Elon Musk, Tesla shares and Twitter problems

It’s the day before Thanksgiving and Tesla is in trouble. Share prices of the electric automaker are down more than 50% since the beginning of the year. And now, the company’s wayward CEO, Elon Musk, is distracted by his shiny new $44 billion toy: Twitter.

Tesla has long enjoyed an excellent reputation, both as a manufacturer of luxury electric vehicles and as an investment opportunity. Yet the problems in the company are piling up and more and more customers and shareholders seem to take notice. In recent weeks, several critical posts Tesla build quality they garnered attention on social media, and hundreds of thousands of Tesla cars were subject to recalls. (Updates over the air will address issues with the vehicles taillights and front passenger airbag, two of the company’s recent calls.) So while Musk is busy putting out fires on Twitter and running his other companies, SpaceX, the Boring Company and Neuralink: Tesla’s reputation seems to be taking a big hit.

Let’s start with Musk himself. In the wake of his takeover of Twitter, some pundits and analysts fear Musk’s new job could undermine his responsibilities as Tesla CEO and contribute to a plunge in his stock price. Keep in mind that Musk also financed much of his Twitter takeover deal by selling his Tesla stock and also reportedly licensed more than 50 Tesla engineers to work at Twitter when he took over last month. At the same time, Tesla is currently facing a lawsuit alleging that Musk’s 2018 compensation package was inappropriately influenced by Tesla’s board of directors’ personal ties to Musk. (The lawsuit also calls Musk a “part-time CEO.”) Several lawsuits have been filed against the company in relation to his workplace, including lawsuits alleging sexual harassment, racism and a “toxic” workplace culture , in the last year or so. .

Even the cars themselves have problems. Build quality has been a constant criticism of Tesla, and a reliability study released by Consumer Reports this month found that the company continues to have issues with body hardware and steering systems, among other issues. Tesla’s fix remains a major hurdle, as an investigation by Recode made light last summer. The challenge is so significant that GM said in a recent investor presentation that its dealerships had apparently repaired more than 11,000 Tesla vehicles since last year. A TikTok video documenting the build quality of a Tesla, including a wobbly trunk lid, garnered more than 4 million views earlier this month.

Steven Elek, data analyst for Consumer Reports, said in a statement: “Build quality continues to be an issue for Tesla. In our latest reliability survey, owners reported issues with Model S, Model 3, and Model Y body hardware, paint, and trim. and faded paint are some of the specific flaws we’ve heard from Tesla owners.

Then, there are Tesla’s recalls, totaling 19 since the beginning of this year (GM has issued 25 and Ford has issued 63, for reference, though they’ve also produced far more cars). In addition to last week’s recalls, the company also issued recalls to some vehicles for problems with their power steering in November and other cars that may ignore stop signs in February.

Many of these recalls are being issued without the cars having wide-ranging safety issues and require no physical modifications to the cars. Instead, they’re managed through over-the-air updates, which allow Tesla to make necessary repairs through, essentially, Internet downloads. These fixes are obviously easier to complete than taking a vehicle in for repair or replacing one entirely. However, as Recode explained earlier, these types of recalls, because they’re so easy to deal with, could also create a cycle where regulators are constantly racing to catch up with malicious software.

Tesla’s plan to become a self-driving car company doesn’t seem to be going so well either. Even as other companies back away from their autonomous vehicle aspirations amid an economic downturn, Elon Musk is still touting Tesla’s so-called comprehensive self-driving software: A beta version of the company’s system is expected to become available to more Tesla owners by the end of this year.

And now Tesla is facing yet another lawsuit, filed in September by owners who claim Musk misled customers about how far-fetched and functional this technology is. The government has also been involved: Reuters reported in October that the Justice Department is investigating Tesla’s technology, and the Securities and Exchange Commission has also launched an investigation. At the same time, an initiative called the Dawn Project calls for a ban on Tesla’s Full Self-Driving software. To support this effort, the project has released videos and ads intended to highlight the dangers of Tesla’s technology, including a television campaign showing a Tesla knocking down a child dummy. The automaker recently sent a cease and desist letter in response.

Oh, and Tesla’s competitors are starting to pose a bigger threat. While the company is still the darling of the emerging EV industry, companies like Ford and GM are racing to overtake Tesla and ramp up their production. Even startups like Lucid and Rivian are trying to beat Elon Musk’s cars in the luxury market.

These companies probably don’t care that Musk is currently spending his time resetting Donald Trump’s Twitter account and posting memes, since they could use the time to catch up. As Recode editor Adam Clark Estes wrote when news of the Musk acquisition was first announced: “But if ever there was a time to get an edge, it’s now. Tesla’s boss is away. Time to play.”

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