker 2 (18:14):
The boring company. You guys were just talking about all
of a sudden boring everywhere, Boring everywhere.
Speaker 5 (18:20):
It's the forgotten Elon Musk Company to stomach scent. Although
here we are talking about it. Uh, this is a
second week in.
Speaker 2 (18:26):
A row, back to back boring. Yeah, So, Kyle, just
to begin at the very beginning here for the uninitiated,
remind us what the Boring Company is and does.
Speaker 3 (18:38):
The Boring Company is a nearly decade old effort by
Musk to reinvent public transportation, in this instance by digging
tunnels in which he will put his teslas underground and
whisk you around without traffic.
Speaker 2 (18:53):
Now, Kyle, I liked your piece quite a bit. In
your piece, titled Elon Musk's Boring Company is Turning into
a nine hundred million dollar flop, begins with a fantastic
anecdote at the beginning there that really sets the scene
and tells us a lot about the state of affairs
there at the company. Right now, tell us about it.
Speaker 3 (19:14):
Yeah, it was September thirtieth. In fact, it was completely unplanned.
Everyone boring factory got told on thirty minutes notice, get
out to the boudego across the road. Elon's doing an
all hands. People were very excited. They hadn't really seen
him on site all year. So they paraded across. Then
Elon spent the next hour talking about why everyone needs
to vote for Trump, how great it's going to be
(19:35):
for SpaceX and its regulatory burden, was asking for ideas
from the crowd, was asking for volunteers, for people to
go to swing states, including Pennsylvania, and then he wrapped
up his talk, took a few more questions, and went
across the SpaceX didn't even bother visiting the factory.
Speaker 2 (19:50):
So how about that, Bax, You don't see the guy forever.
He shows up and let's talk about everything, but what
you're doing day in and day out.
Speaker 3 (19:58):
I mean, here's the thing.
Speaker 5 (19:59):
If it were a normal there would be nothing even
the least bit unusual about that. I'd say. The thing
that is interesting is it really cuts against the Elon
Musk mythology, which is like he's in the factory, he's
personally evaluating the tunnel machines or whatever. And of course
it also the anecdote and the fact that he's just
(20:20):
all he wanted to talk about was politics or whatever
and space Yeah, it emphasizes this idea that like he
started the Boring Company in twenty seventeen and at the
time it kind of seemed like a joke and it's
now Yeah, and now it feels like a joke that
has sort of gotten old or something. Right. I mean,
(20:42):
they just haven't been able to do all that much.
And Kyle's story makes that point. I mean, there's really
just like one actual example of a project, which is
the Vegas Loop, which, for lots of reasons that we
can talk about, you know, has not worked out all
that well, although you know, I guess to the credit
of the boring company, like it's there. You can definitely
go from the Westgate Hotel to like one side of
(21:05):
the Las Vegas Convention Center or another.
Speaker 2 (21:07):
Now, yeah, Kyle, there there is the Vegas thing.
Speaker 3 (21:11):
You said that.
Speaker 2 (21:11):
There's also some test tunnel they did in California. Yeah,
that was the original, the original tunnel. I see. And
how long or short is that one?
Speaker 3 (21:21):
Uh? I think they're looking less than two miles. I'd
have to double tuck.
Speaker 2 (21:25):
Have the length, Yeah, have the length of the vaunted
Vegas Tunnel. Now, in your story, you talk about how
actually a lot of the work, the only work perhaps
by work, I mean actual digging work they're doing, is
underneath Musk's home and his businesses. In Texas. Tell us
about that.
Speaker 3 (21:43):
Oh yeah, it's a little bit internal work. Well, there's
two tunnels currently operation, one of which is the Cyber
trop Tunnel, which, as it sounds, may have cyber trucks
out from the Testi factory. And there's an awful lot
of videos you can go and look at online at
how impressive it is.
Speaker 2 (21:57):
Is it impressive?
Speaker 3 (21:58):
Well, it's impressive that you can fit a slider truck
through it. I mean there is not much in terms
of wiggle room when I decided that tunnel.
Speaker 2 (22:05):
So it's a little bit like selling one of those
ships through the Panama Canal Max. You've kind of been
not very very tight, all right, So you can you
can roll the cyber trucks out of this tunnel. What
else is there is this vaunted network of tunnels there
in Texas too.
Speaker 3 (22:18):
You can walk underneath the road from Boring to say SpaceX,
and they are currently digging a tunnel. When I was there,
you could feel the ground vibrating that's going between X
and SpaceX as well.
Speaker 2 (22:29):
So when you.
Speaker 3 (22:30):
Actually go to that site, there are no sidewalks, there
are no stop signs, there are no pedestrianization. So rather
than just adding some pain, they decided it was much
cheaper and more efficient to dig under the road.
Speaker 2 (22:42):
Okay, now, remind us again where exactly in Texas are we.
Speaker 3 (22:45):
Here bass Drops. You're looking about thirty five minutes outside
of Bustin.
Speaker 2 (22:50):
So Max said, when it was created about a decade ago,
it sort of seemed like a joke, which certainly was
the way I took it.
Speaker 5 (22:57):
I mean, so I said that, and I mean it
sounds like I'm meaning glib, but it literally was a joke.
I mean, Musk was like on Twitter and he was like,
traffic's driving me crazy. I'm just gonna start boring tunnels,
and then he made a series of boring jokes like ah,
they'll be called the Boring Company, ha ha. Now and
it it, it did turn into a real company that
has done a bunch of sort of interesting things. I mean,
(23:20):
the challenge has been that the same essentially, the same
challenge that Musk was trying to address in the first place,
which is like, it's really hard to dig tunnels. You're underground,
you got to move earth, you know. And it turns
out that the industry, I mean, he spent a lot
of time, especially early on sort of criticizing you know,
how slowly tunnel machines work, how slow tunneling is. You
(23:43):
got all these permits and so on, and I don't know.
I mean, you look at the pace, you look at
the number of miles they've gone. It doesn't seem like
they've really improved it.
Speaker 2 (23:52):
They've made it slower.
Speaker 5 (23:54):
Actually I don't know that that's true, but it doesn't
seem like there have been huge improvements. And the other
thing that's sort of interesting Kyle's story points this out
as the thing that I heard as well as like
this machine that they built. Essentially, and Kyle correct me
if I'm getting this wrong, it's just like essentially like
a knockoff of an existing tunnel boring machine, or like
(24:16):
an improvement of an existing tunnel boring machine, which on
one hand, seems like a kind of a far cry
from the kind of you know, usual Musk playbook of
like where you know, inventing things from first principles. The
other thing is it's not very big.
Speaker 3 (24:32):
I mean, like to make these.
Speaker 5 (24:33):
Kind of like world changing tunnels that that Elon Musk
has talked about, you'd want to have like big tunnels
so you could have multiple cars going through and as
Kyle saying, like the tunnels that they've dug so far
are really narrow.
Speaker 2 (24:48):
A cyber truck through. I would mean Kyle was impressed,
shocked to hear a cyber.
Speaker 5 (24:52):
Truck could go through, because I've been in those tunnels
in the Vegas Loop and you could bare it feels
like you can barely fit, you know, a test the
model why through, Like there just isn't that much.
Speaker 2 (25:03):
I mean Texas is you know, everything's Texas size. In Texas,
there are.
Speaker 5 (25:06):
Especially strain tunnels that they've put you know, a road
in the middle of So.
Speaker 2 (25:10):
Kyle tell us about the digging machine, the boring machine, the.
Speaker 3 (25:14):
How do the proof Rock the prof Rock machine, Yes,
that is what it's. The subsecom models have been called
and they have numbers attached to them, and.
Speaker 2 (25:22):
We're up to number five.
Speaker 3 (25:24):
Now, correct five isn't testing six is in the build stage.
Is the latest information that I got. But when you're
looking through this, for example, proof Rock one was just
a test machine. Proof Rock two is in Vegas, although
there's question marks over whether it's still being used. Proof
Rock three is doing tunneling in Vegas. That's the principal machine.
(25:46):
Proof Rock four is drilling underneath in bass Drop between
SpaceX and X, and then five's in testing. So when
they announced that they could start right away in Nashville,
I literally counted up the machines. I'm like, wow, you
don't have any more proof rocks, you know, to pass around.
Speaker 2 (26:02):
You're out of proof rocks, Maxim So, so Nashville is why,
of course Boring came up last week. They apparently have
we can say, have they outright wanted concession to start
digging tunnels.
Speaker 5 (26:14):
I think it's more like there's a plan. It's a
plan than rather Okay, I think I think there's still
some approvals.
Speaker 2 (26:21):
But Kyle, your peace sights that just like we just
saw in Nashville, they've gotten green lights from other places
as well in recent years, or some iteration of a
green light from authorities, but it hasn't actually resulted in digging.
Speaker 3 (26:38):
Yeah, green light's not the best them. I'd say there's
been some flashy announcements of places across the country that
have somehow come to not Chicago was definitely a good
case in point for that. It feels as if Boring
come in and say we can build something quick, we
can build it without you spending a penny and it's
going to make your life so much better now, which
public authority anywhere in the world is not going to
(27:00):
say yes to that. The problem is when you start
digging in, excuse the pun, to a lot of what
Boring is proposing. They're terrible at paperwork, they can't meet
basic bidding criteria. They don't seem in a lot of
cases to have an understanding of international property law.
Speaker 2 (27:16):
Yeah, yeah, Kyle tinterrupt for a second. You have a
great anecdote in the story about a disastrous meeting or
series of meetings they held with officials to Port Authority
of New York. Tell us a little bit about that.
Speaker 3 (27:29):
Well, they still talk about it, people who weren't there
when Boring were doing this, but like, oh yeah, New
York already hurts, you know. Apparently Cuomo set it up,
was friendly with Musk at the time. Officials went into
the room. They wanted to do this incredibly ambitious project
between the city and you know, eventually connecting both the airports,
and within fifteen minutes, the guys of the Porthorio We're
(27:51):
looking at you like these guys don't have a clue,
you know, couldn't tell you the basics of, you know,
how we were going to make this safe from a
fire perspective, how we were going to make it ADA compliance,
you know, for those with disabilities, what the actual process
of buying land in the city looks like. You know,
So everyone just sort of nodded and smiled. I'm sure
(28:12):
if there is no tunnel in New York.
Speaker 5 (28:14):
There's an interesting contrast here with SpaceX because, like Elon Musk,
as he described it actually to me back in twenty seventeen,
why he was thinking this made sense. He saw this
as not that different from SpaceX, right. SpaceX took, you know,
sort of basically existing technology, bunch of rockets that had
(28:34):
been developed largely by the US government, and improving on them,
making them more efficient, more reliable, and then in doing so,
revolutionizing the practice of contracting for rocket launching. He's largely
done that, and he's done that, And so the idea
was why, like it would sort of make sense with boring,
because you have big, heavy machinery, you have made unarguably
(28:57):
like broken contracting process. Now, I think you could argue
it was that the contracting process of something else, But
in any case, you have these famous examples of cities
and governments spending huge sums of money to not dig
very far, and so you could kind of see where
he was thinking. And I think the difference is and
you see it in that Port Authority example, there was
a partner, a government partner for SpaceX who was like
(29:20):
a willing participant who was saying, yes, we want this,
we want you Elon Musk, to try to figure this out,
and that was NASA. NASA was paying him in the
early days of the company hundreds of millions and eventually
billions of dollars to develop this, and there is no
equivalent partner for the boring company, right. They just sort
of bounced between cities and governments and these kind of
(29:41):
interstate authorities like the Port Authority, and no one is saying, hey,
let's invest hundreds of millions of dollars to help you
figure this out. And what's instead happening is Elon Musk
is competing as a normal construction contractor, and it looks
like competing kind of poorly, not necessarily doing a good job,
and it seems to be only able to sort of
get projects where he's dealing with these kind of very
(30:03):
small projects unusual sort of private public partnerships. The Vegas
one is paid for by the Las Vegas Convention Center Authority,
which is a private end So anyway, so I just
think there isn't this like big government partner for the
Boring company. That's the thing they've lacked all along. And
I think obviously Elon Musk doesn't and we've seen it
from his statements over the past few years.
Speaker 3 (30:25):
He's not going out and looking for one of those.
He doesn't seem to value that.
Speaker 5 (30:28):
Even though it made a huge difference in the beginning
of SpaceX.
Speaker 2 (30:32):
Yeah, I just don't know that digging tunnels interest him,
you know, captures his attention quite the way that sending
big efing rockets up into space does. Kyle, I sort
of buried the lead on us here. We are going
to wrap up with the valuation drop, the decline, and
the valuation of Boring as you have it. From one estimate,
(30:54):
it looks like it went from somewhere over eight billion dollars, which,
by the way, max for a joke, eight billion dollar
jokes pretty good to now somewhere in the mid sixes
at a time when most of the other you know,
things at orbit around Tesla I have been soaring. Boring
is sinking, I guess just a sign that this thing
is just kind of sort of going nowhere.
Speaker 3 (31:17):
Yeah, there's no buzz around it, there's no projects around it.
And you were getting on for a decade. Now when
you know, they were supposed to have sixty eight miles
duck in Vegas. It was supposed to be this huge,
interconnected lattice and instead you've got less than four operational miles.
It doesn't take a genius to look at that and go,
why am I investing in this?
Speaker 2 (31:35):
Right? And I suppose if the man Atoptic Company weren't
named Elon Musk, that six billion dollar valuation would even
be a lot less.
Speaker 3 (31:44):
I think that's very safe to say. There's a lot
of companies that tried to reinvent tunneling over the years,
and none of them lasted.
Speaker 2 (31:51):
Okay, Kyle, well we appreciate it. Great story. By the way, everyone,
you go out and read it. It's called Elon Musk's
boring company is turning into a nine high and drew
million dollar flop, which, by the way, gives us yet
another figure to highlight on this week's pod. Thanks again, Kyle,
Thank you guys. This episode was produced by Stacy Wong
(32:18):
and edited by Anamasirakus. Blake Maples handles engineering, and Dave
Purcell fact checks. Our supervising producer is Magnus Henrikson. The
elon Ing theme is written and performed by take Yasuzawa
and Alex Sugiira. Sage Bauman is the head of Bloomberg Podcasts.
A big thanks as always to our supporters Joe Weber
and Brad Stone. I'm David Papadoppolis. If you have a minute,
(32:42):
rate and review our show, it'll help other listeners find us.
See you next week.
Host
David Papadopoulos
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