RSS_Auto_Poster
Well-known member
Written by Bill Visnic
A late-spring brouhaha that developed between Tesla Motors and an intrepid reporter known for skeptical Tesla coverage blew over fairly quickly but not before highlighting some unaccounted costs of car-making that the tech world tends to gloss over on the path to auto-industry disruption. In uncovering Tesla"s largely undocumented practice of expecting customers to sign comprehensive non-disclosure agreements (NDAs) before the company would make certain repairs outside the standard warranty coverage, The Daily Kanban"s Ed Niedermeyer shed light on what could have been interpreted as Tesla"s attempt to shield potentially faulty engineering from the increasingly scrutinous watch of the National Highway Traffic Safety Administration. A NHTSA investigation convened surprisingly quickly, I"ll say found no evidence of widespread or intrinsic design problems with the Tesla Model S front suspension. But the evolving situation exposed uncomfortable realities behind Tesla"s approach to developing and selling vehicles in the mass market. There was a thin-skinned social-media tongue lashing that"s become a hallmark of Tesla CEO Elon Musk"s first response to detractors. His dislocation from non-billionaire reality will never be more hilariously evident than is his accusation that Niedermeyer was in cahoots with Wall Street short-sellers. Mature car companies know better, even before any debate about whether a CEO should be engaging the world on Twitter as if they"re NBA wives or desperate celebrities. More telling to me about the short-selling angle, though, was what it suggested about Musk"s overriding state of mind. To Tesla"s CEO, the effect of the faulty-suspension story on the company"s stock price appeared to be the underlying concern, not whether the Model S suspension design (or, more likely, manufacturing execution) was faulty. Or whether Tesla"s NDA practices were not in alignment with regulators" expectations of how a car company should relate with its customers when it comes to matters of potential safety. (Tesla did, as a result, modify the language of its NDAs.) Musk seems to be immensely concerned about how negative news might affect his company"s financial position. Such a worry, diesel-engine emissions cheating excepted, generally doesn"t cause lost sleep for multinational auto companies and their asset-backed manufacturing and development empires. A few weeks prior to the break of the suspension story, Tesla initiated another stock sale this one to the tune of about $1.5 billion to bolster its cash reserves. The relative meagerness of that figure was placed in perspective a day before Tesla"s stock issue when it was reported General Motors was set to earmark an estimated $100 million merely to make good with consumers who"d purchased some Chevrolet, GMC and Buick fullsize crossovers sold with mislabeled fuel-economy ratings. In effect, GM was paying out a tenth of a billion dollars because somebody neglected to update some files. How many of those could a company like Tesla handle? Developing and engineering and then guaranteeing the world"s most-complex consumer products is an immensely capital-intensive endeavor. That"s not news. But Tesla"s latest abbreviated adventure into the worm-hole connecting the industrial and consumer universes provided, in my view, one of the starkest reminders yet of why even fabulously rich tech companies such as Apple and Google are unlikely to ever undertake the development and manufacture of entire vehicles. "Cell phones aren"t cars" is the adage auto-company engineers and executives often deploy to give perspective to the extra layers of consumer and regulatory liability that come with manufacturing vehicles, compared with consumer electronics. Some disruptors understand and are working on how to most profitably participate in automotive development without taking over. Others, like Musk, have ushered in wonderful slices of disruption. But taking over has costs even billionaires can"t comprehend.
Date written: 21-Jun-2016 11:07 EDT
More of this article on the SAE International Website
ID: 3953
A late-spring brouhaha that developed between Tesla Motors and an intrepid reporter known for skeptical Tesla coverage blew over fairly quickly but not before highlighting some unaccounted costs of car-making that the tech world tends to gloss over on the path to auto-industry disruption. In uncovering Tesla"s largely undocumented practice of expecting customers to sign comprehensive non-disclosure agreements (NDAs) before the company would make certain repairs outside the standard warranty coverage, The Daily Kanban"s Ed Niedermeyer shed light on what could have been interpreted as Tesla"s attempt to shield potentially faulty engineering from the increasingly scrutinous watch of the National Highway Traffic Safety Administration. A NHTSA investigation convened surprisingly quickly, I"ll say found no evidence of widespread or intrinsic design problems with the Tesla Model S front suspension. But the evolving situation exposed uncomfortable realities behind Tesla"s approach to developing and selling vehicles in the mass market. There was a thin-skinned social-media tongue lashing that"s become a hallmark of Tesla CEO Elon Musk"s first response to detractors. His dislocation from non-billionaire reality will never be more hilariously evident than is his accusation that Niedermeyer was in cahoots with Wall Street short-sellers. Mature car companies know better, even before any debate about whether a CEO should be engaging the world on Twitter as if they"re NBA wives or desperate celebrities. More telling to me about the short-selling angle, though, was what it suggested about Musk"s overriding state of mind. To Tesla"s CEO, the effect of the faulty-suspension story on the company"s stock price appeared to be the underlying concern, not whether the Model S suspension design (or, more likely, manufacturing execution) was faulty. Or whether Tesla"s NDA practices were not in alignment with regulators" expectations of how a car company should relate with its customers when it comes to matters of potential safety. (Tesla did, as a result, modify the language of its NDAs.) Musk seems to be immensely concerned about how negative news might affect his company"s financial position. Such a worry, diesel-engine emissions cheating excepted, generally doesn"t cause lost sleep for multinational auto companies and their asset-backed manufacturing and development empires. A few weeks prior to the break of the suspension story, Tesla initiated another stock sale this one to the tune of about $1.5 billion to bolster its cash reserves. The relative meagerness of that figure was placed in perspective a day before Tesla"s stock issue when it was reported General Motors was set to earmark an estimated $100 million merely to make good with consumers who"d purchased some Chevrolet, GMC and Buick fullsize crossovers sold with mislabeled fuel-economy ratings. In effect, GM was paying out a tenth of a billion dollars because somebody neglected to update some files. How many of those could a company like Tesla handle? Developing and engineering and then guaranteeing the world"s most-complex consumer products is an immensely capital-intensive endeavor. That"s not news. But Tesla"s latest abbreviated adventure into the worm-hole connecting the industrial and consumer universes provided, in my view, one of the starkest reminders yet of why even fabulously rich tech companies such as Apple and Google are unlikely to ever undertake the development and manufacture of entire vehicles. "Cell phones aren"t cars" is the adage auto-company engineers and executives often deploy to give perspective to the extra layers of consumer and regulatory liability that come with manufacturing vehicles, compared with consumer electronics. Some disruptors understand and are working on how to most profitably participate in automotive development without taking over. Others, like Musk, have ushered in wonderful slices of disruption. But taking over has costs even billionaires can"t comprehend.
Date written: 21-Jun-2016 11:07 EDT
More of this article on the SAE International Website
ID: 3953
