In fairness, missing on guidance is nothing new for Tesla, and, unlike General Motors, it hasn't been in the car business for 100 years. A learning curve was to be expected. The Autopilot crisis is more severe. That's because Tesla has always stressed ...and more »
CEO Elon Musk.
Tesla has endured existential crises in the past, such as in 2008
when it was just days from bankruptcy.
But Tesla has never experienced a true identity crisis.
It is now.
The question for Elon Musk and his team to ask isn't, "Will we
make it?" but rather, "What are we all about?"
Driving this identity crisis is the recent news that a driver was
killed in May when his Tesla Model S running the Autopilot
semi-self-driving technology went under a semi-trailer on a
Florida highway, leading to a fatal crash.
But that's just one side of the crisis, which has intensified as
the National Highway Traffic Safety Administration, already
investigating the Florida crash, is now also gathering
information on a nonfatal Autopilot-related crash in
The other aspect of the crisis is that Tesla has decided it
doesn't want to be a car company anymore.
The master plan
Let's tackle that one first. The truth is Tesla never
wanted to be a car company, not in the traditional sense that
Ford or Honda is a car company, building cars and selling them.
Musk invested in Tesla over a decade ago, and later became CEO,
because he wants to accelerate humanity's shift from fossil fuels
to sustainable power. Electric cars were a key component of his
But Tesla still had to, you know, construct cars, so in the short
term â€” when Tesla was "Tesla Motors," before it became just
"Tesla" â€” it was an automaker. And not a very efficient one, as
we learned last week when it missed its production and delivery
targets for the second quarter.
In fairness, missing on guidance is nothing new for Tesla, and,
unlike General Motors, it hasn't been in the car business for 100
years. A learning curve was to be expected.
The Autopilot crisis is more severe.
That's because Tesla has always stressed that its isn't
a traditional carmaker â€” it's a fast-moving tech company, very
much of Silicon Valley, actively disrupting the old way of doing
things by using software to rapidly improve its vehicles and to
pull the future forward.
Autopilot is out there
Autopilot is a classic example. Tesla engineered self-driving
systems into it cars and then, with a software update, integrated
these capabilities and flipped the switch make them available to
owners. You went to sleep with a car that couldn't drive itself
(under specific circumstances) and woke up with one that could.
Autopilot, which I've tested out, was a step beyond any advanced
cruise-control option currently available on any vehicle from a
But there was a reason for that. Cadillac, for example, has been
testing a similar system called "Super Cruise."
But Caddy, GM's luxury brand, hasn't yet made it available to
customers. And given what's now happened with Autopilot, that
might have been a wise call.
Tesla argues, accurately, that there has been only one Autopilot
fatality since the tech was introduced, and that the technology
has so far indicated a much higher level of safe highway driving
than what a human driver can manage.
If you follow a natural trajectory for Autopilot being improved,
it leads to largely self-driving Teslas in a decade or two and
the beginning of a rapid decline in the 35,000 deaths caused by
auto accidents on US roads. The human driver has always been the
most dangerous thing about the automobile.
But customers and the larger public are now spooked about
Autopilot-level self-driving, even thought it isn't even
close to full autonomy. The technology is being
questioned. The performance of Tesla electric cars, which is
generally impressive, isn't.
Cars are different
For Tesla, this is awkward. Any other tech company would have a
hard time finding itself in a similar position because Silicon
Valley app-makers and gadget companies such as Apple don't have
technology platforms that can go from zero to 60 mph in less than
three seconds and that routinely hit the legal speed limit on
Tesla is using its technology, quite literally, to solve complex
physics problems, not to make it easier to find a date for
Saturday night or tell you mom that you miss her apple pie.
In fact, I'd argue that the intensity of Tesla's tech, which
decisively sets its apart from the more frivolous elements of the
Silicon Valley ecosystem, is what's driving its identity crisis.
The traditional automakers are happy to let it go this way.
They're fascinated by Tesla and envious of its ability to raise
boatloads of cash with no profits and annual production that
would embarrass a big carmaker. But they're also glad to let it
ride on the leading edge of risk. For example, GM now has a clear
example of something that Autopilot/Super Cruise can't handle: A
large white semi-truck crossing in front of a vehicle.
In order for Tesla to be Tesla, is has to keep pushing
the tech envelope. Autopilot was the furthest it's pushed â€” so
far that the company required owners to acknowledge that, in
activated a beta version of the software, they understood the
I expect Tesla to keep right on pushing. But I also expect the
company to have more debates about whether technologies that are
closely connected with safety should be pursued a zealously as
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