Thanks to Autopilot, Tesla Had the Worst July Ever
Or, Elon Musk and the Terrible, Horrible, No-Good, Very Bad Month.
Every company goes through hard times now and again, and Tesla, one of the world's hottest automakers, is no exception. Between the end of June and today, the electric automaker has had one serious roller coaster of a month.
Technically, the carmaker's wild ride started last month. In mid-June, Tesla faced a backlash due to a claim it made a customer sign a non-disclosure agreement to prevent said customer from bringing a potentially recall-worthy suspension issue to the National Highway Traffic Safety Administration. Shortly thereafter, Elon Musk proposed that Tesla should buy his company SolarCity; the carmaker's stock fell 12 percent shortly thereafter.
But the real bad news came almost exactly a month ago on June 30, when Tesla announced the first fatal crash to occur while one of its cars was using Autopilot. Following its statement, Tesla's stock dropped by more than 2.5 percent; more importantly, the incident brought the semi-autonomous driving technology's potential flaws to the attention of the press, sparking a clamor of outrage and disbelief. Consumer Reports, one of the biggest advocates of the Tesla Model S, published an essay asking the automaker to rethink how it markets the semi-autonomous driving feature to its consumers and reprogram how it works. Not surprisingly, Tesla rejected the magazine's request.
After the crash was announced, the public began to wonder why it took so long for the company to announce the news. Though the wreck occurred on May 7th, the federal government was not made aware of it until May 16th—just two days before the automaker and CEO Musk arranged to sell off more than $2 billion of stock. The Securities and Exchange Commission opened an investigation into Tesla to decide whether the company deceived its investors by not informing them of the potentially "material" information.
The bad news just kept coming. On July 1st, a Tesla Model X crashed and rolled over in Pennsylvania on the Pennsylvania Turnpike. The driver originally claimed his car's Autopilot system was engaged when the crash happened, but after the NHTSA announced it would be investigating the incident, Musk tweeted out that Autopilot was not active when the crash took place, and that he believes the accident would not have happened if the driver assist feature was on.
That would not be the last of July's Autopilot-related wrecks. On July 11th, The Drive reported on a semi-autonomous Model X crash in Montana. In this gnarly incident, the car reportedly drove itself through around 20 wooden guardrail supports without stopping until it came to a stop on the side of the two-lane highway.
Following the crash, the owner and Tesla became engaged in a public, passive-aggressive back-and-forth that felt all too similar to an Internet flame-war. Tesla stated it reviewed the vehicle's logs and learned the driver did not have his hands on the steering wheel for two minutes before the crash; the automaker also said the car alerted the driver to regain control, but he did not do so until it was too late. The driver came back at Tesla in a public letter last week that disputed the automaker's claims and accused the company of not reaching out following the incident before blaming him for the crash. Then this past weekend, Tesla posted a response to the owner's letter on the Tesla Motors Club forum saying representatives form the company repeatedly tried to speak with him, as well as challenging several other claims the driver made.
Tesla also spent the month dealing with bad financial news. The electric car maker told shareholders it failed to deliver as many cars as it hoped for its second quarter. Tesla provided just 14,370 new cars to their owners, falling short of its 17,000 vehicle goal. The company said its "extreme production ramp" and the large amount of cars still in transit at the end of the quarter was the cause of the shortcomings.
In what could have in part been a move to combat all the bad press, Musk spent what felt like half of July teasing part two of Tesla's big master plan on Twitter. When the CEO's master plan finally dropped last week, though, it was full of big dreams and long-shot goals, such as Tesla-made semi-trucks and pick-ups. It also demonstrated a doubling-down on autonomous driving, with plans to add cars that can be summoned from a distance and self-driving buses managed by fleet operators.
A busy month, sure. But July isn't over, and Tesla still has a few things left to do. The grand opening of its massive Gigafactory is scheduled for July 29th, and the Tesla-SolarCity merger is likely to go through shortly. All told, it seems likely that July 2016 is one month Elon Musk and Co. are unlikely to forget—even though they might like to.