Tesla has more trouble on its hands, and this time it has nothing to do with Elon Musk's involvement with Twitter. Federal safety regulators announced last week they have launched multiple investigations of the company, The Associated Press reports. One involves reports of "steering wheels coming off some SUVs," while another will examine a fatal California crash that may have involved the company's automated driving system.
The investigations come just a few weeks after the National Highway Traffic Safety Administration forced Tesla to recall more than 350,000 vehicles to update their "Full Self-Driving" software, Reuters reports, over concerns the programming "did not adequately adhere to traffic safety laws and could cause crashes." The recall was a "fresh setback" for Musk's promises that Teslas will attain self-driving capabilities in the near future.
These issues — and more — add to a growing sense that Tesla is losing its way. The company "has blown past skeptics and doubters for years," NPR reports, but now contends with "increasingly steep competition from rivals investing billions of dollars on an electric future." In November, Musk even floated stepping back from day-to-day operations at both Tesla and Twitter. This should be Tesla's moment, as the electric vehicle revolution finally takes hold. Instead, the company is facing doubts about its future.
What's wrong with Tesla?
Wired's Jeff Link writes that the car company's problems go "way beyond Elon Musk." Yes, Musk's social media ventures have gobbled up his attention — and some of his Tesla stock, which he used to finance his purchase of Twitter — but there are structural problems as well. "Tesla stock was already falling in April 2022," when Musk launched his Twitter bid, because of "limited designs and high prices make it vulnerable to competition from legacy automakers." Where Tesla once dominated the electric vehicle industry, competitors like Ford are now rushing to offer "shockingly good" products like the F-150 "Lightning" electric truck. Meanwhile, Link notes, Tesla's products are starting to look a bit long in the tooth: "Tesla's Model S is now more than 10 years old"
Add to that the possibility that Musk has overpromised and underdelivered on key features of the Tesla. After the massive recall in February, a group of shareholders sued Musk and the company, CNN reports, saying they had been defrauded about the potential of Tesla's automated driving systems. Business Insider points out that Musk spent much of the last decade promising "that driverless Teslas are right around the corner." In 2023, though, the reality is that "you still can't take a snooze at the wheel or watch TikTok in traffic."
Musk's backup plans are vague. The Verge reports that at a recent "investor day," Musk was repeatedly asked about details of a planned new generation of low-cost electric vehicles. He ducked, instead outlining a "master plan" to end the world's use of fossil fuels. "We will have a proper product event, but we'll be jumping the gun if we're to answer your questions," Musk said. Tesla's stock dropped after the presentation. The good news? At least Musk avoided the "wild overpromises" of past investor events.
What's next for Tesla?
A fight for its future. Ross Gerber, an investor who owns more than 400,000 shares of Tesla, announced in February he is running for a seat on the company's board, Bloomberg reports. The company, Gerber says, is too Elon-centric: "Tesla needs to build its image around Tesla, and not just around Elon. … I think it's time for Tesla to grow up."
Musk might be served by narrowing his ambitions, Steve DaSilva writes at Jalopnik. Musk's "master plan" vision for Tesla goes beyond cars to a world powered by "sustainable electric systems bearing Tesla logos." The result is that the company's work too often "is forced to fit Musk's plan for world domination" when in reality it's still a "startup car company." Musk's big ideas are "too big for Tesla to pull off."
Despite the challenges, Tesla still earned $12.6 billion in profits for 2022. Sure, the company's long-promised and much-mocked Cybertruck won't fully go into production until 2024, but the company is getting more aggressive about cutting Tesla prices to grow consumer demand for its cars. Musk, naturally, believes the best is yet to come. "Long term," he says, "I am convinced that Tesla will be the most valuable company on earth."