Category: Technology

Tesla Could Switch Chips By Internally Modifying Software Code that Other Car Companies Had Outsourced

(p. 1) For much of last year, established automakers like General Motors and Ford Motor operated in a different reality from Tesla, the electric car company.

G.M. and Ford closed one factory after another — sometimes for months on end — because of a shortage of computer chips, leaving dealer lots bare and sending car prices zooming. Yet Tesla racked up record sales quarter after quarter and ended the year having sold nearly twice as many vehicles as it did in 2020 unhindered by an industrywide crisis.

Tesla’s ability to conjure up critical components has a greater significance than one year’s car sales. It suggests that the company, and possibly other young electric car businesses, could threaten the dominance of giants like Volkswagen and G.M. sooner and more forcefully than most industry executives and policymakers realize. . . .

Tesla and its enigmatic chief executive, Elon Musk, have said little about how the carmaker ran circles around the rest of the auto industry. Now it’s becoming clear that the company simply had a superior command of technology and its own supply chain. Tesla appeared to better forecast demand than businesses that produce many more cars than it does. Other automakers were surprised by how quickly the car market recovered from a steep drop early in the pandemic and had simply not ordered enough chips and parts (p. 12) fast enough.

When Tesla couldn’t get the chips it had counted on, it took the ones that were available and rewrote the software that operated them to suit its needs. Larger auto companies couldn’t do that because they relied on outside suppliers for much of their software and computing expertise. In many cases, automakers also relied on these suppliers to deal with chip manufacturers. When the crisis hit, the automakers lacked bargaining clout.

Just a few years ago, analysts saw Mr. Musk’s insistence on having Tesla do more things on its own as one of the main reasons the company was struggling to increase production. Now, his strategy appears to have been vindicated.

. . .

“Tesla, born in Silicon Valley, never outsourced their software — they write their own code,” said Morris Cohen, a professor emeritus at the Wharton School of the University of Pennsylvania who specializes in manufacturing and logistics. “They rewrote the software so they could replace chips in short supply with chips not in short supply. The other carmakers were not able to do that.”

“Tesla controlled its destiny,” Professor Cohen added.

. . .

Doing more on its own also helps explain why Tesla avoided shortages of batteries, which have limited companies like Ford and G.M. from selling lots of electric cars. In 2014, when most carmakers were still debating whether electric vehicles would ever amount to anything, Tesla broke ground on what it called a gigafactory outside Reno, Nev., to produce batteries with its partner, Panasonic. Now, that factory helps ensure a reliable supply.

“It was a big risk,” said Ryan Melsert, a former Tesla executive who was involved in construction of the Nevada plant. “But because they have made decisions early on to bring things in house, they have much more control over their own fate.”

As Professor Cohen of Wharton pointed out, Tesla’s approach is in many ways a throwback to the early days of the automobile, when Ford owned its own steel plants and rubber plantations. In recent decades, the conventional auto wisdom had it that manufacturers should concentrate on design and final assembly and farm out the rest to suppliers. That strategy helped reduce how much money big players tied up in factories, but left them vulnerable to supply chain turmoil.

For the full story, see:

Jack Ewing. “Tesla’s Edge in Pandemic: Superior Command of Supply Chain.” The New York Times, First Section (Sunday, January 9, 2022): 1 & 12.

(Note: ellipses added.)

(Note: the online version of the story has the date Jan. 8, 2022, and has the title “Why Tesla Soared as Other Automakers Struggled to Make Cars.”

Silicon Valley Pioneer at Age 16 Survived on 5 Cents of Carrots a Day

(p. A23) Jay Last, a physicist who helped create the silicon chips that power the world’s computers, and who was among the eight entrepreneurs whose company laid the technical, financial and cultural foundation for Silicon Valley, died on Nov. 11 [2021] in Los Angeles.

. . .

Ultimately, he agreed to join the Shockley Semiconductor Laboratory because it sat in the Northern California valley where he had spent a summer harvesting fruit after hitchhiking there from his home in Pennsylvania steel country.

But he and seven of his collaborators at the lab clashed with Dr. Shockley, who later became infamous for his theory that Black people were genetically inferior in intelligence to white people. They quickly left the lab to create their own transistor company. They later came to be called “the traitorous eight,” and their company, Fairchild Semiconductor, is now seen as ground zero for what became known as Silicon Valley.

. . .

With the blessing of his parents — and carrying a letter from the local police chief saying he was not running away from home — he hitchhiked to San Jose, Calif., which was then a small farming town. He had planned on making a little money picking fruit, but he arrived before the harvest began.

Until it did, he lived, as he often recalled in later years, on a nickel’s worth of carrots a day. Whenever he faced a difficult situation, he said in an interview for the Chemical Heritage Foundation (now the Science History Institute) in 2004, he told himself, “I got through that when I was 16, and this is not that bad a problem.”

. . .

Using materials like silicon and germanium, Dr. Shockley and two other scientists had shown how to build the tiny transistors that would one day be used to store and move information in the form of an electrical signal. The question was how to connect them together to form a larger machine.

After using chemical compounds to etch the transistors into a sheet of silicon, Dr. Last and his colleagues could have cut each one from the sheet and connected them with individual wires, much like any other electrical device. But this was enormously difficult, inefficient and expensive.

One of the founders of Fairchild, Robert Noyce, suggested an alternative method, and this was realized by a team Dr. Last oversaw. They developed a way of building both the transistors and the wires into the same sheet of silicon.

This method is still used to build silicon chips, whose transistors are now exponentially smaller than those manufactured in the 1960s, in accordance with Moore’s Law, the famous maxim laid down by another Fairchild founder, Gordon Moore.

For the full obituary, see:

Cade Metz. “Jay Last, 92, Physicist and a Pioneer of Silicon Valley.” The New York Times (Monday, November 22, 2021): A23.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the obituary has the date Nov. 20, 2021, and has the title “Jay Last, One of the Rebels Who Founded Silicon Valley, Dies at 92.”)

The “Adventure” and “Fun” of Driving Cars

(p. B6) For one Monday in early December, the New York Stock Exchange played the role of vintage car museum. At one end of Broad Street, outside the exchange, sat a high-roofed and stately 1921 Duesenberg coupe. At the other, a fearsome 1966 Ford GT40 racecar. Between them, encased in a glass vitrine, was an imperturbably cheery 1967 Porsche 911S.

Shaking hands by the coffee stand was McKeel Hagerty. The chief executive of the classic car insurance company that bears his name, Mr. Hagerty was there to ring the opening bell, and celebrate the first day of trading for his newly public company (HGTY). Later, at a brunch in the Big Board’s boardroom, Mr. Hagerty wielded a ceremonial gavel and said, “This is only just the beginning.”

The origins of Hagerty, the company, are far humbler. It was founded by his parents, Frank and Louise, in 1984, in their basement in Traverse City, Mich., as a boutique insurer of wooden boats.

In the early 1990s, the company began insuring collectible cars. With Mr. Hagerty at the helm, it has become one of the largest indemnifiers of vintage vehicles, with over two million classics on its rolls. The actuarial data necessary to determine repair and replacement costs on these cars has also made it a foremost authority on their valuation.

. . .

Hagerty went public via a SPAC, or special-purpose acquisition company, raising roughly $265 million in the process with a goal of expanding. So, what are Hagerty’s ambitions now? And why did it need to become a publicly traded company in order to achieve them?

“The purpose of the company is to save driving and car culture,” Mr. Hagerty said flatly, as we piloted a zippy, Hagerty-insured 1972 BMW 2002 tii toward the tip of Lower Manhattan. “If we’re going to save car culture, we have to make investments outside of the core business, and really help create a whole ecosystem.” Achieving this lofty goal required hundreds of millions of dollars in additional investment, he said: “That would have been tough for us to afford just as a private company.”

. . .

Outside experts agreed with this assessment of Mr. Hagerty’s vocation. “They encourage driving. Their tag lines all the time are, ‘Drive your cars,’” Mr. Gross said. “In some ways, you think, that’s a little strange for an insurance company. You think they’d want you to drive as little as possible to minimize the risk.” He laughed.

Instead, Mr. Hagerty said he sincerely wants to help people find the pleasure in “the experiential sides” of the automobile, those organized around adventure, preservation, culture and legacy. “I think that if we can help steward along the reasons that people drive and love cars, other than to get from Point A to Point B, then we win.”

Mr. Gross concurred with this plan. “I don’t know how many companies there are that take the long way around. And that’s what Hagerty is doing here. They’re not only selling insurance. They’re trying to make sure that the reason you need that insurance is viable and fun, and lots of people are doing it,” he said. “As a business strategy, it’s pretty smart.”

For the full commentary, see:

Brett Berk. “A Classic Car Insurer’s Vision to ‘Save Driving’.” The New York Times (Friday, Dec. 17, 2021): B6.

(Note: ellipses added.)

(Note: the online version of the commentary has the date December 16, 2021, and has the title “A Classic Car Giant With a Lofty Mission: Save Driving.”)

Bans on Natural Gas for Cooking and Heating Could Most Hurt Low-Income Citizens

(p. A13) This week, New York City moved to ban gas hookups in new buildings, joining cities in blue states like California, Massachusetts and Washington that want to shift homes away from burning natural gas because it releases carbon dioxide, which causes global warming.

Instead, developers in New York City will have to install electric heat pumps and electric kitchen ranges in newly constructed buildings.

. . .

But the gas industry is fighting back and has lobbied in statehouses across the country to slow the shift away from gas. It argues that gas appliances are widely popular and still cost less than electric versions for many consumers. Opponents have also warned that a rush to electrify homes could strain power grids, particularly in the winter when heating needs soar, at a time when states like California and Texas are already struggling to meet demand.

Karen Harbert, president and chief executive of the American Gas Association, an industry group, said efforts to disconnect homes and businesses from the extensive network of gas pipelines would make it difficult to supply those buildings with low-carbon alternatives that might be available in the future, such as hydrogen or biogas.

“Eliminating natural gas and our delivery infrastructure forecloses on current and future innovation opportunities,” she said.

The question of whether to use natural gas in homes has become part of the culture wars, pitting climate activists against industry and other interest groups. Some chefs and restaurant owners have argued that they won’t be able to cook certain dishes as well without gas.

. . .

In a statement, Bill Malcolm, a senior legislative representative at the AARP, said the group had “supported legislative and regulatory initiatives allowing customers to continue to use the fuel of their choice to heat their homes and cook their food.” He added: “Outright bans on certain fuel options would run contrary to that choice.”

. . .

For now, natural gas remains the dominant fuel in much of the country, heating nearly half of American homes. Electric heat pumps, by contrast, satisfy just 5 percent of heating demand nationwide.

. . .

Experts have warned that as more homeowners go electric, gas utilities will still have to pay to maintain their existing network of pipelines, which could mean higher costs for the smaller base of remaining customers, many of whom may be low-income.

For the full story, see:

Brad Plumer and Hiroko Tabuchi. “Gas vs. Electric Stoves Join Partisan Battlefield.” The New York Times (Friday, December 17, 2021): A13.

(Note: ellipses added.)

(Note: the online version of the story has the date Dec. 10, 2021, and has the title “How Politics Are Determining What Stove You Use.” The online version says that the New York print edition had the title “Gas vs. Electric Stoves on a Partisan Battlefield.” My National print edition had the title “Gas vs. Electric Stoves Join Partisan Battlefield.” Where there is a slight difference in wording between the versions, the passages quoted above follow the online version.)

Elon Musk Likes Government the Referee, Not Government the Subsidizer

Here are some especially important passages from the Wall Street Journal transcript of the Elon Musk interview:

Joanna Stern

Well, I want to come back to autonomous vehicles, but wanted to just stay a little bit more on the role of government. You said at this conference, actually, a year ago, that you think the government should really just be hands off when it comes to innovation. Though with this bill, there is a lot of support for EVs and it could be the biggest change that we’ve seen throughout the country in terms of the infrastructure of EVs. And it helps Tesla. What do you think the role of government should be?

Elon Musk

I think the role of government should be that of, like, a referee. But not a player on the field. So generally, government should just try to get out of the way and not impede progress. I think there’s a general problem, not just in the U.S., but in most countries, where the rules and regulations keep increasing every year.

Rules and regulations are immortal. They don’t die. Occasionally you see a law with a sunset provision, but really, otherwise, the vast majority of rules and regulations live forever. And so if more rules and regulations are applied every year and it just keeps growing and growing, eventually it just takes longer and longer and it’s harder to do things.

And there’s not really an effective garbage collection system for removing rules and regulations. And so gradually this hardens the arteries of civilization, where you’re able to do less and less over time. So I think governments should be really trying hard to get rid of rules and regulations that perhaps had some merit at some point but don’t have merit currently. But there’s very little effort in this direction. This is a big problem. Continue reading “Elon Musk Likes Government the Referee, Not Government the Subsidizer”

Higher Demand and Lower Supply Cause Higher Electric Bike Prices

(p. A1) For a glimpse at why inflationary pressures aren’t likely to ease anytime soon, consider the bicycle.

Bike prices in the U.S. and Europe rose sharply at the start of the pandemic because of booming consumer spending and snarl-ups in global supply chains that meant long delays and higher costs for manufacturers.

Now, manufacturers are working on building bikes for 2022 in a continuing environment of economic uncertainty—with more questions added recently by the emergence of the Omicron variant of the coronavirus. Today’s rampant demand and strangled supply are already pushing next year’s prices higher.

“The cost of our product is not going down,” says Richard Thorpe, chief executive of Karbon Kinetics Ltd., which sells Gocycle electric bikes world-wide from its base in Chessington, southern England. “If that is inflation, I wouldn’t call it transitory.”

. . .

(p. A12) Mr. Thorpe resisted pushing up prices for Gocycles in 2021 because he spent a chunk of the year explaining to unhappy customers why supply-chain disruptions meant there would be delays to their orders.  . . .

He says he is pressing ahead with price increases for 2022 because he doesn’t expect these supply-chain issues to get much better. He estimates the cost to the company of producing a single bike has shot up by 20% to 25% compared with the cost before the pandemic, as competition between manufacturers for common parts pushes prices skyward.

Seatpost prices have gone up 20% in the past 12 months. So have prices for the cranks the rider turns when pedaling. Handlebars are up 11%. Brake levers and calipers are up 14%. Chain prices are up 17%, and reflectors are up 50%, according to Karbon Kinetics.

Mr. Thorpe learned by email Wednesday that higher prices for magnesium—used in Gocycle wheels—mean future shipments of wheels will be 17% more expensive than they are now.

Multiple industries are competing for the batteries, semiconductor chips and tiny electronic components Gocycle uses for its dashboard displays, power management systems and charging ports.

. . .

Shipping a container full of parts from China costs him around $20,000, Mr. Thorpe says. It used to cost $4,000. Shortages of pallets and blockages at ports mean he can’t be certain when shipments will arrive. He estimates shipping costs for a single bike have effectively doubled, on average, depending on where exactly it is destined.

The flood of demand for bikes as the pandemic arrived took the industry by surprise, executives say, an example of how unprepared the global economy was for the mass switch in consumption to goods from services as the pandemic forced people to stay home.

. . .

Part of the explanation for consumer demand for bikes is a Covid-19-related trend that is pushing up prices for all sorts of manufactured goods. The pandemic has meant people are less able to spend their income on eating out, overseas travel and other services, so have been splashing out on gadgets and recreational products instead.

Retailers say consumer demand pushing up bicycle prices is still intense. Some bike buyers are seeking ways to avoid traffic or public transport as they return to the regular commute, a trend that is fueling adoption of pricey electric bikes in particular. Some retailers say they are seeing recent converts to cycling upgrade basic models for more expensive rides.

For the full story, see:

Jason Douglas. “Bicycle Makers Offer Clues on the Persistence of Inflation.” The Wall Street Journal (Thursday, Dec. 02, 2021): A1 & A12.

(Note: ellipses added.)

(Note: the online version of the story has the date December 1, 2021, and has the title “Is Inflation Sticking Around? Bicycle Makers Offer Some Clues.”)

Entrepreneur Stewart Butterfield Failed With “Glitch” Before Succeeding With “Slack”

(p. A15) Entrepreneur Stewart Butterfield once tried to build a multiplayer online game but switched to photo sharing, selling Flickr to Yahoo in 2005 for $25 million. Success, but not a home run in Silicon Valley. Mr. Butterfield left Yahoo in 2008 to help found a company called Tiny Speck and build another multiplayer online game called “Glitch.” Persistence! “Glitch” attracted tens of thousands of gamers, but not enough to cover its costs, so Mr. Butterfield killed it in 2012.

Tiny Speck pivoted, which in Silicon Valley means fail and scramble to do something else. The company had built its own crude internal communications system for employees to chat digitally during the development of “Glitch.” Maybe others would use it. Seven months after they started work on Slack, the company announced its preview release. On the first day of the press blitz, 8,000 people requested the preview version. In February 2014 Slack had 16,000 users and by November it had 285,000, with 73,000 paying for it. Now more than 10 million people use it daily. Mr. Butterfield sold Slack to Salesforce for $27.7 billion last year. That’s failing upward!

For the full commentary, see:

Andy Kessler. “INSIDE VIEW; Failure Is Always an Option.” The Wall Street Journal (Monday, Oct. 18, 2021): A15.

(Note: the online version of the commentary has the date October 17, 2021, and has the title “INSIDE VIEW; Failure Was Always an Option for Elizabeth Holmes.”)

Virtual Reality (VR) Used to Better See Cancer Cell Mutations

(p. R3) Chemist and entrepreneur Jackie von Salm recently walked inside a receptor in the brain to inspect a new drug compound. As she looked at the brightly colored, cascading ribbons around her, she noted something: Part of the atomic structure, a series of thick, orange rods and hexagons, jutted toward her in an odd way, suggesting that the compound, a derivative of the psychedelic DMT, might be effective at treating addiction without having hallucinogenic effects.

“This is weird,” says Dr. von Salm, the co-founder and chief scientific officer of Psilera Inc., a Tampa, Fla.-based company working to turn psychedelics into treatments for addiction, neurodegenerative diseases and mood disorders. “But it might be really unique and special.”

The odd positioning of the compound might be the right shape to latch onto serotonin receptors in the brain that are involved with hallucination and addiction. That insight was possible thanks to a technology more closely associated with gamers than scientists: Virtual reality.

Dr. von Salm is one of a growing number of drug-discovery researchers who are using VR to see, in new ways, the molecules they have long studied on computer screens. Their goal is to investigate subtle changes in the distance, shape and chemical properties of atomic structures that could give them clues about how well a drug might work and speed up the drug-discovery process.

. . .

Since 2018, cancer researchers at the University of California San Francisco have been using VR to better understand the genetic mutations in cancer cells that might make a patient resistant to treatment. For example, in VR, it was clear that the reason a drug didn’t bind properly to its protein target in the cancer cell was because of the movement of a portion of the protein called the P-loop. The movement was caused by a mutation in the target.

On a computer monitor, it was difficult to see the tiny change in the movement. “When there are changes like that, the VR is critical,” says Beth Apsel Winger, a hematologist and oncologist at the university’s department of pediatrics.

For the full commentary, see:

Sara Castellanos. “VR Rx.” The Wall Street Journal (Friday, Sept. 10, 2021): R3.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date September 7, 2021, and has the title “Virtual Reality Puts Drug Researchers Inside the Molecules They Study.”)

E.U. Blocks Innovations in Charger Port Technology

(p. B1) The European Union unveiled plans on Thursday [September 23, 2021] to make USB-C connectors the standard charging port for all smartphones, tablets and other electronic devices sold across the bloc, an initiative that it says will reduce environmental waste but that is likely to hit Apple the hardest.

The move would represent a long-awaited yet aggressive step into product-making decisions by the European Commission, the bloc’s executive arm. Apple, whose iPhones are equipped with a different port, has long opposed the plan, arguing that it would stifle innovation and lead to more electronic waste as all current chargers that are not USB-C would become obsolete.

. . .

(p. B6) European Union officials and lawmakers at the European Parliament have been advocating a common charger since 2009, when there were more than 30 charging options on the market, now down to three. They have argued that fewer wires would be more convenient for users and better for the environment, as mobile phone chargers are responsible for 11,000 tons of electronic waste per year across the bloc, according to estimates by the European Commission.

But Apple has also argued that if the European Union had imposed a common charger in 2009, it would have restricted innovation that led to USB-C and Lightning connectors. In a statement, Apple said that although it welcomed the European Commission’s commitment to protecting the environment, it favored a solution that left the device side of the charging interface open for innovation.

For the full commentary, see:

Elian Peltier. “E.U. Aims to Require USB-C Ports.” The New York Times (Friday, Sept. 24, 2021): B1 & B6.

(Note: ellipsis, and bracketed date, added.)

(Note: the online version of the commentary has the date Sept. 23, 2021, and has the title “In a setback for Apple, the European Union seeks a common charger for all phones.”)

AI Algorithms Use Massive Data to Do “Narrow Tasks”

(p. B2) A funny thing happens among engineers and researchers who build artificial intelligence once they attain a deep level of expertise in their field. Some of them—especially those who understand what actual, biological intelligences are capable of—conclude that there’s nothing “intelligent” about AI at all.

. . .

. . . the muddle that the term AI creates fuels a tech-industry drive to claim that every system involving the least bit of machine learning qualifies as AI, and is therefore potentially revolutionary. Calling these piles of complicated math with narrow and limited utility “intelligent” also contributes to wild claims that our “AI” will soon reach human-level intelligence. These claims can spur big rounds of investment and mislead the public and policy makers who must decide how to prepare national economies for new innovations.

. . .

The tendency for CEOs and researchers alike to say that their system “understands” a given input—whether it’s gigabytes of text, images or audio—or that it can “think” about those inputs, or that it has any intention at all, are examples of what Drew McDermott, a computer scientist at Yale, once called “wishful mnemonics.” That he coined this phrase in 1976 makes it no less applicable to the present day.

“I think AI is somewhat of a misnomer,” says Daron Acemoglu, an economist at Massachusetts Institute of Technology whose research on AI’s economic impacts requires a precise definition of the term. What we now call AI doesn’t fulfill the early dreams of the field’s founders—either to create a system that can reason as a person does, or to create tools that can augment our abilities. “Instead, it uses massive amounts of data to turn very, very narrow tasks into prediction problems,” he says.

When AI researchers say that their algorithms are good at “narrow” tasks, what they mean is that, with enough data, it’s possible to “train” their algorithms to, say, identify a cat. But unlike a human toddler, these algorithms tend not to be very adaptable. For example, if they haven’t seen cats in unusual circumstances—say, swimming—they might not be able to identify them in that context. And training an algorithm to identify cats generally doesn’t also increase its ability to identify any other kind of animal or object. Identifying dogs means more or less starting from scratch.

For the full commentary, see:

Christopher Mims. “AI’s Big Chill.” The Wall Street Journal (Sat., July 31, 2021): B2.

(Note: ellipses added.)

(Note: the online version of the commentary has the date July 30, 2021, and has the title “Artificial Intelligence’s Big Chill.” When you click on the title in the search list internal to the WSJ, you get a different title on the page of the article itself: “Why Artificial Intelligence Isn’t Intelligent.”)