Daily Management Review

Tesla reveals new problems, Elon Musk's patience is wearing thin


Tesla’s shareholders rejoiced аor a short time: the company fulfilled its long-standing promise and reached the targets for the production of 5,000 vehicles a week. Then, there occurred reports that the company violates both the safety equipment at the plant and allows a significant amount of defect in the final product.

The innovative production of Model 3 electric vehicles eventually was transferred to covered awnings. According to the company's employee, workers from other departments were moved to the Model 3 assembly on the eve of the deadline, some types of production were shut down (for example, the Model S assembly). This suggests that the company managed to produce the planned number of cars mainly through manual labor, rather than automation, which Mask represented as a competitive advantage of the firm.

Tesla’s shares behaved accordingly to the incoming news: their price fell from $ 360 to $ 310 per share. Simultaneously with the fall of securities, it seems that Elon Musk’s nerves were also frayed. He attacked any media that wrote at least a little criticism of Tesla. However, there’s nothing new there: previously Musk has already accused everyone, from the Economist to Consumer Reports, in a conspiracy to defame the company. Some analysts were even worried that the eccentric head of Tesla was in the right mind. 

In particular, Mask was particularly indignant at the Business Insider, who reported that Tesla refused to conduct one of the Model 3 safety tests. During the test, the car's engine was started up to a certain rpm to check the brakes and the alignment of the wheels under load. The previous batch of Model 3 also had problems. The non-commercial organization and Consumer Reports publication did not recommend purchasing Model 3. During the testing, the specialists were dissatisfied with the operation of the brake system and noted the difficulty of controlling some functions of the car.

In addition to insider news, Tesla is ripe for new conflicts with consumers who began to report problems with their brand new Model 3. A user wrote on the company's forum that on July 3 he received a car that was released from the assembly line in March. After the car drove a total of 61 miles, the miracle of technology refused. Error codes reporting the need to drive a car for maintenance did not bode well for the owner. Moreover, such a mistake is heard from those who just received their electric vehicles. Needless to say, having waited 2 years for your turn, it is extremely insulting to get a defective car, and even not be able to quickly repair it in the service.

Many things that customers complain about, for example, poorly connected parts, loose safety belts, traces of installation, are drown in a stream of various issues. And it's not just isolated cases, it's a massive problem. Of course, there is a customer service, but it isn’t working properly. Users complain that the service is not even answering calls.

Tesla customers, who have not yet received their car, are pleading for their Model 3 to be assembled with a minimum of flaws. Not bad for the purchase of $ 60 thousand. Other "proud owners" of the electric car are upset that the repair of the Model 3 bumper cost as much as $ 9,000, and worst of all, they had to wait for repairing 5 weeks.

Thus, having fulfilled one promise, Elon Musk created a lot of problems in various areas of his company, and now he will have to deal with the consequences. The California Occupational Safety and Health Administration (Cal-OSHA) announced opening of a new investigation on June 21 at the Tesla plant in Fremont. The department has not provided any details about the investigation, except to confirm that this is the third investigation since April of this year and it was opened after a complaint of one of the workers of the plant.

"Cal-OSHA is currently conducting three investigations at Tesla," told an official said last month. She explained that the department's policy does not allow her to discuss content of the complaint that triggered the new investigation.

According to her, the first investigation was started by the administration on April 12 in connection with a serious trauma of a repairman of the subcontractor company Automatic Systems Inc. The second investigation was opened on 17 April. According to the news site Reveal, the omission of Tesla was that the company indicated unreliable information about the safety indicators at the plant in the report.