Walt, this week I headed out to the Permian Basin doing field work. While I was out in the Permian Basin, no service until I got to a Starlink location. Thanks, Elon, for that—it worked really well. Well, what does Tesla do? They go unsupervised in Dallas. They go unsupervised in Houston. Well, they do that. What happens? Avride puts up a post on X: we've got 200 vehicles. And then on the Mobileye earnings call you listened into, there were some interesting commentary with quite a few—I'll use the term interesting quotes there. How do you want to start? How do you want to break it down, because there's a lot to uncover this week.
Let's start in the Permian Basin. You know, only on the Road to Autonomy and Autonomy Markets do we hit the road, constantly reporting direct from the field on what we're learning about the autonomy. And I apologize to our listeners for what might be a gravelly production today.
Gravelly productions is a great segue. Well, you must be taking acting classes at Juilliard for this one, because that was a great segue there. The Permian Basin is a hostile environment. The roads are gravelly. They've got potholes the size of Cadillacs, and it is a hostile environment to operate autonomous trucks. And when I was there, Kodiak was very kind to host me, to take me to meet their partners, Atlas Energy Solutions. And it was a cool walk. I got to see the Dune Express. It is a 40-mile fully autonomous sand conveyor belt that goes across two states, Texas and New Mexico. Really cool there. And I got to go inspect the Kodiak depot. I got to see the trucks running autonomously—no safety attendant in the trucks, no safety engineer on these roads where you can't even put your arms out, the vehicles run so close. Really, really impressive operation. And when you're there watching autonomous trucks operate in this hostile environment, you come away with a new appreciation for what Kodiak's truly building.
Did you see any Aurora trucks when you were out there in the Permian Basin, Grayson?
Did not see any Aurora trucks. What I did see, which was interesting—and this is a term used in the Permian basin, this is not a derogatory term—mercenary trucks. Because of the recession in freight, you're getting individuals, humans, that are going into the Permian and they are taking their traditional over-the-road trucks and driving them like this and just destroying their trucks. That was really interesting to see. But no, I did not see any Aurora trucks at the wellhead, at the sites. I did not see anything. I know the Permian's vast, so I don't want to say that I was in the location they were deployed, but I did not see any in the locations that I was in across multiple states.
Did you see Billy Bob Thornton or any Taylor Sheridan bunk houses when you were in the Permian Basin?
Unfortunately, I have some bad news on this one. I had to ask everybody. I go in there, 'How's Billy, Bob? What's it like?' 'Sir, that's all fake.' And boy, the land men that work out there told me how fake and inaccurate the story is. But my good friend Dan Goff from Kodiak did spend a night at a man camp. You have to ask him about that experience—I'm not going to give the story away. He stayed in a man camp. Myself and Pete Bigalow, famously known for the Bigalow battle, we stayed in a hotel. But Dan Goff stayed in a man camp, so you have to ask him that story.
So, give us a sense of why Kodiak is important for Atlas in this setting, and like what the mix was of their trucks versus seeing human-driven trucks. And did you have any conversations with any of the human truck drivers on what they thought about seeing these driverless Kodiak trucks in that setting?
The reason—the primary reason why Kodiak's operating there—and a lot of credit goes to Atlas Energy Solutions' leadership team; the leadership team at Atlas Energy Solutions is absolutely fantastic in how they think about this. And we need to put this into perspective here for the audience. When you leave Midland, Texas, the last stop is Permian High School. Why do I highlight Permian High School? That is the real home of Friday Night Lights, the 1988 book that became a famous movie. So after you go by Friday Night Lights, you're going an hour and a half, hour 45 minutes, to Kermit, Texas. Why am I bringing that up? That's the home of Roy Orbison, where Roy Orbison was born. And then you're going another two plus hours to get out to the oil fields, to the patch. So you're doing long distances. These roads are very narrow. They're very dark. And unfortunately the nickname is Death Highway. And when you're going out to the Permian—and a lot of credit goes to Pete Bigalow for this—you see roadside memorial after roadside memorial after roadside memorial. And then after these individuals are working 16 hours and not staying in a man camp and coming back into some sort of civilization, unfortunately there are a lot of head-on collisions. So that was really sad to see.
And getting back to Atlas and why—the work environment is hostile. Getting individuals to get out there is very difficult. The average shifts are two weeks on, one week off in the patch. And in order for Atlas to scale their business, they have to automate. That's why they built the Dune Express. That's why they partnered with Kodiak, because they cannot get drivers. There is a fundamental lack of drivers or individuals that want to work in this hostile environment. And it is hot, it's windy, it's dusty, and there's nothing around. You can't go to the movies, there's nothing to do.
Might be one of the things to do. But just to be clear, I called it a bunk house, not a man camp. Although every time you say man camp, I think it's kind of funny. So maybe that's—for our listeners, anytime Grayson says 'man,' you do a shot of tequila. Start the podcast over and hit a shot of tequila every man-camp reference. Should we move on?
No. Prepare to get drunk on this one. So I thought this was a joke about man camps. I landed at the Midland airport and there is a sign: upgrade your man camp for $50 to stay in non-brand sheets. There's bring-your-own-beer, but then there's bring-your-own-sheets. The man camp, you have to bring your own sheets. So there you go: man camp. Man camp. Man camp. Take a shot. Take a shot. Take a shot. But all without digressing, I saw dozens of vehicles, got to inspect the Kodiak depot, and got to see how Atlas is scaling this operation. And for the audience, just for clarification, Kodiak does not own these assets. They do not operate these assets. They're owned and maintained by Atlas Energy Solutions. And the vehicles, the whole mixed fleet, you're starting to get to an inflection point, which I believe at some point in the near future they will go fully autonomous. Every vehicle there that Atlas is operating at that head, it was really truly remarkable to see what they're doing.
I mean, last time I was at Kodiak, they were talking about expanding some of the functionality in terms of like, you know, the truck pulling in to have the sand drop versus maybe a handoff to a human and then moving locations. How are they progressing to expand that opportunity for them with Atlas?
So it was really kind—Don Leopard, who runs operations for Kodiak, took me there. So right now the truck comes, it comes down this wall and it goes into a dedicated lane. A human takes over and then it goes manually under to get filled up with the sand, and then it goes back to a launchpad. They are, according to Don Leopard—not Don Bernett. Hi, Don. Leopard and Bernette—they are, I would say, this is my assumption, by the end of the year, if not sooner, because Atlas has approved it for the technology to go. So it's, I think, just a matter of time, from what I saw and what they explained to me and the way it's working, because it's all automated now for the whole system. So I would say by the end of the year, it's probably going to be sooner. But that's just what I'll say.
Well, hopefully they flatten out these—I guess you would call them sand holes. I don't know. Like, it's not really a pothole, right? But sand holes so that as it's approaching the drop point, the truck's not wobbling or hitting one of those massive—is it a pothole? Like, what do they call them there?
I call it a manhole, not to be confused with man camp. But [laughter] drink again. When you're going to get filled up with sand, that is some of the only permanent infrastructure, because that's where the sand dune express ends. That is paved. That's a grade operating just like you're over the road. It's when you come out of there, up the hill, is when you hit the holes.
Okay, let's move on. What else do we have this week?
Tesla's operating on roads without holes—at least big holes. They went driver-out in Dallas and Houston. And it's funny, you see all these headlines: 'Oh, Tesla launches, then shuts down.' And our good friend David Moss, friend of the show, he put on his inspector hat. He went out there and did inspections. They're operating, they're scaling. What do you make of Tesla bringing on two markets this week of unsupervised robotaxi?
Yeah. I mean, I was surprised, and I was surprised by them, you know, basically just going in and out. But we'll see. I don't know if this is the new standard. It's certainly possible. We're not talking about a ton of cars, right? Obviously a handful of cars. But this could be the new standard where they don't even bother putting that safety attendant in as they launch new markets. How many vehicles would you expect to see over the markets as they go?
The original plan, Grayson, was 12 markets by June 30th, I think. On this earnings call, you know, there's been kind of a change on that. So you're probably going to see some slippage on that as they're under development. There's probably another five markets that are queued up shortly. Again, I would expect, you know, a handful of rides or like we've seen in Austin and obviously early Houston and Dallas. And then at some point, as they address some of these edge cases and safety, all of these markets will, I think, probably ramp at the same time. But I think the 12 markets by June 30th, probably not going to hit that milestone. They'll probably slip into the third quarter.
I agree with the slippage. I view it as a positive signal, a positive step, but as you clearly said, it's not at scale yet. But Tesla is clearly preparing for scale, because the line that you and I toured at Giga Austin, Cybercab started coming off the line. So they're clearly getting ready to scale into multiple markets. You know, when we did that tour and we sat in front of that thing—which you can see in the video on the Tesla Twitter account, where it's going through these lights, where it's actually getting checked there—I was like, is this really—basically where you take people to show off, you know, Giga Texas, or is this really where the car is coming? And sure enough, they lit—and at the time they told us, 'Yes, this is where they come out, and yes, in April they're going to come off the production line.' And sure enough, they show the video in that exact location where we were standing, where we sat in that car and checked out the wireless charging and everything else. So that was kind of fun to see that.
The other thing, obviously, that we saw there is the space where the additional Cybercab lines are going. And I think that's an important point that you talk about. Obviously, these Cybercabs do not have steering wheels, right? So this is specifically for robotaxi. So they're kind of plowing forward here. I mean, they asked about the 25 billion of capex, which is higher than the 20 billion of capex—not shocking given the state of AI. I think it's probably going to go even higher in future years, because a lot—there's not a big chunk of that investment that is the capitalization of these Cybercabs. That's going to take them time. They'll ramp this production. They're going to add that additional line where we saw the space for it. They'll get the additional equipment. There'll be another line of Cybercab there, and they'll be cranking these things out. So to me, like that 20, 25 billion of capex is probably going up next year. And the same thing on the AI side of things—like you think they're going to spend less on compute next year? Like that seems, given how I'm using Claude more than ever, that seems hard to believe. So that'll be pretty capital intensive on that side of the business. But to get back to Cybercab, yeah, it's ramping, and it was great to see video and see these things come off the line. And frankly, I think we're going to see them on the streets pretty soon.
I agree with that. And over time, when we were there at Giga, we discussed this over dinner—that Tesla's manufacturing could become a competitive advantage over time, because as we saw, they have a very stern culture, focus on cost, and that could become a huge competitive advantage. The thing that I still can't wrap my head around: how they allow that individual to fly the drones over Giga Texas all the time. That I can't figure out. But I do have a clear understanding that they want to cut costs and scale this.
So, Grayson, I think you put your inspector hat on again this week and you've found something that I think is very interesting. Well, I was back in Pennsylvania this week charging at my favorite Tesla charging station, because there's a Chinese restaurant there that makes exceptional Peking duck. But you know, we've asked about—they have all these superchargers everywhere. Will they convert them? And I think you've identified that rather than converting, it looks like they're doing new purpose-built superchargers. What did you find?
I was able to uncover some permit filings using the proprietary AI algorithm I wrote for Autonomy AI, is that Tesla has filed for 56 permits for Version 4 superchargers in Chandler, Arizona—which will—and they're very clearly marked 'not for public use' in the permit, which signals to me that Tesla is getting ready to build dedicated robotaxi charging infrastructure. On one of our first trips to Austin, you and I discussed, 'Oh, they're going to use public charging.' Based on that filing, it appears that they're going to create dedicated charging. But it's not just that filing that we uncovered. It was also a filing from Mesa, Arizona, for a second private charging depot. We do not have an exact number on the number of chargers. Interesting to note that they're in different ones—one's in the north, one's in the south—and they are to the east of downtown Phoenix. This clearly says Tesla's getting ready to make the Phoenix metropolitan region a big market using dedicated infrastructure. As Tesla expands to new markets, or ramps up Dallas, or ramps up Austin, we're going to have to go look for filings to see if Tesla gets in the depot game. All signs point to it, but we're going to have to continue to watch those filings.
56 is a crazy number of stalls if it's in fact for one location. I don't know if that's true. I guess it's at an industrial lot, so possibly. Yeah, I mean, it's kind of amazing. So I guess I give you a little of my own clappy hat for your AI engine. Maybe this is where you should insert one of those advertisements that you do with that great movie phone voice: 'Welcome to Road to Autonomy AI.' [laughter] That was a great five.
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Thanks, Walt. Here goes the Walt clappy-hat segment. It seems that every time there is a segment—and I have to credit my wife for the voice. My wife was the inspiration in designing the voice. So my wife was the designer for the voice. Got to give her credit there.
So, is your wife, is she the inspiration for the voice because she has a deep movie phone voice, or is she—
Oh, well, you're a sneaky guy. No, she's very well cultured. She's very well cultured. You're all sneaky. This is not the Rocky Horror Picture Show. You're sneaky.
