Given all of Tesla's shady business practices, this doesn't surprise me in the slightest.
Tesla has really made huge progress in modernizing cars (making them electric and not terrible, getting rid of middlemen, continuous/rolling product updates, infotainment that is not slow/terrible, etc) I just really wish they would have focused on the positive parts of the future and left the negatives behind (remote lockout of features, vendor lockin for service, and generally trying to screw your customers at every possible turn...)
Elon Musk is unethical and it’s amazing how he has gotten away with so much simply by associating himself with positive trends. People see him and they think about clean energy and space colonization, but they ignore his casual disregard for human life evidenced by misrepresenting autopilot’s current and future capabilities, leading to at least 5 deaths at this point. He has also promised to cure autism via Neuralink, a baseless claim. He claimed that a monkey has controlled a computer at Neuralink, almost certainly untrue. He has destroyed his skeptics through questionable tactics, Fossi, Martin Tripp, skabooshka, Vernon Unsworth. The man is a disgrace, but his fans defend him as if he was the Messiah. How people can rail against Trump while supporting Elon Musk is mind boggling.
Most founders keep to themselves because they don't want to overpromise. Musk does the total opposite, by tweeting all the random thoughts in his brain and I suspect it mirrors his thinking and the thinking of other founders (Zuck, Page, etc..) closely. The latter are just much quieter. Anyone would look stupid with their unfiltered thoughts broadcast to millions, but it's one of the things that people like about the dude.
People say the same thing about Trump. I say when you’re a billionaire and have millions of followers it’s important that you self-filter and choose your words carefully. Quite literally people may die if you don’t.
I say that there are a lot of countries on the planet where you don’t have the option to speak your mind honestly. I’d rather live in the one that is rewarding Elon.
Freedom of speech isn’t the issue. He can be allowed to say what he does, but that doesn’t exempt him from the public consequences of lies and abuse.
It’s admirable that a company can reach a $200 billion valuation in the USA weeks after the CEO tells the SEC to suck his cock. The issue is with investors who aren’t questioning if that’s a sign of lack of ethics.
I would agree that it doesn’t look like good judgement- but shorts are literally betting against him and his company. It’s not obvious to me where that behavior (crowing against his adversaries) crosses a line into being wrong or evil.
I never liked this argument. Partly because if you take it to its logical conclusion, any sufficiently successful individual would be paralized - which is an obviously wrong conclusion. The more successful you are, the freer you should be.
The solution is to also look at gains, not just losses. Billionaires can kill people with a tweet, but they can also inspire and, yes, save lives with a tweet.
> The solution is to also look at gains, not just losses. Billionaires can kill people with a tweet, but they can also inspire and, yes, save lives with a tweet.
Lets examine autopilot's 5 deaths compared to human drivers?
There are roughly 3 billion autopilot miles driven [1] and we'll take your 5 deaths as a given [0]. That's 1.7 deaths per billion miles.
Overall US deaths is around 15 per billion miles driven (in 2000, before Tesla) [2] ... around 8x worse than autopilot. Is autopilot saving lives?
Expecting zero mishaps is not reasonable because all software has bugs and bugs can be reduced with effort while compute power improves with time. Humans on the other hand will not likely improve.
Current self driving stats in general are meaningless because all that driving is done under constant human supervision. But if the car drives itself for 20Km and then needs intervention to avoid a fatal crash it will still count as another 20Km of self driving with no incidents. The human saves don't make it into the publicized stats.
There are 2 stats that could prove meaningful for this: some average of distance driven between human interventions, and percentage of driving conditions covered. Then compare this to human stats, I'd assume the average human driver might go 10000Km without incident while covering 90% of driving conditions (like everything except extreme weather or road conditions). A self driving car would have to match that.
In other words AP only has 5 deaths because those were the only drivers who left it unsupervised. I'd guess that if every car in the world today would suddenly be driven by a computer we'd see worse numbers than with human drivers one way or another (efficiency, deaths, etc.). Self driving today is great as an assist, with the human still fully in control.
How many of those 15 deaths are in a car that costs as much as a Tesla, and therefore can be expected to have the same safety features? How many are in 25 year old cars? If you claim that driving a Tesla on autopilot on a freeway is safer than a 30 year old $2000 clunker, I won’t challenge that. If you say it’s safer than a $50,000 Audi that’s highly debatable.
Not only that, but how many times would autopilot have caused a fatal accident if the human driver hadn’t intervened? Tons of YouTube examples would suggest quite a few.
You call it vendor lock-in, I call it avoiding dealships, eliminating shady warrantee programs, and eliminating the hassle of finding reputable 3rd party servicers
why would you own a tesla if you didn't leave near a tesla service center?
anticipating the reasonable response to this question -- i'm guessing if you own a tesla and you don't live near a service center you know what you're getting yourself into.
reno only recently got theirs, for instance, and they're just a few miles down the road from the gigafactory. but reno was full of tesla's even before the service center opened.
EDIT, cause downvoting:
my point is, i wouldn't lease a toyota, with its free/included oil changes, if i didn't live near enough to the toyota dealership to show up every 10K miles easily. i may, however, buy an older used toyota if i was happy enough going to jiffy lube (or similar). applying same criteria to tesla and proximity to their repair locations.
Well because you want a Tesla and you assume it will be as reliable as other modern cars. I own a Mazda and the nearest Mazda dealer is about 170 miles away. I’ve only had to go there once for airbag recall (I change my own oil).
Not sure why all the traditional car makers haven't caught on and put DRM on the oil system. They could take cues from both the inkjet printer industry and Tesla.
The classic auto industry and the ecosystem were formed around the current rules and changing them is hard. But when reinventing the car (electrifying for example) it's an opportunity to start over.
To take an example from the IT world, PCs and their OSes stayed so open because that's how they evolved when the industry first appeared. But phones and tablets offered the opportunity to lock down everything.
So I'd say that the future path of the connected smart car is closer to that of phones today.
But I think you may be onto something. Tesla is setting a bad example for other car makers. They can point to it and say, why can they do it and we can't?
Brief jump into the future. I get to see my new BMW default skin package expire and car turn dull grey, lights losing its exclusive green sheen, and warmed leather seats fold in to be replaced by, the horror, standard seats with warmers firmly shut off. They may as well brand me cheap.
I own a Tesla and live 200 miles from the closest service center. If you have a problem, chances are that it can and will be fixed by mobile tech. I had a problem with my door handle (a typical problem in early Model Ss). Mobile tech came to my work and swapped out the handle in the parking lot. I never saw the tech. When I got an upgrade to the latest autopilot computer, a Tesla tech came to my house and did the install, which took a couple of hours, in my garage. I just left the garage door open so he could get in. And no oil so oil changes aren’t an issue. I get the occasional tire rotation at a local tire shop and that’s it for maintenance.
I think this is the main reason I cannot justify Tesla for myself. It feels like I am purchasing a piece of software I have to call Tesla support for. No one else can help. And it is not a cheap toy. The support may be quick and it may even be convenient.. I don't know if it is just me being old or general weariness with the recent efforts to subscribe to me various 'features' ( Tesla is certainly not the only one trying to get that market ). I do want to be able to either do it myself or pay someone other than Tesla to do it if need be ( I hopefully won't, but I want the option ).
There are advantages to not being close to a Tesla service center. It means that you're more likely to be serviced by a mobile technician, which is amazingly convenient. Just leave your car parked in your driveway and it gets fixed without any inconvenience to you. It would be more annoying for big things, but for little things it's awesome.
My main complaint with their service model is that it is basically impossible to do service on your own car. I have never taken one of my vehicles to a dealer, or a third party service shop, aside from getting tires mounted and smog checks done. This is made possible because I only buy cars which have parts and service documentation available, but as time goes on it is harder and harder to get this information. Tesla is actively working to make this impossible, and this in combination with the required always on telemetry is why I ended up purchasing a Fiat instead of Tesla--despite it being a quantitatively and subjectively worse car.
They also have a history of reverting back to poor worker treatment. I forgot the statistics, but the accident rate for their workers is quite high. I recently read an article about the lead safety engineer being told that Elon Musk doesn't like the color yellow, so that's why they couldn't paint yellow safety lines on the ground. Just think about that.
When a worker complained of being called the N-word at the Fremont factory, Elon sent out an email saying that people need to grow a thicker skin [0]. IMHO this is a stain on his reputation that he cannot erase even if he wanted to.
Are you going from their own blog post? I would be suspicious of any claims by Tesla. Also, it has been reported that they underreport injuries.
Musk continually pulls the same tactics that Trump does, except that Musk is applauded for it. The methods are the same: lie, confuse, insult, make grand claims.
That entire article is an appeal to authority and doesn’t address classifying warranty repairs as goodwill. If the author wasn’t claiming to be working directly with a warranty accounting expert it would have nothing to say.
The article contains a large number of assertions and numbers derived from public records. Instead of a middle-brow dismissal, how about you attack something specific?
The author talked to an expert about a subject that few people understand, and this is portrayed as a bad thing? I guess it's better to speculate out of thin air?
Maybe you were an expert on warranty accounting before reading the article so you didn't learn anything. But I doubt it because if you were you would have had more concrete criticisms of the article. But even warranty accounting experts would probably appreciate the author working out the claims capacity ratios for almost a dozen different companies.
The article is obviously days of work from the author. It may be worthy of criticism. If so, please do so substantively.
Just a few of things I learned from the article:
- what warranty accounting is
- what warranty margins Tesla keeps
- how that compares to others in the industry
- what will happen to Tesla's financial statements in the future if Tesla adjusts their warranty margins closer to their industry peers
P.S. There's lots of good discussion about goodwill in the comments to the article.
“... Chrysler also erased computer records that would allow people that eventually bought these cars to discover they were lemons ...”
I am sure that a system manager had backups (perhaps a tape buried in his desk drawer), no matter what Chrysler said.
> "Tesla provides express warranties. Under state lemon laws and the federal Magnuson-Moss Act and other provisions of state and federal laws, they are required to ensure that they comply with the warranties, or provide a refund. It appears they are attempting to evade state lemon laws by claiming their so-called 'goodwill' repairs don't count toward the criteria for buying back lemons. In addition, Tesla has been requiring lemon owners to sign onerous settlement agreements that silence them and make it easier for Tesla to engage in lemon laundering: the illegal resale of defective lemon vehicles, without branding the titles or taking other steps to protect consumers."
> It appears they are attempting to evade state lemon laws
"Appears" how? Where is the substantiation? I came away wit the same concern. I can see the "onerous" terminology in the settlement agreements, which is standard lawyer CYA in these kinds of disputes.
But... that link clearly says it was not a lemon buyback! It's not illegal to voluntarily buy a car back and then resell it. Lemon laws are a very specific thing, that effectively force a manufacturer to buy the product back. If it wasn't invoked, then it doesn't apply.
Assuming the law said the car is lemon after x repair attempts and Tesla bought it back after x-1 so that lemon law would not apply and they could still resell it.
Lemon laws are not a very specific thing, they are wildly different between states. Not all lemon laws require disclosure, but some states require disclosure even if a lemon claim isn't actually filed but the car meets the criteria: https://www.lemberglaw.com/lemon-law/rights/lemon-laundering...
And I ask again, what exactly is Tesla accused of doing that violates lemon laws. As I see it, we have two facts:
1. Tesla sometimes does repairs via "goodwill" accounting instead of standard warrantee service. On it's face, this sounds like a good thing.
2. Tesla bought some guys car, then resold it. Again, that's a good thing in isolation.
And the suggestion is that they did the goodwill thing so that they could scam the new owner of the car by evading lemon law disclosure. Well, OK. Did they? Show us the evidence. If there's no actual car that got sold where you can document these repairs and show they were unresolved... I just don't think there's much of a case here.
The only way this makes sense is if you start out a priori with an assumption that Tesla is trying to scam their customers, then try to find a scenario where they could do it. That works for writing novel plots, it's not much evidence in an actual court.
I agree. The trouble is, righteous indignation is a drug. And America is hooked on it now. For whatever reason (internet, polarized politics, boredom).
> Tesla sometimes does repairs via "goodwill" accounting instead of standard warrantee service. On it's face, this sounds like a good thing.
In what way is that possibly good?? At best its a deliberate mischaracterization that obscures the number of serious manufacturing flaws. At worst its fraudulent accounting.
> And the suggestion is that they did the goodwill thing so that they could scam the new owner of the car by evading lemon law disclosure. Well, OK. Did they? Show us the evidence. If there's no actual car that got sold where you can document these repairs and show they were unresolved... I just don't think there's much of a case here.
I linked two, and theres firsthand testimony from someone who was in the company. You're just freely making shit up
>In what way is that possibly good?? At best its a
deliberate mischaracterization that obscures the number
of serious manufacturing flaws. At worst its fraudulent
accounting.
At best it's not a deliberate mischaracterization. It depends on the judgment call of whether the repairs would otherwise be covered under warranty.
Yes but they go on a tangent citing Alec and his wind buffering issue which turned out to be an undisclosed accident on a pre-owned vehicle and not a Lemon or manufacturing defect.
The article didn't present any evidence of lemon laundering, just that it was a compelling theory for goodwill repairs while presenting unrelated incidents of unethical behavior by Tesla to establish a narrative that Tesla isn't above such shenanigans.
Only experience I had with a goodwill repair was way out of warranty for a non-safety item(stuck exterior door handle) so they definitely aren't limited to warranty or lemon issues.
staying with the theme of the article, by doing this repair as goodwill, it changes how they have to report it (if at all). So if there really would need to be a recall to fix a fault/safety issue with the exterior door handle, the data wouldn't be there for regulators to make it mandatory. Warranty doesn't apply in these cases. If a recall defect is discovered 5 years after warranties expire, the manufacturer is still required to fix it on all cars impacted. One of my vehicles had a seat belt recall 10 years after. So your "goodwill" could be just them trying to avoid a costly recall.
Note: this was just staying with the theme of the article and not that I agree with the accusations.
Additionally goodwill repairs can be used to cover up engineering defects that only manifest themselves in limited circumstances to avoid a full recall.
I took an out of warranty Honda Accord in for service at a Dealership and they discovered a cracked engine block. They performed a goodwill repair under the auspices that "that shouldn't happen".
“Cars without issues repaired under warranty don't need to be reported to the NHTSA – National Highway Traffic Safety Administration. After all, warranty repairs are due to manufacturing issues and are, therefore, an OEM's responsibility. Goodwill fixes are something automakers do to please their clients.”
Seems like if they classify a repair as goodwill they can avoid a car receiving a lemon designation. There’s also a link to an article that alleges Tesla classifies warranty expenses as goodwill in order to lower their warranty accruals per vehicle, boosting profit margins.
> Before these experts gave us the lemon laundering perspective, though, the most likely explanation for the goodwill repairs was an article written by Montana Skeptic, a famous Tesla short-seller. He claims that labeling warranty repairs as "goodwill" is a way Tesla found to cheat its financial results.
> This would happen because warranty costs are included in financial results as "Cost of Revenue," a number that affects gross profit and net income, according to that article. Instead of naming them as such, Tesla would say they are goodwill repairs, so these expenses would appear as "Operating Expenses," which get diluted in the company's results for as long as the car is under warranty.
> If a company labels a warranty repair as goodwill, it may claim in court that it was not due to a defect, but rather to the way the clients used their cars. In short, it could not be framed as something the automaker had to fix, according to lemon laws.
Sadly nothing new in the auto industry. If it's not for the sake of the financials, it's often done in the name of brand image or to avoid a larger recall.
A goodwill repair is something the manufacturer decides to repair even though they aren't obligated to. It counts as opex instead of cost of revenue like a warranty repair. It might also not count towards repair attempts for lemon laws.
The article alleges that Tesla is repairing issues that are covered under warranty as "goodwill repairs" instead to help the balance sheet and circumvent lemon laws. As an owner, you might not care too much since the issue is getting repaired either way.
A goodwill repair is a repair done not because the issue is covered under warranty, but because the manufacturer wants to make the client happy. This could be because the item being repaired isn’t under warranty anymore, or because the repair is for something other than a manufacturing defect. The article is saying that Tesla is doing a lot of “goodwill repairs” that are likely actually for defects that would otherwise be classified as warranty repairs. It seems to be arguing that Tesla is doing this to avoid having the cars be classified as lemons, though it admits that another motivation for doing so is to adjust their financial reports as it changes how the cost spent for the repair is classified.
There are also (sketchy) accounting reasons to do this-- you don't need to draw upon warranty reserve accounts. The whole reason these accounts exist is to accurately capture the cost of the future warranty obligations at time of sale.
A goodwill repair is a repair on a car which is still in the warranty period, but the broken part is not covered by the warranty. - so there is nothing charged to the customer.
There is also a "goodwill" on the P&L of a company, which has nothing to to with warranties.
Some people claim now that Tesla is booking the costs of the these reapairs into the "goodwill" category on the P&L, because both have the same name.
A "goodwill repair" is a repair where Tesla asserts that it is an issue caused by the user and not a warranty case. That Tesla is covering the costs of fixing it is merely a matter of goodwill instead.
The article alleges that Tesla wrongly handles most warranty cases as goodwill repairs. This hits a lot of possible legal issues.
* They can avoid legislation dealing with chronic defects in cars.
* They can sidestep reporting requirements for road safety issues.
* They can fudge the books when they report repair costs.
* They can avoid labeling cars they had to buy back appropriately.
I think the intent behind the goodwill repair is important. If Tesla is doing this intentionally as a legal loophole, then there’s a problem.
But electric cars are new, we’re still understanding some of the problems with them, and we’re still understanding how people are using them. It’s not unreasonable for Tesla to have a high rate for these repairs given how unique their product is.
The first sentence makes to a of sense but the second one seems unrelated to any of the discussion.
Let’s say the rate is high because of how unique their product is, how does that change anything? The repairs should still be recorded correctly (not goodwill) and laws followed accordingly?
The lemon laws were written for the combustion engine days, where hundreds of mechanical components can reasonably add up to an unfixable lemon.
A defunct battery can be swapped. A bad electric motor can be swapped. Sensors can be changed. These are trivial to do on an electric car.
There’s an incredible labour cost to do this kind of swapping on a combusting engine. An engine swap? That takes a highly experienced mechanic for an ICU. Transmission issues are also write offs.
I really don't understand the logic here. If EVs are so easily repaired, wouldn't that mean that no EV customer or maker would ever be concerned with the concept of a lemon car? No manufacturer would need to do any dancing around the law -- no NDAs, no "goodwill" repairs of warrantied defects, etc.
Personally, I think lemon laws are overall very good for car manufacturers: they give people a sense of comfort regarding the worst-case scenario in purchasing a new car. And that's especially important for cars based on new technologies. But I'd love to see whether there's any empirical support for this.
Agreed, and it may be that swapping out a battery or engine is easy but I don’t want my brand new car in the shop 3-4x a year because my car just stopped working at the grocery store. Especially when wait times for servicing can be protracted. It doesn’t matter if the car runs on hopes and dreams, it needs to be reliable.
The article points out that Tesla seems to only perform these goodwill repairs when the car is still under warranty, but I have no idea how well-sourced that is.
> That doesn't mean Tesla is entitled to follow a similar path just because legacy automakers have.
Isn't it sorta weird that companies other than tesla are called "legacy"? I know that term is almost uniquely bad within software, but considering the site I'd think they know what connotation it carries for many people.
The notion of a lemon is a car that was made on a bad day, so there are lots of defects that show up over time. The laws vary but generally say that if a car needs several major repairs in its first year you can demand a buyback.
The underlying assumption that justifies a category of "lemon" is that needing N repairs is evidence that it is more likely than other cars of its model year to need an N+1st repair because failures are not independent.
This may have been true of earlier technology, but it doesn't match the way modern cars are made. Mainly, the granularity of subassemblies is much higher, so for example in a Tesla they replace the entire rear powertrain or entire battery pack as a warranty item.
Lemon laws should have required some periodic statistical adjustment to determine whether lemoniness actually exists in a given brand or not.
What if manufacturing isn’t the source of end-user lemoniness?
These cars go through QC - maybe some QC folks are more slipshod than others, and the main source of lemons are the ones who were inspected by terrible QC inspectors?
Or maybe the lemons are perfectly fine cars that were damaged in shipment and were repaired badly?
Regardless, the lemon laws still protect the consumer.
Rework of QC fails and post-sales service are also imperfect.
You can easily have a couple excess failures trigger excess service, and if you're unlucky with the quality of one episode of that rework or service, end up on a never-ending rework treadmill. Even on the brands with the best quality.
Even if modern car failures are independent, forcing car companies to give the consumer an out after many consecutive failures of a component is not necessarily a bad thing.
It would basically turn in to a Pigovian n^3 tax on reliability.
But I suspect that you're overstating; a drive unit may well be truly independent, but something like water leaking in to the cabin wouldn't be.
Even if 80% of components have independent failure modes, the remaining 20% will account for the vast majority of your lemon law invocations.
When you look at Consumer's Reports owner satisfaction scores for Tesla vehicles they are surprisingly high. In which case there can't be vary many getting the goodwill lemon treatment, possibly none.
NHTSA data is a better indicator. Many owners are 100% satisfied with a dangerous or buggy car if A) it hasn't killed them yet, and/or B) the manufacturer makes it easy to replace the lemon.
If you are under the impression to.buy something "new" and "experimental", you are more willing to put ok over the shortcomings. When you buy a Ford, VW, BMW, Fiat, Toyota, you expect it to work perfectly because it's "old tech". When you buy a Tesla, you expect it to behave a little wonky sometimes because it's new and exciting except that it's basically exactly the same just with electric motors.
Well, as a satisfied customer, I can tell you that the one time I got a new car and had my old one bought back under "goodwill repurchase" without too much trouble, net-net increased, not decreased, my satisfaction knowing that they stand by their product.
This is really confusing to use the term "goodwill" here. It's a term of art in accounting, and despite this story being partly about accounting, it appears to have nothing to do with accounting goodwill...?
Maybe there is a reason why these repairs relate to accounting goodwill, but otherwise, I suspect journalistic malpractice.
That’s what Tesla calls it. Source: I have had a Model S for many years and repairs I have had under warranty have been listed as “goodwill.” e.g., Torn sunroof seal (presumably, due to manufacturing defect).
I'm sure they do, and the meaning is obvious, it's just that when you get into the issue of accounting for it, it ought to be clarified that it's not accounting goodwill.
103 comments
[ 3.5 ms ] story [ 113 ms ] threadTesla has really made huge progress in modernizing cars (making them electric and not terrible, getting rid of middlemen, continuous/rolling product updates, infotainment that is not slow/terrible, etc) I just really wish they would have focused on the positive parts of the future and left the negatives behind (remote lockout of features, vendor lockin for service, and generally trying to screw your customers at every possible turn...)
Ctrl+F for "tesla".
It’s admirable that a company can reach a $200 billion valuation in the USA weeks after the CEO tells the SEC to suck his cock. The issue is with investors who aren’t questioning if that’s a sign of lack of ethics.
I would agree that it doesn’t look like good judgement- but shorts are literally betting against him and his company. It’s not obvious to me where that behavior (crowing against his adversaries) crosses a line into being wrong or evil.
Maybe. But it's hard not to see the parallel between massive risks taken and massive progress made.
I never liked this argument. Partly because if you take it to its logical conclusion, any sufficiently successful individual would be paralized - which is an obviously wrong conclusion. The more successful you are, the freer you should be.
The solution is to also look at gains, not just losses. Billionaires can kill people with a tweet, but they can also inspire and, yes, save lives with a tweet.
You can be incredibly successful and not be famous. That's fine.
But if your success includes fame then... I like my social leaders to be nice to their own social group and not kill them very much.
If I save six lives, I can then kill six people?
There are roughly 3 billion autopilot miles driven [1] and we'll take your 5 deaths as a given [0]. That's 1.7 deaths per billion miles.
Overall US deaths is around 15 per billion miles driven (in 2000, before Tesla) [2] ... around 8x worse than autopilot. Is autopilot saving lives?
Expecting zero mishaps is not reasonable because all software has bugs and bugs can be reduced with effort while compute power improves with time. Humans on the other hand will not likely improve.
0. citation needed? 1. https://electrek.co/2020/04/22/tesla-autopilot-data-3-billio... 2. https://en.wikipedia.org/wiki/Transportation_safety_in_the_U...
Human miles include all conditions/situations. Autopilot disengages whenever it is convenient and human handles all harder situations.
How about comparing same type of miles?
https://crashstats.nhtsa.dot.gov/Api/Public/ViewPublication/...
There are 2 stats that could prove meaningful for this: some average of distance driven between human interventions, and percentage of driving conditions covered. Then compare this to human stats, I'd assume the average human driver might go 10000Km without incident while covering 90% of driving conditions (like everything except extreme weather or road conditions). A self driving car would have to match that.
In other words AP only has 5 deaths because those were the only drivers who left it unsupervised. I'd guess that if every car in the world today would suddenly be driven by a computer we'd see worse numbers than with human drivers one way or another (efficiency, deaths, etc.). Self driving today is great as an assist, with the human still fully in control.
Not only that, but how many times would autopilot have caused a fatal accident if the human driver hadn’t intervened? Tons of YouTube examples would suggest quite a few.
anticipating the reasonable response to this question -- i'm guessing if you own a tesla and you don't live near a service center you know what you're getting yourself into.
reno only recently got theirs, for instance, and they're just a few miles down the road from the gigafactory. but reno was full of tesla's even before the service center opened.
EDIT, cause downvoting: my point is, i wouldn't lease a toyota, with its free/included oil changes, if i didn't live near enough to the toyota dealership to show up every 10K miles easily. i may, however, buy an older used toyota if i was happy enough going to jiffy lube (or similar). applying same criteria to tesla and proximity to their repair locations.
To take an example from the IT world, PCs and their OSes stayed so open because that's how they evolved when the industry first appeared. But phones and tablets offered the opportunity to lock down everything.
So I'd say that the future path of the connected smart car is closer to that of phones today.
But I think you may be onto something. Tesla is setting a bad example for other car makers. They can point to it and say, why can they do it and we can't?
Brief jump into the future. I get to see my new BMW default skin package expire and car turn dull grey, lights losing its exclusive green sheen, and warmed leather seats fold in to be replaced by, the horror, standard seats with warmers firmly shut off. They may as well brand me cheap.
[0] https://www.npr.org/2018/01/12/577565279/tesla-faces-complai...
Musk continually pulls the same tactics that Trump does, except that Musk is applauded for it. The methods are the same: lie, confuse, insult, make grand claims.
https://www.businessinsider.com/tesla-factory-injuries-incom...
https://www.wsws.org/en/articles/2020/03/07/tesl-m07.html
The author talked to an expert about a subject that few people understand, and this is portrayed as a bad thing? I guess it's better to speculate out of thin air?
Maybe you were an expert on warranty accounting before reading the article so you didn't learn anything. But I doubt it because if you were you would have had more concrete criticisms of the article. But even warranty accounting experts would probably appreciate the author working out the claims capacity ratios for almost a dozen different companies.
The article is obviously days of work from the author. It may be worthy of criticism. If so, please do so substantively.
Just a few of things I learned from the article:
- what warranty accounting is
- what warranty margins Tesla keeps
- how that compares to others in the industry
- what will happen to Tesla's financial statements in the future if Tesla adjusts their warranty margins closer to their industry peers
P.S. There's lots of good discussion about goodwill in the comments to the article.
There's a ton of text here, but the actual allegation seems to be completely unsubstantiated.
> "Tesla provides express warranties. Under state lemon laws and the federal Magnuson-Moss Act and other provisions of state and federal laws, they are required to ensure that they comply with the warranties, or provide a refund. It appears they are attempting to evade state lemon laws by claiming their so-called 'goodwill' repairs don't count toward the criteria for buying back lemons. In addition, Tesla has been requiring lemon owners to sign onerous settlement agreements that silence them and make it easier for Tesla to engage in lemon laundering: the illegal resale of defective lemon vehicles, without branding the titles or taking other steps to protect consumers."
"Appears" how? Where is the substantiation? I came away wit the same concern. I can see the "onerous" terminology in the settlement agreements, which is standard lawyer CYA in these kinds of disputes.
The article also noted a former employee is involved in a lawsuit accusing Tesla of reselling lemons.
Assuming the law said the car is lemon after x repair attempts and Tesla bought it back after x-1 so that lemon law would not apply and they could still resell it.
1. Tesla sometimes does repairs via "goodwill" accounting instead of standard warrantee service. On it's face, this sounds like a good thing.
2. Tesla bought some guys car, then resold it. Again, that's a good thing in isolation.
And the suggestion is that they did the goodwill thing so that they could scam the new owner of the car by evading lemon law disclosure. Well, OK. Did they? Show us the evidence. If there's no actual car that got sold where you can document these repairs and show they were unresolved... I just don't think there's much of a case here.
The only way this makes sense is if you start out a priori with an assumption that Tesla is trying to scam their customers, then try to find a scenario where they could do it. That works for writing novel plots, it's not much evidence in an actual court.
In what way is that possibly good?? At best its a deliberate mischaracterization that obscures the number of serious manufacturing flaws. At worst its fraudulent accounting.
> And the suggestion is that they did the goodwill thing so that they could scam the new owner of the car by evading lemon law disclosure. Well, OK. Did they? Show us the evidence. If there's no actual car that got sold where you can document these repairs and show they were unresolved... I just don't think there's much of a case here.
I linked two, and theres firsthand testimony from someone who was in the company. You're just freely making shit up
At best it's not a deliberate mischaracterization. It depends on the judgment call of whether the repairs would otherwise be covered under warranty.
The article didn't present any evidence of lemon laundering, just that it was a compelling theory for goodwill repairs while presenting unrelated incidents of unethical behavior by Tesla to establish a narrative that Tesla isn't above such shenanigans.
https://insideevs.com/news/403631/tesla-sells-used-model-3-p...
https://www.theverge.com/2018/2/21/17036426/tesla-lemon-cars...
Note: this was just staying with the theme of the article and not that I agree with the accusations.
I took an out of warranty Honda Accord in for service at a Dealership and they discovered a cracked engine block. They performed a goodwill repair under the auspices that "that shouldn't happen".
“Cars without issues repaired under warranty don't need to be reported to the NHTSA – National Highway Traffic Safety Administration. After all, warranty repairs are due to manufacturing issues and are, therefore, an OEM's responsibility. Goodwill fixes are something automakers do to please their clients.”
Seems like if they classify a repair as goodwill they can avoid a car receiving a lemon designation. There’s also a link to an article that alleges Tesla classifies warranty expenses as goodwill in order to lower their warranty accruals per vehicle, boosting profit margins.
> This would happen because warranty costs are included in financial results as "Cost of Revenue," a number that affects gross profit and net income, according to that article. Instead of naming them as such, Tesla would say they are goodwill repairs, so these expenses would appear as "Operating Expenses," which get diluted in the company's results for as long as the car is under warranty.
> If a company labels a warranty repair as goodwill, it may claim in court that it was not due to a defect, but rather to the way the clients used their cars. In short, it could not be framed as something the automaker had to fix, according to lemon laws.
Tacoma frame rot comes to mind here...
The article alleges that Tesla is repairing issues that are covered under warranty as "goodwill repairs" instead to help the balance sheet and circumvent lemon laws. As an owner, you might not care too much since the issue is getting repaired either way.
There is also a "goodwill" on the P&L of a company, which has nothing to to with warranties.
Some people claim now that Tesla is booking the costs of the these reapairs into the "goodwill" category on the P&L, because both have the same name.
It is about an as misleading claim as it sounds.
I think you are incorrect. This appears to have nothing to do with accounting goodwill, and unfortunately the article doesn't make that clear.
The article alleges that Tesla wrongly handles most warranty cases as goodwill repairs. This hits a lot of possible legal issues.
* They can avoid legislation dealing with chronic defects in cars.
* They can sidestep reporting requirements for road safety issues.
* They can fudge the books when they report repair costs.
* They can avoid labeling cars they had to buy back appropriately.
But electric cars are new, we’re still understanding some of the problems with them, and we’re still understanding how people are using them. It’s not unreasonable for Tesla to have a high rate for these repairs given how unique their product is.
Let’s say the rate is high because of how unique their product is, how does that change anything? The repairs should still be recorded correctly (not goodwill) and laws followed accordingly?
A defunct battery can be swapped. A bad electric motor can be swapped. Sensors can be changed. These are trivial to do on an electric car.
There’s an incredible labour cost to do this kind of swapping on a combusting engine. An engine swap? That takes a highly experienced mechanic for an ICU. Transmission issues are also write offs.
The bar for an electric lemon is much higher.
Personally, I think lemon laws are overall very good for car manufacturers: they give people a sense of comfort regarding the worst-case scenario in purchasing a new car. And that's especially important for cars based on new technologies. But I'd love to see whether there's any empirical support for this.
Isn't it sorta weird that companies other than tesla are called "legacy"? I know that term is almost uniquely bad within software, but considering the site I'd think they know what connotation it carries for many people.
https://en.wikipedia.org/wiki/Legacy_preferences
There's a whole separate discussion to be had why the word has so different meanings too.
That is the more common sense you will find, which implies the predecessor's passing. Not very positive state for the ancestor.
The underlying assumption that justifies a category of "lemon" is that needing N repairs is evidence that it is more likely than other cars of its model year to need an N+1st repair because failures are not independent.
This may have been true of earlier technology, but it doesn't match the way modern cars are made. Mainly, the granularity of subassemblies is much higher, so for example in a Tesla they replace the entire rear powertrain or entire battery pack as a warranty item.
Lemon laws should have required some periodic statistical adjustment to determine whether lemoniness actually exists in a given brand or not.
These cars go through QC - maybe some QC folks are more slipshod than others, and the main source of lemons are the ones who were inspected by terrible QC inspectors?
Or maybe the lemons are perfectly fine cars that were damaged in shipment and were repaired badly?
Regardless, the lemon laws still protect the consumer.
You can easily have a couple excess failures trigger excess service, and if you're unlucky with the quality of one episode of that rework or service, end up on a never-ending rework treadmill. Even on the brands with the best quality.
It would basically turn in to a Pigovian n^3 tax on reliability.
But I suspect that you're overstating; a drive unit may well be truly independent, but something like water leaking in to the cabin wouldn't be.
Even if 80% of components have independent failure modes, the remaining 20% will account for the vast majority of your lemon law invocations.
Maybe there is a reason why these repairs relate to accounting goodwill, but otherwise, I suspect journalistic malpractice.