A white Tesla charges up at Superchargers

Breaking down Tesla’s 6+ businesses, comparing them to a traditional car company

Welcome back to my blog, I hope you’ll enjoy this week’s post. I am sharing part of Elon Musk‘s words from the All-In Summit on May 16, 2022. The reason I’m focusing on this in today’s post is that I believe Elon explains what Tesla is in an easy-to-understand way. We are all transitioning away from fossil fuels and into a clean energy future involving solar, wind, battery storage, and electric vehicles.

I believe that after reading this you will be inspired to see the future in a more positive way. So find a cool spot, grab an iced beverage, and enjoy!

A white Tesla charges up at Superchargers
Tesla Supercharging Network [Credit: Tesla]

When Elon Musk spoke at the All-In Summit on May 16, he detailed how Tesla is 6+ businesses. Below is Elon’s response to the question: Could you just explain to people all these companies inside this super-company just so folks have a sense of what had to be done to get here? 

"Okay, I mean this question requires thought and I’ll probably be leaving out quite a few things but if you look and see what does a typical car company do, what they do is they assemble vehicles and they send them to dealers and they manage the supply chain. They might make the engine, they typically will make the engine but most of the parts are made by suppliers and a lot of the actual technology development is done by suppliers, and most of the vehicle software is done by suppliers, so the actual amount of a real work done by car companies - what you think of as GM or Ford - is not actually that much. They don’t do sales, they don’t do service."  

Tesla Sales, Service, Supercharging Network

"So in the case of Tesla for example we do our own sales and service. We don’t have dealerships. Tesla also has by far the biggest network of superchargers, the electric equivalent of gas stations.  We built the entire global supercharger network, which is still the most advanced and by far the best way to charge your car when traveling long distances or if you live in a city and don’t have the ability to charge your car because of street parking or an apartment. We developed the Supercharger network, and we deployed it I think we have around 15,000 superchargers globally.  You can travel anywhere in America right now with the Tesla supercharger network."

Tesla Vertical Integration

"In terms of vertical integration, we make the battery pack, and the power electronics, the drive unit.  We are more integrated into the parts, we actually make so much of the car internally, we’re vertically integrated, not necessarily because we think that there is some religious reason to be vertically integrated, but because the pace we needed to move is much faster than the supply chain could move.  To the degree that you inherit the legacy supply chain, you inherit the legacy constraints including their speed, cost, and technology."

Tesla Software, Hardware, Artificial Intelligence

"Tesla is as much a software company as it is a hardware company.  The software that runs in a Tesla operates the car, operates the screen, does the charging, and all of that stuff is developed by Tesla. And so we have sort of a ‘Tesla OS’ in the car." 

“Very importantly, Tesla has built an autopilot AI team from scratch that is the best real-world AI team on earth and if anyone else has got a better one I’d like to see it demonstrated in a car.” 

"The full self-driving beta at this point very often can take you with zero interventions across the Bay Area from San Jose to Marin so through complex traffic it’s really quite sophisticated and I invite anyone to join the beta or look at the videos of those who are in the beta.  We’ve got like 100,000 people in the beta so it's not tiny.  We’ll be expanding the beta to about a million people or on that order by the end of the year."  

Tesla Chip Team

"We also built a chip team because there wasn’t the hardware that we could run the friggin AI on. We couldn’t just fill the trunk with a whole bunch of GPUs.  That would’ve been very expensive and take massive amounts of power and cooling just to do what Tesla designed full self-driving computer can do." 

“We started chip team from scratch and it was the best in the world and still is the best in the world several years later.”

Tesla Dojo Supercomputer

"We’re also designing a dojo supercomputer to be able to process all video that's coming in from billions of miles of data, because, just sort of like the way that its critical to compete with Google because they have so much data and they have all the people doing searches all the time and humanity is training it.  The same is true of Tesla.  You really need billions of miles and ultimately tens of billions of miles of training data combined with sort of a vast training computer and then optimize inference hardware in the car and state of the art AI in training, and specialized software across-the-board to be able to achieve a full self-driving solution."  

Tesla Insurance

"Insurance is quite significant.  The car insurance thing is a bigger deal than it may seem.  A lot of people are paying 30% to 40% as much as their lease payment for the car in car insurance.  The car insurance industry is incredibly inefficient because to put it this way, you’ve got so many middle entities from the insurance agent all the way to the final set of reinsures each taking a cut."  

“The car insurance thing is a bigger deal than it may seem.”

"It's all very statistical so that even if you are a very good driver, you could be like 20 years old and a great driver but it's all statistical so you either can’t get insurance or it's extremely expensive.  Tesla allows for real-time insurance based on how you actually drive the car.  If you drive the car in a safer way you actually have lower insurance.  So our insurance is based on how you actually drive not how historically people fit your demographic drive and you close the loop around your insurance rate by simply driving better and looking at your score and lowering your insurance in real-time and people do it.   It actually promotes safer driving."

A Brief Summary

Elon Musk highlighted why Tesla is unlike any other company involved in vehicle production.  He spoke about the importance of Tesla Sales, Service, and the Global Supercharging Network.  Tesla’s vertical integration model, as well as Tesla Software, Tesla Hardware, Chip Team, and Tesla AI are unprecedented.  Tesla’s Dojo Supercomputer work will serve to usher in an age of vehicle autonomy.  Tesla Insurance is also an integral part of why Tesla is so unique.  The insurance allows for younger (and also older) drivers a rate based on how they actually drive.  The All-In Summit was a good opportunity for people to hear Elon speak, and to consider being “all-in” for Tesla!

The All-In Summit was hosted by Chamath Palihapitiya, jason@calacanis.com, David Sacks, and David Friedberg. You can follow Jason Calacanis on Twitter and be one of his Besties!

Elon Musk talks at All-In Summit. [Photo credit: Juilian Hosp]

When I bought my Model 3 in 2019, I joined a community of many people who love Tesla. Every time I drive my Tesla around my hometown Austin, Texas, I’m reminded of the extraordinary effort that is put into making Tesla succeed. In January 2022, I started this blog to write positive things about Tesla and Elon Musk. I’m thankful to Johnna Crider for supporting and encouraging me to start this blog. 

You can read more about Tesla Insurance here and you can read about how Tesla owners feel about full self-driving here. Thank you!  

Gail Alfar, [Edited by Sarah Alfar] Exclusive to What’s Up Tesla – All Rights Reserved. May 21, 2022

Is a Tesla Worth it? Does Tesla Insurance and Maintenance Cost Less?

Black Tesla Model 3 by Zack @BLKMDL3 [used with permission]

Every car looks promising when it is sitting on the dealer’s lot. It’s nice and clean, begging you to hop in and take a drive.

Getting started in life as a young person can seem like a vicious cycle when a car is involved.  There’s a circle of making payments and sinking money into insurance payments, not to mention the nightmare that happens when your car needs repairs. Since gasoline prices are spiking, combustion engine cars cost a lot to operate.  On the other hand, electric cars are becoming more common because they cost little to operate.

If you absolutely have to own a vehicle, then there is no better choice right now than a Tesla.  I’ll argue this statement in this blog today based on the low cost of Tesla insurance, the ease of charging the battery, and zero maintenance. 

Tesla Insurance is low cost

Tesla Insurance, which is based on real-time driving behavior, is available in Arizona, Illinois, Ohio, and Texas [Virginia and Oregon soon]. Real-time driving behavior means that the monthly rate you pay for insurance will drop lower if you drive safer, and will increase if you drive less safe. Tesla will help you drive safer, through their app and your usage of the vehicle’s autopilot software that comes with every car.

California has a different kind of Tesla Insurance, and it is not based on real-time driving [but this may change, each state has complicated laws].

Tesla insurance usually costs less than $100 a month, with the likely probability that it will decrease in price. Or, it could increase based on your driving habits.  

I am unsure what you expect to pay monthly, but I was paying about $250 a month before I got Tesla Insurance.  I thought I had a good rate until I experienced the kindness of Tesla.  

Old fashioned style insurance companies cannot compete with the low price of Tesla Insurance.  The antiquated way is to charge you more based on your age instead of your ability to drive carefully.

Charging a Tesla is low cost

Your Tesla, if you decide to get one, costs much less to charge than what you would pay to fill a combustion engine’s tank up with petrol.  

I am not going to give specific overall dollar amount averages in my argument. Instead, I will explain what I pay. Since I charge at home, I do see a small increase in my electric bill.  I set the charge time to when electricity rates are low.  I don’t notice more than a $25 increase in my monthly bill since I got the Tesla.  Supercharging my Tesla away from home costs anywhere from $15 – $20 for a full charge.

Maintaining a Tesla is also low cost

My Tesla has an electric motor that requires no maintenance.  There’s a saying among Tesla owners, that annual maintenance costs are about $7 [cost of windshield wiper fluid].  Conversely, people pay a lot to maintain a combustion engine as there are so many moving parts, valves, and coolant needs.

My own view is that when you need to get your first car, there really is no better car to buy than a Tesla. Here is a brief comparison of Tesla versus combustion engine car:

TESLACOMBUSTION
insurance costs much less in some statesinsurance based on your age, costs are high
avoid the gas pumpsubject to high gas prices
no maintenancescheduled maintenance and constant repairs
A comparison of the costs of owning a Tesla versus a combustion engine car.

Overall, owning a Tesla is less expensive than owning a combustion car. This issue is important because your vehicle is one of the biggest purchases you will ever make so it needs to be one of the best you can get.  

Why I wrote this article and who I wrote it for

A few nights ago, I signed up for Tesla insurance.  I was really happy with the significant rate reduction Tesla gave me.  My teenage kid was also happy.  She explained to me that her friends are just starting out with jobs and their first cars.  She told me they have constant car expenses like insurance [big one], gasoline, and huge maintenance bills [one car needed a whole new engine].  She asked me to consider blogging in a “style that might help her friends believe they could afford a Tesla.” 

Interested in what people think about Tesla Autonomy? You can check that out here.

Red Tesla Model 3 by Vlad Tchompalov on Unsplash

Main header photo of Black Tesla Model 3 by Zack @BLKMDL3 [used with permission].

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Gail Alfar, Edited by Sarah Alfar. Exclusive to What’s Up Tesla – All Rights Reserved. March 19, 2022