Summarizer

It seems tough culturally. If you look at it from an outside point of view, right now Tesla is worth $1.6T, Waymo is worth $130B, and GM is worth $72B. If Cruise were actually a third viable competitor in this race, it would probably be worth more than the rest of GM. Self-driving is just a far more valuable business than car-making. So from that point of view it would make sense to say, don't worry about the rest of GM too much, you should be willing to sacrifice all of that to increase the changes of making Cruise work. It's hard to change the culture at a place like GM though. Does the GM CEO really want to take a huge amount of risk? Would they be willing to take a 50-50 shot where they either 10x the company's value or lose it all? Or would they prefer to pay a few billion dollars to avoid that risk.

Using tesla valuation is not useful. It's a meme stock, has AI bs overvaluation over it. It's value is completely unconnected from reality. The car business is declining steadily. It's a good day when the famous CEO doesn't do something incredibly destructive to the brand name. It's just going down. At the same time, if Musk went away, the stock would crash back to reality but a non-idiot leader could just do impossible, crazy, hard stuff, like ... working on obvious new models and basic steady improvements. Tesla PE is 398 today (after a drop). Toyota's PE is 13. Toyota at the least is not hemoraging market share, sales, revenue, profits. Tesla is losing on all thoes things. Tesla would need a 30x price reduction to get down to much much more stable and profitable toyota. It's gets worse because Tesla's sales and profit keep going down each quarter. There's no doubt value in self driving but the overall value is questionable. If there are many companies providing it, and at least waymo is doing great, plus there are many many other companies in China in good shape, the value multiple won't be there. What's the market value of all taxi compannies combined in the us? It was about $230 billion in 2024 ( https://www.skyquestt.com/report/taxi-market ). Will tesla get 100% of the us self driving business in the future? No, waymo at least will be a serious market competitor, tesla's service doesn't really work. Because there are going to be muiltiple competitors with working products (we'll see if/when tesla ever gets there), Tesla's huge valuation will never make sense. Robots are much farther behind than robotaxis (there's no brain, no prototype of a learning system, maybe one day). This got way too long, I think GM just saw it as a money sink. I think that was a big mistake, though.

This is a business with winner-take-all characteristics. Cruise was unlikely to leapfrog Waymo. So it makes the case for continuing to throw money at this very unconvincing. Cruise was always destined to be "like Waymo, but worse". Tesla, on the other hand, is taking a very different path than Waymo, they have a chance at beating Waymo at their own game and even if they don't beat Waymo, they can be a winner in some specific niche. (For the record, I'm a fan of Waymo.)

What, why? There's no winner-take-all aspect to shuttling people around. Taxi service is a commodity and taxis-without-drivers will also be a commodity. The switching costs for users are essentially zero. That's how we get Uber, Lyft, DiDi, Grab, Bolt, WeRide, BlackWolf...

I don't know how you can write that list and come to the conclusion that it's not winner-take-all. In their home market (US), Uber is ~75%, Lyft is ~25%, and all other competitors are sub-1% combined. Didi is similarly dominant in China, and so on. "Completely different markets have different winners taking it all" does not counteract the claim of winner-takes-all in any way, nor does listing utterly insignificant players like BlackWolf. Do you think people saying "winner-takes-all" in business contexts mean literally one company with 100% marketshare globally?

I think his companies succeeded despite Elon. Tesla should be a $5T company and he fucked it up.

Stongly disagree. I don‘t like the fella but thinking that he founds and successfully manages SpaceX and Tesla to their market value _by chance_ is ridiculous.