Tesla doesn’t have a safety issue; it has an Elon issue
It’s a bad time to be a billionaire.
Well, that might be a bit strong. It’s never really a bad time to be a billionaire. Sure, people might not like you much, but you can probably get over it pretty well in your Ocean-front mansion, or driving around in your $250,000 sports car.
Money can’t buy you love, you say? Are you sure about that?
Still, that doesn’t change the fact that there are a lot of people in the world right now that are not happy with the wealth disparity that we see and that is increasingly causing political winds to shift. How much those changes will impact the ability of the very rich to stay that way remains to be seen, but if you are a billionaire right now it is probably best to keep a low profile.
Let me repeat that for the loud guys out there Tweeting weird things. Yes, I’m talking to you, Elon.
Put your head down, be quiet and get on with it. That should be your mantra because if you keep sticking your head up above the rest someone is going to try and chop it off. I’m talking figuratively, of course (let’s hope), but to put it less colourfully, drawing attention to yourself is going to end up costing you money.
Just look at Tesla (NASDAQ: TSLA) over the past week. Elon Musk’s company had a bad time on the market after drawing headlines for alleged safety concerns in its self-driving cars.
When the news started to break that it was being sued for wrongful death by a crash victim’s family, the stock sat at $681.71 USD. Over the week, it fell sharply and now sits at $644.65. A 5.18% drop in one week is not something to handwave away.
And, it didn’t have to be that bad. Sure, headline traders will always react to bad news like that for any stock. However, in Tesla’s case the headlines were much more dramatic and long lasting than they should have been, based on what was actually happening.
With the caveat that the loss that this individual family experienced was real and unfortunate, the reality is that it was an outlier situation. Tesla doesn’t have a safety issue in its self-driving cars.
You can back that up with stats: The cars are experiencing an accident rate of 1 per 4.2 million miles driven. That’s nine times safer than the accident rate in the United States, where the Teslas are primarily being driven.
Self-driving cars will save lives. One hundred percent. They will. The issue here isn’t one of safety, it’s one of perception and PR management.
And, that’s where Musk’s very public — and, let’s face it, odd — profile harms the company. There are other companies out there in the self-driving space that aren’t getting hammered with safety questions. And they are more than happy to let Tesla take the heat, while they just get on with it.
Putting his head down and getting on with it — or maybe “pulling a Bezos” and just focusing on his space toys — is exactly what Musk needs to do now.
For both his and Tesla’s benefit.