Tesla Troubles

Tesla: the company that generates more headlines and top stories than actual motor vehicles despite claiming to be a car company. Last time I covered the company, major shareholders had just approved a super unbelievable compensation package for CEO Elon Musk tied to the company’s total market value, rather than to numbers of vehicles produced or Model 3 orders satisfied or JD Power scores or any number of other metrics by which a car company may actually be adjudged to be a success. Just like in Ford’s case earlier, Tesla’s sole focus is on pleasing shareholders, and it really shows.

The problem for Elon and Tesla is, the hype machine eventually runs out of gas and the company valued more highly than Ford, GM, Fiat Chrysler or any number of actual car companies, will have to face the music eventually for perpetually failing to meet the goals it outlines for itself. And that’s a problem when you consistently set outrageous goals that artificially inflate your stock price. That “face the music” time may be coming soon, because there have been several issues in the past few weeks that deserve mention.

Photo by Jesse Gary, KTVU

First, another fatality. This is Tesla’s third in which Autopilot was engaged when the death occurred, and the preliminary investigation by a law firm representing the deceased’s family has decided that Tesla’s Autopilot misread lanes in the road and drove the man straight into a median, where the car burst into flames and killed the driver. Tesla insists that the crash is the driver’s fault because its system isn’t perfect and requires drivers to pay attention to the road ahead and provide input when prompted, which the driver apparently was and ignored. The National Transportation Safety Board admonished Tesla for releasing details about the crash before its investigation was complete and kicked them out of their investigation process. And yes, this is the second story in a row that involves someone dying because a technology company deployed a system to the public before it was ready.

Simultaneously, Telsa was busy recalling 123,000 early Model Ss because of power steering bolt failures that would render the car still driveable, but requiring considerably more effort. While it’s hardly a rare thing for a car company to issue a recall, its coinciding with reports about the Model 3 needing considerable rework after coming off the assembly line paints a poor picture of the company’s quality control.

Speaking of the Model 3, production has been shut down twice so far this year to address bottlenecks preventing the factory from meeting production goals. In their Q1 investor call, Tesla reported 2,000 Model 3s rolling off the line in the last week before the earnings call, which represents a significant jump over the 1,200 observed in the weeks prior, but remains 20% short of the 2,500 goal Elon set for the company in January. In response to inquiries about the delays, Musk declared that there were no delays, but that deliveries were just experiencing a “Time Shift,” which is basically a way of invoking quantum leap doctor who bullshit to try to explain away your company’s failure. And remember, the 2,500 goal was the re-forecast of a re-forecasted forecast. In addition to the shutdowns to improve efficiencies, Tesla is adding a third shift to their Fremont factory, meaning cars will be produced 24/7 in order to start reaching production goals more effectively.

Of course, another shift means a greater potential for labor issues and Tesla has had plenty of those recently, with the Center for Investigative Reporting, uh, reporting that Tesla has been under reporting worker injuries on legally-mandated reports to make the company’s safety record appear better than it is. The center’s magazine, Reveal, interviewed more than three dozen current and former employees, including ex-safety personnel and have previously been nominated for Pulitzer Prizes for the quality and reliability of their reporting. Tesla’s response? Lies. All lies! In fact, the Center is an extremist organization and pawn being used by the United Auto Workers union to try to influence workers into joining, which Tesla is known to be against, having reportedly fired 700 workers for their pro-union sentiments last fall.

And this is only one salvo in the many Tesla or Musk have launched at news outlets for accurately reporting the news. A recent Economist article suggesting Tesla would need to raise $2.5 to $3 billion this year to meet production goals prompted a tweet from Musk calling the Economist boring and replying that the company would be profitable in the second half of this year, a claim viewed as dubious by many actual economists who sort of know what they’re doing unlike a certain someone.

As a result of all of these issues, Tesla’s stock value has been dropping. And although he claims that he’d forego a salary in order to see the company thrive, it’s not hard to see how a $52 billion carrot dangling in front of you might motivate you to work towards it. The problem is, when your success metric is as squishy as shareholder value, which is based on perception, rather than substance, your focus is not on safety, or fair worker representation or quality, or or even human life. It’s based on what people think of you and your future potential, and all the talking in the world isn’t going to matter if you can’t do the walking, and right now, Tesla is still at a crawl.

Authored by
Devlin Riggs

Headlines for the Week of March 19th, 2018

List time!

Do you like lists? Well we got some lists this week, starting with Consumer Reports, who, uh, reported on the ten new cars most likely to last longer than 200,000 miles. This is, of course, not based on any sort of long-term testing since they're new cars, but rather based on expectations set by old versions of the cars. As you'd expect, the list is entirely comprised of Hondas and Toyotas, with the sole non-Honda/Toyota being the Ford F-150.
Another list we got was from Edmunds of their vehicle brands with the most and least loyal buyers. So did the likelihood that cars will last longer than 200,000 miles correlate with higher brand loyalty? Yep. Toyota and Honda were first and third, with only Subaru coming between them. Also in the top ten non-luxury brands were Ram, Chevy, Hyundai, Kia, Nissan, Ford and Mazda. Jeep just missed out on the top ten, ranking that high probably only due to the popularity of the Wrangler. At the bottom? You guessed it. Dodge, Chrysler and Fiat.

Ford’s Future Sees Several SUVs

Remember the first generation Ford Explorer? The one that had the exploding Wilderness AT tires that caused them to flip over and kill people? Well, one of the reasons that story was news was because SUVs were relatively new and the high center of gravity exacerbated the likelihood of the vehicle flipping in an accident. From that Explorer, we got tougher safety rules for tires, for roof rigidity and for rollover resistance. But what we also got were a whole slew of other SUVs that followed Ford's recipe of building large vehicles built primarily for on-road use. It's surprising then, that one of the pioneers of the SUV movement has fallen so far behind its competitors as the SUV craze heats up again. Ford's existing Escape, Edge, Explorer and Expedition are fine, but don't particularly stand out in an increasingly crowded field.

So Ford is taking action as we've discussed recently, coming out with a new Bronco and now a baby Bronco that promise off-road prowess to those seeking it, while ST versions of most models will inject some sportiness where there currently really isn't any. While other brands go upmarket, Ford is looking to expand to performance niches, which should be attractive to enthusiasts. But Ford also announced this week that it's entering a three year partnership with Indian manufacturer Mahindra to develop some small cars, but interestingly, an electric SUV. Apparently Mahindra will supply the body of the vehicle with the technology that goes inside coming from Ford, who only have a few forays into the electric vehicle realm currently. Its interesting that Ford wouldn't want to use any of their existing platforms for such a development, but perhaps Mahindra just has a chassis that caters particularly well to electrification. In any case, these cross-company collaborations are becoming increasingly common as brands look to reduce costs and expand into new markets.

Musk Makes Mad Money

Despite not accepting a paycheck for his work at Tesla, the company's board and shareholders have generously decided to force one upon him, assuming he meets specific goals related to the company's value in the stock market. The company is currently valued at $56 billion and the bonuses for performance kick in once the company hits $100 billion. If the company becomes one of the highest valued in the world at $650 billion, Musk would earn an incredible $55 billion for himself. As is, he'll have to be content with his paltry $2.6 billion in company stock, which in addition to his existing $20 billion net worth, will probably be enough to keep him warm at night. This comes despite the fact that, yet again, the company is likely going to miss its production targets for Q1 for the Model 3, which still has around 450,000 outstanding orders yet to be filled.

Shareholders and the board also don't seem upset by the fact that many of the new cars coming off the assembly line have to go directly to reworking facilities because the part quality, fit and finish are so poor. Nor does it bug them that things are taking so long because much of the cars are being hand-built while the robots that are supposed to be making them just sort of hang out in Germany. Also not phasing them is the fact that Tesla fired 700 employees in October or the fact that the United Auto Workers union is getting increasingly aggressive with its activities around the Fremont, California facility. Nope, none of this matters because they say that they see a bigger opportunity for long-term value through energy capture, storage and use. Well, unfortunately for them, they're not the only company working in each of those areas, and they certainly aren't the company with the best product in any of them. And in the interest of full disclosure, I do work for a company that produces an energy storage system similar to Tesla's, so I do have an idea of what the competitive marketplace looks like.

LSEV EV is 3DP

It was inevitable. After we heard about Porsche and Bugatti 3D printing parts for their vehicles to improve performance and reduce cost, it was only a matter of time before we saw an entire car made by a 3D printer. Well, that day is today because Chinese company Polymaker has worked with Italian manufacturer X Electrical Vehicle to produce the LSEV, which is almost entirely 3D printed. Obviously things like the chassis, tires and windshield could not be printed for safety reasons, but that's apparently about it in terms of other parts produced normally. They say they've also been able to reduce the amount of plastic parts in the car from 2,000 (which is typical in conventionally produced vehicles) to just 57. Imagine driving a car with just 57 plastic panels on it! Of course this comes at a cost, which is performance. It has just 93 miles of range and only drives 47 miles per hour, making it mildly more effective than a golf cart, which honestly probably has even fewer plastic panels and apparently fewer is better?

Nissan’s Electrified Future

Nissan announced this week a new initiative called M.O.V.E., which is an acronym for "Mobility, Operational Excellence, Value to Customers and Electrification," and which aims to sell a million electrified vehicles by 2022. Of course, "electrified" can mean hybrid or plug-in and not necessarily true electric vehicles, so perhaps the goal isn't that ambitious, but another part of the plan is for 20 models to have autonomous technology. As part of this, they announced the forthcoming Altima would be the third Nissan vehicle to get their Pro Pilot autonomous system, which is pretty basic so far. And that's probably a good thing, given the week autonomous vehicles have had.

Accord to Cheap Out to Sell Out

Fresh off a redesign that has it looking uglier in almost every respect than its previous generation, the Honda Accord now features a hybrid model that uses the company's tried and true system of pairing a 143-horsepower four cylinder with a 181-horsepower electric motor to somehow combine and create only 212 horsepower. Impressively, the trunk space isn't hindered at all by the battery, which probably means there's no spare tire. Also impressive is the fact that the new Accord Hybrid costs a whopping $4,000 less than the outgoing one. The reasons for this, to me, are many. First, the new hybrid is actually less efficient than the old hybrid, averaging just 47 MPG in the city. Second, just look at it, with its awkward chrome unibrow-looking front end and Volvo knock-off rear with its incomplete styling lines and random chrome. It's an ugly car. I used to really like the Accord, but this really changes all that. Also, sedan sales are dropping like a stone and the Accord, usually a best seller in this class, is stagnating on dealer lots. As of the beginning of this month, dealers averaged a 103-day supply of Accords, which are normally so in-demand they can be hard to find. The problem is so bad that some dealers have canceled orders for new Accords and others are asking Honda to come up with some generous incentives for leases just to get them out of their inventories. And it's still not a bad car, it's winning acclaim for its performance from many news outlets. But man, just look at it! I suspect many buyers are, and that's the reason they're still sitting on the lot.

Viper Factory’s Future Features Past

When the production of the Dodge Viper ceased last year, Detroit lost a factory (again) and gained an empty building (again). Fortunately, Fiat Chrysler have come up with some plans to not just let the structure languish and decay the way so many other factories have in the motor city. Instead, the building will be remodeled to become a museum for historic Chrysler and Fiat vehicles in North America. It will be renamed the Connor Center and become home to 85 of the company's 400 or so historic cars, but for reasons unknown to me, it will not initially be open to the public. If I were Chrysler, and thank god I'm not because I can't stomach another breakdown, I'd be out there every day imploring the public to remember that we once made some cars that some consider historic. Basically anything to distract from the current fleet's J.D. Power and Consumer Reports scores.

Design Finally Trending the Right Direction

When you think of over-designed cars, the first thing that has to come to mind is the current Honda Civic. It's just vile in its ostentatious, look-at-me boy-racer styling, but it's far from the only guilty party. The new Lexus style is fairly polarizing and the Germans have been guilty of applying 15 feet of styling to a 12 foot car recently as well. But, at least in the latter's case, that's set to change with upcoming models, as both BMW and Mercedes have announced plans to tone down their looks and bring styling back to a simple, understated elegance. Honestly, it's what I like most about German cars and part of the reason I bought the GTI. For the price, for the performance, it was the least shouty choice and the silver paint really made the few styling lines on it pop in a way that I thought was really clean looking. Whereas with recent Mercedes and BMW vehicles, intersecting styling lines have tended to create design clash instead of flow, new models will emphasize sleekness. Audi has been doing this for years, but their downfall is that, in creating a minimalist design, they have minimized the differences in all of their vehicles, making them virtually indistinguishable from one another. 

Driving Test Involves Not Much Driving

Photo by Buffalo Police Department

Things didn't go too well for a 17 year-old in Buffalo, Minnesota on Tuesday, when she went to take her driver's test. Parked right out front of the exam office, the teen fired up the vehicle, which is apparently the only part of the test she got right, then shifted into drive, stomped on the gas instead of the brake and launched her Chevy Equinox straight through the front of the office. Fortunately, nobody was inside and the teen wasn't hurt, but the 60 year-old examiner in the car with her had to be hospitalized for non-life-threatening injuries. While no charges will be filed against her for the mistake, I am pretty sure her classmates will sentence her to life without forgetting what she's done.

Stig’s Strange Speed Stunt

Photo by Guiness World Records

Last week it was lawn mowers, this week, tractors, as Top Gear's Stig has set a new Guinness World Record for fastest modified tractor. As a stunt for this weekend's episode, the bright orange rig with a ridiculous wing on the back hit 87.27 miles per hour after two runs were averaged. For a 5.7 litre 507 horsepower Chevy V8, that isn't very fast at all, but for the Stig, in a tractor with open sides, I bet it felt pretty damn quick. Some say, he moonlights as a scarecrow.

Bike Breaks, Brings Brown Boxers

In other speed-related news, things didn't go quite to plan for Valerie Thompson this week at the World Speed Trials in Australia, which takes place on a salt flat that I didn't know existed outside of Bonneville. While attempting to break her 304 mile per hour record on a custom motorcycle, Valerie's bike...experienced trouble...causing the bike to lay down and slide for about a mile, shedding bits of itself along the way as it came to a stop and leaving a bright red stripe across Australia. Fortunately, Valerie is okay and she did manage to hit 328 miles per hour before the problem started. The bike, however, needs some serious work. Experiencing technical difficulties is never fun, but I can't imagine a more pants shitting moment than technical difficulties occuring above 300 miles per hour on two wheels.

McLaren Finds Friends with Flops

McLaren may not have had much luck with Formula 1 last year since they used Honda's shitty, under-powered, unreliable motors, but they haven't lost their sense of humor. Since now all Formula 1 vehicles will be fitted with the so-called "Halo" to prevent drivers' heads being taken off by flying debris or, indeed flying other vehicles, that means there's a new hashtag branding opportunity for companies constantly seeking for a way to make the most expensive motor sport cheaper. Some have accurately noticed that the halo device looks less like a halo and more like the straps of flip flops or, if you live in Australia, thongs. So who better to sponsor the halo than a flip flop company? McLaren has brought on Gandys, a British lifestyle brand who are, fittingly, launching a McLaren-inspired flip flop called the "halo edition," from which 100% of profits will go to the company's charity that benefits orphans in Sri Lanka. So while we'll wait to see if this season has a happier ending for McLaren, we should all go out and buy some F1 flip flops and give some orphans happy endings a little sooner.

Philippines Phlatens Phat Rides

If you're familiar with Rodrigo Duterte, this next story is probably going to seem pretty tame by his standards. After all, he operates death squads that have killed a documented 1,400 drug users, petty criminals and homeless people, even children. But he is the president of the Philippines, where he rules with an iron fist and squadron of bulldozers. And I do mean literal bulldozers, which he used this week to crush 14 vehicles worth about $525,000 that were illegally imported into the country. The cars included Mercedes, Porsches and Maseratis and the show was broadcast for the entire country to see, apparently as a confirmation of the Duterte's commitment to build a country free from the shackles of corruption. There's more work to do as apparently there are almost 1,000 other smuggled vehicles on the docket for destruction. As much as I don't want to see Lamborghinis, Aston Martins and others impounded and then crushed in a reality show kind of way, I suppose it's worth it if it takes Duterte's mind off of killing the children of drug addicts.

Highway to Hellcat

A Wisconsin man apparently out to prove the unsuitability of the Dodge Challenger Hellcat was arrested on Tuesday for driving 140 miles per hour on an Indiana Toll Road. If you're thinking, "how the hell did the cops catch a 707 horsepower muscle car?" Well it's not because he crashed, it's because he got caught behind everyone's favorite rolling roadblock; two semis driving side-by-side without passing each other. This may have been the only occasion that that happening was actually a good thing. When asked for an explanation why he was driving at twice the speed limit on an interstate, the driver just said he was trying to get to Maryland. Because there can't possibly be faster ways to get there than by endangering hundreds of people on public roads with a drag race car with shitty suspension.

Authored by
Devlin Riggs