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Next Up for Tesla’s Elon Musk: Robots and Self-Driving Cars

Tesla Also Plans More Production of Cybertrucks

Tesla CEO Elon Musk spoke about the future at a grand opening party at the company's new factory in Austin, Texas, on April 7. (Tesla)Tesla CEO Elon Musk spoke about the future at a grand opening party at the company’s new factory in Austin, Texas, on April 7. (Tesla)

Elon Musk, Tesla’s CEO and the world’s richest person, has just opened his new factory to make vehicles fueled by electricity in Austin, Texas, and is already talking about what’s next: new products including a Tesla robot as well as self-driving cars and taxis.

The autonomous vehicles and a humanoid robot called Optimus that can do mundane tasks are all essential elements of sustainable energy goals like the cars built at the new factory, according to Musk. He added that Tesla plans to expand its full self-driving software to North American customers this year.

Cars without drivers will “transform society,” Musk said at a grand opening party showcasing the factory. “The car will be able to take you anywhere you want, ultimately 10 times safer than if you were driving it yourself. It’s going to completely revolutionize the world. This is one of those things that comes along very rarely.”

As for robots: “Anything humans don’t want to do, Optimus would do it. It’s going to be an age of abundance,” he said.

Musk, sporting a black cowboy hat, spoke about his goals for about 30 minutes Thursday night at the event Tesla dubbed a “Cyber Rodeo” that featured the first deliveries of Tesla electric vehicles manufactured in Texas.

He also discussed another important part of Tesla’s goals for sustainability: building factories close to a critical mass of Tesla customers because, he said, making cars without having to ship them overseas benefits the environment.

“You want to build the cars where the customers are,” Musk said. “It’s going to be way better to build the cars locally.”

Choosing Texas

Tesla started building the Austin factory in 2020 after choosing the Texas capital over Tulsa, Oklahoma, as the location for its next major U.S. automotive factory. The company bought about 2,500 acres in East Austin, about five minutes from the Austin-Bergstrom International Airport and about 15 minutes from downtown Austin, for the factory and for what turned out to be its new headquarters. Musk announced Tesla’s headquarters relocation from Palo Alto, California, to Austin in 2021.

“California is great and we’re continuing to grow in California, but we ran out of room,” Musk said at the event. “We need a place where we could be really big, and there’s no place like Texas.”

Tesla received millions of dollars in tax incentives from local government entities to locate its factory in Austin. Musk, who topped Forbes’ 2022 list of the world’s richest people with a net worth $219 billion, well ahead of Amazon’s Jeff Bezos, who was second on the list at $171 billion, also personally relocated from California to Texas during the pandemic.

The Austin factory is 15 city blocks long and if it was vertical, it would stand 3,826 feet tall, taller than the Burj Khalifa, the world’s tallest building in Dubai, United Arab Emirates, that is 2,722 feet tall, Musk said. The Austin factory has 10 million square feet of floor space and is Tesla’s first factory where all critical parts of the manufacturing process are under one roof, including making the battery packs.

The Austin factory is “the machine that builds the machine,” Musk said. “This is the largest factory in the world, by volume. The factory is the product.”

Tesla’s completed new factory and headquarters in Austin, Texas. (Tesla)

Musk said the Texas factory would eventually be the highest-producing vehicle factory in the United States. Tesla has delivered 1 million cars worldwide over the past 12 months, representing about 1% of total car deliveries, but Musk said he hopes to expand the auto manufacturer to deliver about 20% of total vehicles.

“In order to make a difference, a really big difference to sustainability, we have to make a lot of cars … to transition the world to sustainable technology as quickly as possible,” Musk said. “We’re going to move to truly massive scale, a scale that no company has ever achieved in the history of humanity. That has to happen in order to transition the world to sustainable energy.”

Growing Popularity

While electric vehicles currently make up a small percentage of both the number of cars on the road and overall car sales, their popularity is forecast to increase, especially considering the $5 billion of federal investment intended for charging-station infrastructure and ongoing concerns over gas prices. President Biden issued a goal to have at least 50% of new vehicle production be electric by 2030.

Tesla is planning to make 500,000 of its Model Y vehicles a year at the Austin factory, Musk told the crowd. The company is also hoping to start production of the Cybertruck in Texas next year. The Cybertruck, Tesla’s first battery-powered, all-electric truck, was first announced in 2019 but production has been delayed several times. A prototype of the Cybertruck was on stage Thursday night, with the latest version not having door handles.

Tesla cars in the shape of a Texas flag in the parking lot of the grand opening event. (Tesla)

A lot will happen at the Texas factory between now and the end of 2023, Musk said, with a massive wave of new products coming out. Those products include the Cybertruck, the Roadster and the Semi, all of which would begin production in 2023. Semi is a heavy-duty, all-battery powered semi-truck. Tesla announced the commercial vehicle concept in 2017. The Roadster, meanwhile, is Tesla’s all-electric sports car.

The Austin factory is Tesla’s sixth factory. Previously, Tesla made most of its vehicles at its plant in Fremont, California. Other factories are in Sparks, Nevada; Buffalo, New York; Berlin, Germany; and Shanghai, China.

The Austin factory, which has more than 70,000 solar panels on the roof to help power the plant, is expected to make a new battery line that will be the industry’s first structural battery pack produced on-site for vehicles built there, according to a presentation.

“We think, over time, this will probably be the biggest [battery] cell factory in the world,” Musk said.

Commercial April 9, 2022

WeWork’s Adam Neumann Strikes Out on Biggest Deal Yet in ‘WeCrashed’ Episode 6

Coworking Company Leader Tries To Get Softbank to Buy Out Other Investors

Jared Leto plays WeWork CEO Adam Neumann and Anne Hathaway plays his wife. (Apple; Getty Images; Jelena Schulz)Jared Leto plays WeWork CEO Adam Neumann and Anne Hathaway plays his wife. (Apple; Getty Images; Jelena Schulz)

WeWork’s Adam Neumann, as portrayed by Jared Leto in the new Apple+ limited series “WeCrashed,” sprays the contents of a fire extinguisher around his largest investor, Softbank Chairman and CEO Masayoshi Son, on the rooftop of a Mexico City skyscraper.

The incident in the sixth episode comes shortly after the opening of a WeWork shared office site in the company’s 100th city, with Son finally telling Neumann that he was “crazy.” Neumann then unveils to Son a plan he’s formulated after nearly getting pushed out of his leadership position by increasingly skeptical investors, according to the dramatization. But stop reading now if you haven’t seen the newest installment.

The episode is called “Fortitude,” which is how Son describes Neumann’s courage in the face of adversity. In the dramatization, Neumann pitches Softbank on expanding its $4.4 billion investment to buy out WeWork’s other investors, including WeWork’s first backer, Benchmark Capital, in a proposed $20 billion deal that puts the value of WeWork at $47 billion. The deal, as Neumann pitches it to Son, has sticking points such as the co-founder retaining corporate control and preventing Softbank from investing in a WeWork rival. Son ultimately walks away from quadrupling Softbank’s stake in WeWork.

That leaves Neumann in this dramatization to deal with questions from other investors, such as why he had WeWork sign office leases in buildings he personally owned, why he told his real estate team to double the lease terms or up the lease rate to rapidly boost its footprint, or why he trademarked the word “We,” which he then let the company use for $5.9 million.

In watching Neumann’s wheeling and dealing, my real state broker watch pals, Thirty-Four Commercial’s Sarah Hinkley Kennington and Ruth Griggs, could only shake their heads, saying that this isn’t how office leases are done.

“It’s not uncommon for an investor and firm to own its real estate and then lease it, but to not have it disclosed properly is a bigger problem,” said Kennington, founder and partner of Dallas-based Thirty-Four Commercial.

Sarah Hinkley Kennington is a longtime Dallas real estate broker who founded Dallas-based real estate services firm, Thirty-Four Commercial.

Griggs, a senior vice president at the real estate services firm, added that “they were also negotiating at above-market deals, adding to it becoming a potential problem.”

Both Kennington and Griggs remember a time before WeWork had entered the Dallas market, when landlords chased after them hoping to bring what they considered to be a new concept to their doors. The two, who represent landlords in leasing office buildings, would go to New York City to visit WeWork locations and come back to Dallas in hopes of bringing the first WeWork to the city. WeWork finally opened its first location in Dallas in early 2017, at an office tower at 1920 McKinney Ave. in Uptown.

Kennington, who is leading the lease up of Uptown’s newest office tower, The Link at Uptown, said she had to turn away a “big scale” coworking provider at the beginning of the leasing process to initially make way for more creditworthy tenants before signing coworking tenants. The 25-story office tower is roughly 50% leased, with additional leases in the works, she said.

Kennington and her team must make sure those holding the equity behind a newly constructed office building are happy with the risk they are taking with each office tenant. Often that means new space goes to long-term creditworthy tenants such as law firms, real estate firms, and financial services firms. Coworking might come later, she said.

“Landlords are constantly assessing risk with rents so thin the breakeven point for a landlord is only after a few years,” Kennington told CoStar News.

Ruth Griggs is a senior vice president at Thirty-Four Commercial.

For WeWork, the investment was always plenty of tenant improvement dollars — even if they signed at above market terms. In the “WeCrashed” episode, those favorable lease terms helped build a portfolio of 8.9 million square feet of leased office space in New York City, making WeWork the Big Apple’s largest landlord at the time. Kennington and Griggs said the statistic was “shocking,” but it likely didn’t warrant a party — or the subsequent hangover that led to Neumann being in tears at the end of the episode with a wife, played by Anne Hathaway, who couldn’t bring herself to comfort him.

Kennington and Griggs, both mothers as well as real estate executives, said they had never really heard about Neumann’s wife Rebekah’s pet project, “WeGrow,” which took root and became a school despite at least one investor in the episode telling Neumann there’s no money in running a school. Here are two lessons from this week’s episode:

  • Stay in your lane. Once you leave your core competency, it often leads to demise, said Kennington. Griggs adds: “Especially if you are not profitable in that lane to begin with, you should focus on being profitable before you start to grow.”
  • Relationships matter. Between mocking WeWork co-founder Miguel McKelvey to investors as an unsuitable candidate to run WeWork and telling Rebekah she did not help build WeWork, Neumann alienates those closest to him. In the episode, Neumann writes the word “We” on a glass of tequila, then empties it to turn it upside down into the word “Me.”