Tesla is trying to put out multiple fires in the U.S. and China – from fatal car crashes to regulatory investigations. Here’s a look at what’s happened so far.
Like Tesla, Musk is also trying to put out fires on several fronts – from regulators to customers, and from employees to fans. His personal worth has also suffered, bumping him to third place on the world’s richest list.
So here’s a chronological list of the things that have gone wrong for Tesla since March.
20 March 2021
According to a Reuters report, the Chinese military has banned Tesla cars from entering its housing complexes due to security concerns over cameras installed in the vehicles. This restriction on Tesla cars is in close parallel to the U.S. government’s sanctions against Huawei, the report said.
A few days prior, the Wall Street Journal had reported that the Chinese government is restricting the use of Tesla cars by military staff and state employees. The decision was taken after a government security review of Tesla vehicles found that Tesla cars can lead to national security leaks, the report said.
According to the report, Tesla car cameras can record images continuously, and the vehicle can record data of when, where, and how the cars are being used. Tesla can also obtain the contact list of phones synced with Tesla cars, the report said. The government is concerned that the data may be sent back to the U.S., thus inspiring this restriction.
At the China Development Forum on March 22, Musk tries to quell fears by promising that Tesla cars do not spy. “If Tesla used cars to spy in China or anywhere, we [would] get shut down,” Musk said.
Tesla’s Chinese social media page later said that cameras in Tesla cars are not activated in China, Economic Times reports.
Even before these headlines hit the news, Lansdowne Partners fund manager Per Lekander predicted that Tesla shares were in for a tumble. According to a CNBC report, Lekander has shorted Tesla stocks, and thinks it is in a bubble that is about to burst.
23 March 2021
The New York Times reported that the National Highway Traffic Safety Administration (NHTSA) is investigating 23 accidents in the U.S. involving Tesla cars, that might have been using the Autopilot feature. Tesla’s Autopilot is an advanced driver assistance system that can automatically accelerate, brake, and change lanes.
The NHTSA also started an investigation into faulty displays in Teslas last year, which led to them asking Tesla to recall around 158,000 vehicles. Tesla agreed to recall the vehicles about a month later.
24 March 2021
A report by Consumer Reports sounded an alarm against Tesla over concerns about how the company collects and uses data. According to the report, Tesla records drivers inside its cars, in sharp contrast to other EV makers, who use infrared cameras to track eye movement and head tilts.
The report points out that such driver data in the wrong hands can be used to build detailed driver profiles with habits and routines. How Tesla uses such data is, therefore, of paramount importance, the report says.
13 April 2021
Tesla finally bows to Chinese regulators under pressure. The company promised to store data collected in China within the country, Livemint reported. The move was announced after a meeting with government officials, and was aimed at quelling data security concerns that triggered restrictions last month.
17 April 2021
The Wall Street Journal reported that a Tesla Model S crashed north of Houston, catching fire and killing two people. The crash occurred after the car missed a slight curve in the road and rammed into a tree. The battery fire took about four hours and 32,000 gallons of water to extinguish, the report stated.
Based on preliminary investigations and witness statements, authorities believe there was no one at the wheel. The two people who died in the crash, were found in the front passenger seat and backseat respectively, the report said. The circumstances of the crash, therefore, indicated that Tesla’s Autopilot or Full Self Driving (FSD) system was engaged during the crash.
While there have been other Tesla crashes this year, this was by far the most fatal. Moreover, the crash came hours after Musk touted Tesla Autopilot’s safety on Twitter.
The record-breaking downward tumble of Tesla stocks started right after this crash. But this was not the only fatal Tesla crash reported. In China, a Tesla crashed into a cement barrier on the road, killing the passenger.
19 April 2021
A Chinese customer climbed on top of a Tesla at the Shanghai Auto Show in protest over the company’s handling of her complaints, the Economic Times (ET) reported. The disgruntled customer was wearing a t-shirt that read, “The brakes don’t work.” A video capturing her actions went viral on social media.
To make matters worse, Tesla’s Vice President for external relations Grace Tao questioned whether the customer was acting on her own.
Tao was quoted by a local news outlet saying, “I don’t know, I think she is quite professional, there should be (someone) behind her.”
“We have no means to compromise, it’s just a process in the development of a new product,” she added.
Soon after, Tesla asked the news outlet to withdraw the comments after it caused a media outcry. Over the next two days, Tesla continues to post a series of contrite apologies that have so far failed to appease customers and media outlets. By the third day since the video was uploaded, Tesla said it was “working with regulators for investigation,” the ET report notes.
According to several news reports, Tesla’s Chinese customers have registered numerous complaints regarding sudden acceleration and problems with braking. A study last year found that far more number of Tesla vehicles faced problems than the industry average. Earlier this year, even Musk admitted Tesla has quality issues.
20 April 2021
Texas police would be serving search warrants to Tesla to obtain data related to the Houston crash, Reuters reported. The NHTSA and the National Transportation Safety Board (NTSB) are both investigating the crash, the report said.
A day prior, Musk’s tweets dismissed notions that the crash was caused by faults in the car’s Autopilot feature. But Musk did not detail which data has been recovered. According to the Reuters report, Musk’s tweet was the first unofficial acknowledgment that Tesla had recovered data relevant to the crash.
Musk’s claim that Autopilot could not have been enabled on a road without road markers for autonomous vehicles (AVs) was also challenged. A user posted a video showing a Tesla car running on Autopilot in a road without these lane lines.
The Verge later reported that Tesla executives had also contradicted preliminary findings of authorities, claiming that someone was in the driver’s seat at the time of the crash.
22 April 2021
Tesla’s website clearly states that the Autopilot feature requires active driver supervision and does not make the vehicle autonomous. But many have been spotted in Tesla cars with no one at the wheel.
Consumer Reports’ senior Director of auto testing, who conducted the experiment, noted in the report that, “It was a bit frightening when we realized how easy it was to defeat the safeguards, which we proved were clearly insufficient.”
5 May 2021
The NTSB released its preliminary report for the Houston crash. The report stated that the car was on Autopilot during the crash, in contradiction to Musk’s claims. Autopilot requires Traffic Aware Cruise Control and Autosteer systems to be engaged. According to NTSB tests, Autosteer is not available at the location of the accident although Traffic Aware Cruise Control could be engaged.
Another fatal Tesla crash in California was reported by Reuters. The crash took place in the early hours on a highway near Fontana when the Tesla ran into an overturned truck. The Tesla driver was killed while the truck driver, and a motorist who was trying to help him, were injured.
7 May 2021
The Verge reported that Musk has been exaggerating Tesla’s Autopilot capabilities, according to Tesla’s Director of Autopilot software. According to the report, Musk has been stretching the truth and making predictions about full autonomy when Tesla is currently at Level 2. There are five levels of autonomous driving systems, with Level 5 being ‘fully autonomous.’
Musk has publicly claimed that Tesla can achieve Level 5 autonomy by the end of this year. But that is in direct contradiction to what Tesla engineers told the Department of Motor Vehicles earlier this year. “Tesla couldn’t say if the rate of improvement would make it to L5 by end of calendar year,” the report notes.
Additionally, a fatal Tesla crash that killed the electric car driver was reported in Guangdon province, China. The Tesla vehicle rammed into a truck at an extremely high speed of 158 kilometers per hour, Global Times reported.
The report said that Tesla is cooperating with the authorities and their investigation. The exact cause of the accident remains unknown. But the crash is similar to a string of accidents where Tesla vehicles had braking problems in China over the last few months.
11 May 2021
Tesla stocks see another bad day as the automaker’s China sales in April is reported to be significantly lower than March. The dip in Tesla’s April sales was more pronounced than its rivals, although it was an improvement over January and February sales figures, the report notes.
According to a Financial Times report published later, Tesla is facing stiff competition from Chinese EV makers Niyo, BYD, and ORA. China accounts for almost 30% of Tesla’s global sales. Therefore, Tesla’s loosening grip on China can significantly impact its earnings.
14 May 2021
ABC News reported that the Tesla involved in the California crash was running on Autopilot at the time of the crash. This latest crash pushes the total number of Tesla crashes under investigation in the U.S. to 29. This is also the fourth U.S. death involving Tesla’s Autopilot.
18 May 2021
North of Seattle, Washington, a Tesla crashed into a parked police patrol car, ABC News reported. There were no injuries in the accident, although the patrol car received heavy damage at the point of impact, the report notes.
The police car was partially blocking the highway and had its emergency lights on while the deputy sheriff was investigating a separate collision. The Tesla driver claimed that the car had Autopilot engaged and he had assumed the car would slow down and steer away on its own.
The local police took the opportunity to remind people on social media that Autopilot features cannot be trusted to drive cars safely on its own.
Additionally, The Hindu reported that Tesla is cooperating with Chinese authorities to investigate the Tesla crash that injured two traffic police, one of whom died later. Videos of the crash went viral on Chinese social media, and investigations are still under way.
24 May 2021
Restrictions around using Tesla cars continues to grow in China. According to a report by CNET, Tesla vehicles are now banned from government compounds and agencies. The ban even restricts parking Tesla cars inside these areas, the report notes.
These were some of the the biggest events directly linked to Tesla that impacted the company’s stock price and its reputation in two regions. But they are far from being the only factors affecting Tesla’s fate.
Tesla had invested $1.5 billion on bitcoin in February. The cryptocurrency’s price crashed since Musk tweeted that Tesla will not be accepting bitcoin for payments over environmental concerns, overturning its previous decision.
Musk, who is a cryptocurrency enthusiast and a frequent Twitter user, holds considerable power to sway markets – a fact that has provoked the ire of his followers off late. His tweets about bitcoin and dogecoin, not only impacted his popularity, but also Tesla’s earnings.
A news report claimed that at current prices, Tesla’s bitcoin position is likely in the negative compared to when it purchased its bitcoin holdings. This means that unless bitcoin prices improve, an impairment loss will be recognized in Tesla’s second quarter earnings report.
While Musk has said that Tesla will not be selling its bitcoins at present, speculations abound as to whether prices can bounce back. The company is now at a critical juncture, where it has to focus on its quality and pacify regulators and customers to get back at the top of the leaderboard. As competition from bigger players increase, Tesla will be left behind unless its technology can match Musk’s tall claims.
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