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