Tesla's AI trainers don't trust its full self-driving tech or safety stats; I appeared on Wall Street Week to discuss Mayor Zohran Mamdani; This Joby Aviation executive is top-notch
1) Reuters just published a devastating article about Tesla (TSLA), which I named as one of my "Stinky Six" stocks to avoid in my October 29 e-mail (since then, it's down 5% versus a 9% jump for the S&P 500 Index)...
The article exposes what I think is massive fraud at multiple levels: on customers, regulators, and investors. It highlights why AI trainers don't trust Tesla's full self-driving ("FSD") technology – or its safety stats:
Tesla CEO Elon Musk says FSD will soon make all Teslas fully autonomous. But interviews with nine former labelers and a former Tesla self-driving engineer show that the technology continued to struggle in recent months to execute basic maneuvers – such as avoiding emergency vehicles or stopping for school buses loading or unloading students.
Despite such dangerous shortcomings, Musk and other executives have increasingly touted FSD's safety as they pushed Tesla to stage public displays of the fully autonomous capability the CEO has promised investors every year for a decade...
FSD is widely regarded as capable of navigating many driving situations, sometimes for long periods. But full autonomy has proven elusive for Tesla and other companies, as it demands flawless execution by the technology – including in the most complex driving scenarios.
The article quotes numerous insiders warning about the dangers of FSD:
Seven of the former data labelers told Reuters they wouldn't trust FSD to drive them. "We have all seen it fail," one said... One veteran self-driving engineer, who reviewed Tesla crash data for years, called its safety claims "bullshit."
"Definitely," the engineer said, "don't trust Elon on this"...
The former employees reported regularly seeing FSD fail at basic tasks, including pulling over for emergency vehicles and giving motorcyclists enough space. Sometimes, they saw FSD-piloted vehicles fail to brake on freeway off-ramps, including a case where a Tesla hit a concrete wall. (The footage, they said, didn't show whether anyone was hurt.) Two employees said clips showed FSD failing to avoid construction zones. In one such incident, a Tesla drove into the zone, nearly striking workers, one of the people said.
Keep in mind what Musk said in 2019: "I consider autonomous driving to be a basically solved problem. We're less than two years away from complete autonomy."
I've said it before and I'll say it again – Musk's recklessness is going to get someone killed:
Inside Tesla, managers carefully controlled access to the videos. Because employees only see clips they're assigned, they may or may not see FSD's worst failures.
One data-labeling team focused on near-misses of pedestrians, three employees said. Known informally as the "trauma team," one source said, these employees worked in Palo Alto, California, with special permissions to view the footage. Engineers closely guarded the trauma-team clips, but some footage would occasionally "slip through" to other teams, the person said.
The person and another employee said they saw clips showing drivers manually taking over at the last second when FSD failed to recognize pedestrians in crosswalks. Two other former employees recalled seeing videos last year of FSD-piloted Teslas nearly hitting children.
It's little wonder that Tesla, unlike Alphabet's (GOOGL) Waymo, doesn't release its full safety statistics:
Waymo also points out shortcomings in its data and collaborates with outside researchers to publish its safety statistics in peer-reviewed journals.
Tesla, by contrast, seeks no peer review and publishes only top-line statistical safety claims while keeping its underlying crash data for Tesla cars secret.
Remarkably, Tesla's stock hasn't moved on this news. Trading at 215 times this year's estimated earnings, it remains firmly at the top of my list of stocks to avoid.
2) I appeared on Wall Street Week three times recently (here, here, and here). I talked about the challenges Mayor Zohran Mamdani faces in closing New York City's budget gap... his mistake in attacking hedge-fund billionaire, Citadel's Ken Griffin, by name... and how Mamdani should be rolling out the welcome mat for any business or wealthy person who wants to be here.
This Bloomberg article quoted some of my thoughts:
New York Mayor Zohran Mamdani spent the week trying to make his budget numbers work. He started out with a $12.6 billion budget gap for this fiscal year and next, something former Jersey City Mayor Steve Fulop (who now runs the Partnership for New City) recognizes as "a real problem." Fulop said that "the problem is that you have a spending problem and less of a revenue problem." But one of the candidates who ran for mayor against Mamdani, Wall Street veteran Whitney Tilson, says "making real budget cuts" will affect "the unions that were among his biggest supporters," which puts the mayor "between a rock and a hard place."
Here's a clip on Bloomberg TV's X account:
3) I've written about electric-aircraft maker Joby Aviation (JOBY) dozens of times (archive here). One of the reasons I like the stock is that Bonny Simi, a longtime friend for more than two decades, is a senior executive at the company.
She has been at Joby for more than five years and is currently director of operations (here's her LinkedIn profile). She's top-notch, so anything she's involved with gets the benefit of the doubt from me.
In this 24-minute interview, she discusses:
What it takes to operate aircraft no one's flown commercially before, why the first time she saw one fly she knew it would change aviation, and what flying for Joby could look like compared to a legacy airline career.
The interview concludes with the sentiment that "seeing is believing" for this technology. I agree, and Joby continues to be one of my favorite speculative stocks.
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.
P.P.S. Greetings from Milan, Italy, where I'm attending the Tech Emotion conference for two days. Then I'm flying to Paris tomorrow to catch some French Open matches. After that, I'll be in Nairobi, Kenya to visit my parents, who are on their way home after nine days of driving ambulances to Ukraine. Here I am in front of the magnificent Milan Cathedral:
