By: Rachel Cross
Tesla, the luxury car company, is currently in the midst of a crisis regarding the self-driving technology used in the vehicles. According to a Bloomberg article written by Kartikay Mehrotra (2017), Tesla recalled 53,000 cars in April with malfunctioned brakes after customers claimed 47,000 cars had some aspect that was defective.
There were various reports from Tesla drivers that detailed issues with the vehicles veering out of lanes. The cars would randomly slam on the brakes when it was not necessary or fail to slow down when another vehicle was in front. Out of the 47,000 that were recalled, half contained a second-generation autopilot feature, which costed $5,000 per car.
The customers who sued were promised the cars would be fully functional by December 2016. They paid between $81,000 and $113,000 for their vehicles. These features promised automated collision avoidance and automatic emergency braking system, and both were lacking in the Teslas. These Tesla owners are requesting for full refunds for the car and the $5,000 advanced autopilot system.
According to a Forbes article by Alan Ohnsman (2017), the CEO, Elon Musk, has chosen to respond to customers via Twitter about the crisis. This shows his ability as a spokesperson in his availability to work with the media, his response to questions equally and fairly without bias, answering the questions asks and not skirting issues, answering questions quickly (within one day), and handling stress well. Another positive response was not saying “no comment” to people’s tweets.
Although Musk responded to this crisis well, he did not put people’s lives as a priority and could have had mass casualties from the malfunctions. One other negative aspect of the crisis was the initial dismissal of the lawsuit. The company spokespeople stated, “This lawsuit is a disingenuous attempt to secure attorney’s fees posing as a legitimate legal action, which is evidenced by the fact that the suit misrepresented many facts.” Despite the crisis, Tesla has had extremely strong investor support. The company passed General Motors as being the most valuable U.S. automaker at a market value of $49.6 billion.
As crises can threaten the company at any time, it is essential to be ready when a crisis occurs. Coombs (2015) explains that stakeholder perception matters greatly during a crisis, and it is considered a crisis when the customer believes it is a crisis, even if organization does not believe it to be true (p. 17). Although the company did much to recover and build back the reputation, there are certain factors that could have been handled better, especially being sincerer and more apologetic about putting lives in danger.
Ohnsman, A. (2017, April 19). Tesla Customers Sue Over ‘Dangerous’ And Non-Functioning Autopilot Software. Retrieved June 14, 2017, from https://www.forbes.com/sites/alanohnsman/2017/04/19/tesla-customers-sue-over-dangerous-and-non-functioning-autopilot-software/#3d24021d2a60
Mehrotra, K. (2017, April 20). Tesla Sued Over ‘Dangerously Defective’ Autopilot Software. Retrieved June 14, 2017, from https://www.bloomberg.com/news/articles/2017-04-20/tesla-sued-over-dangerously-defective-autopilot-software-j1qp271l