Tesla's Promises
The company had a bad quarter, but investors are focusing on Elon Musk's promises to deliver on robots, robotaxis, and a cheaper EV model. Should they?
On Tuesday, Tesla reported earnings and they weren't great. The company reported a 9 percent drop in revenue, as well as a $1.4 billion drop in profits. Much of that slump was due to missing its delivery targets as well as a series of price cuts over the past few months.
Despite the bad news, the company's stock price jumped on the promise that Tesla still plans to launch a lower-priced electric vehicle (EV) in the next year. That would, presumably, allow Tesla to sell more vehicles since the company could reach new customers who are leery of the higher price of EVs compared with their traditional counterparts.
Look, Tesla has sold lots of cars. The Model Y, after all, is already the most popular car sold that isn't a pickup truck. Add in the Model 3, and Tesla has not only the two best-selling EVs, but two of the top five best-selling cars, period.
It's not that Tesla isn't able to sell cars. It's that the automaker is pushing up against the limit of the number of customers willing to spend $40,000 to $80,000 on a high-end vehicle. That's just simple math.
Now, the promise is that Tesla will make a low-end, more affordable EV, presumably called Model 2. That promise is important because it's pretty key to Tesla's future. The idea is that it would sell for around $25,000 and appeal to a far wider market of people, most of whom aren't currently driving an EV.
On the other hand, there's some question about whether that vehicle will ever actually ship, or if Tesla's CEO, Elon Musk, is just making the promises investors want to hear. It's not as if Musk has never done that before.
For example, there was the time he promised that Tesla owners could recoup the cost of their purchase by renting out their vehicles as robotaxis. Or the time when he claimed that autonomous driving was coming in a matter of weeks with one more software release.
Musk seems to operate from the principle of "say whatever sounds good and figure out later how to make it true." But the thing about making promises is that if you don't keep them, eventually, you lose out on your most valuable asset: your credibility.
None of this is to say that Tesla doesn't make good cars. I also happen to think that if it made a $25,000 EV, it would sell as many of them as it could make.
The thing is, eventually you have to ship some stuff. Lately, the stuff Tesla has been shipping hasn't been great. Take the Cybertruck. Sure, there are plenty of fans, but I think we can all agree it's divisive. It's definitely not for everyone.
Also, it was two years late, and every Cybertruck the company shipped has been recalled over an issue where the accelerator pedal could get stuck, which seems to be not ideal. The low-cost model is another example. It's hard to know what really happened, but reports as recently as earlier this month suggested the entire product had been canceled. That's apparently not true, but it's hard to know what to believe until something actually ships to customers.
The entire thing is a powerful lesson about incentives. If you're managing for a stock price, you make promises your investors will like. You say things like "we have a product that lots of people will buy and no one can compete with." If that's true, it's not just good for your stock price, it's great for your business.
But Musk seems to make a lot of promises and then cajole people into trying to make them true, or hope everyone forgets when he makes an even more fantastic promise later.
That, ultimately, is Tesla's biggest problem. Its CEO is making promises the company can't keep, instead of just focusing on building the best products it can.
The Best Vision Pro App: Gucci?
I'm not going to pretend like Gucci is my thing. It isn't. As my children can attest, I'm not into fashion, and I don't have the kind of money to spend on any of the things Gucci sells.
So, when I heard a recommendation to download the Gucci app for Apple Vision Pro, I was skeptical at first. I don't know what the point of a fashion brand having an app on a virtual reality headset would be, but, it's a free app, and I have a Vision Pro that I'm trying to figure out different ways to use, so I downloaded it.
When you first open the app, you're presented with a documentary video telling the story of the brand's new creative director, Sabato De Sarno. Again, I didn't know anything about De Sarno, and had never heard of him before watching this video. That, to be clear, isn't the point.
The point is that Gucci invested the time and energy required to build an app for Vision Pro, not to sell you anything, but to tell a story. The video itself is probably what you'd expect from a fashion house making a film about its creative director. And,
What you might not expect is the way Gucci designed the experience of watching the video. When you open the app, you're simply presented with the question "Who Is Sabato De Sarno?," and an option to "Watch now." When you select that option, a normal two-dimensional movie begins playing in a window in front of you. You can even watch the film on MUBI, a subscription movie service.
It doesn't stay that way for long, however.
I'm not going to give away all of the details because--if you have access to a Vision Pro, you should definitely download the free app, and you should definitely watch the documentary. I don't want to spoil it for you.
What I will say is that the Gucci app manages to take advantage of the Vision Pro in a way that few other apps do. It's not like other immersive experiences that surround you with, say, Avenger's Tower or the Iron Throne Room.
I will say that there's a moment when the movie starts to explain the setting for De Sarno's first runway show--a street outside a church in Brera--when you realize that suddenly you've been transported there. The environment around you has faded away and been replaced by that street. It's done in such a subtle, yet convincing way.
At various points, the movie highlights different products, giving you the ability to interact with, and manipulate them. It's all very good. In fact, it's the first app I've used that allows you to manipulate objects directly with both hands.
The most impressive thing is that the entire app is just the video and the surrounding experience. There isn't a store or product pages, and there isn't even a link to a website. It's just the story.
And, as a story, it's incredibly compelling. Honestly, the most remarkable thing about the entire experience is that it made me care about something I very much did not care about. That's the power of storytelling, and Gucci did a great job of using a new format of technology to tell a story to an audience who otherwise might not have paid attention at all.
I know this isn't going to be a reason to buy a Vision Pro, but that's also not the point. The point is that we should want more companies to try more things. We should want them to come up with new ways to tell stories, especially when technology offers compelling opportunities to do just that. Kudos to Gucci for creating the best experience I've seen yet.
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