Nothing better exemplifies Elon Musk’s haphazard approach to corporate decision-making than Tesla’s treatment of customers who paid thousands of dollars to pre-order the “full self-driving” option. Tesla introduced the option in 2016, and at the time Musk predicted it would be ready in around two years. Today, the technology still seems far from completion.
Last month, Tesla added insult to injury, announcing that existing customers who hadn’t already paid for the full self-driving option could do so at a lower price. That enraged some earlier full self-driving customers who had yet to get anything for their money, yet Tesla refused to offer them partial refunds.
To mollify these early adopters, Tesla promised that they would “receive an invitation to Tesla’s Early Access Program (EAP). EAP members are invited to experience and provide feedback on new features and functionality before they are rolled out to other customers.” The opportunity to beta-test Tesla’s software excited many eligible customers. After all, they had purchased the upgrade precisely because they wanted to be on the cutting edge.
Days after announcing the price cuts, Musk acknowledged that they had been a mistake and announced that prices would go “back to normal.” Still, many full self-driving customers were hoping and expecting to join Tesla’s early access program.
But when they contacted Tesla support to sign up, many were told that the program was full.
“I feel the way Charlie Brown felt”
“The Early Access program is invitation-only and participants are specifically chosen for evaluation,” a Tesla representative told Model 3 owner and full self-driving purchaser Brian Starr in an email last week. “It’s not open enrollment.”
Other customers got similar responses. And customers like Starr became more alarmed when the blog post announcing the early access program offer disappeared from Tesla’s website.
“I feel the way Charlie Brown felt every time he tried to kick the football and got it snatched away,” Starr told Ars in a Monday phone interview. “Maybe I’m just a chump. I keep trying to get that football.”
So what was going on? When I asked Tesla for comment, a spokeswoman told me that the blog post “reflected out-of-date pricing, so it was taken down to avoid customer confusion.” However, she stressed, “we are continuing to honor the commitments we made to our customers at that time, and we will be sharing early access to new features with applicable customers soon.”
When I shared this statement with Starr, he was skeptical that anything would change.
“They never come right out and say, specifically, what customers will be getting early access and when,” he wrote in an email. “It makes me wonder why? Like with the phrase Full Self Driving, Tesla wants us to project our hopes and dreams onto their words. But what they actually deliver may fall far short of our assumptions.”
Elon Musk: “Many decisions per unit time”
The frustrating experience of full self-driving customers like Starr provides a useful lens for thinking about Elon Musk’s unorthodox decision-making philosophy, which Musk explained in a revealing comment to the Wall Street Journal last year. It’s a quote I’ve featured in a couple of previouspieces.
Mr. Musk said his actions and rapid decision-making can be misunderstood as erratic behavior. “It is better to make many decisions per unit time with a slightly higher error rate, than few with a slightly lower error rate,” he said last weekend in a series of emails with The Wall Street Journal, “because obviously one of your future right decisions can be to reverse an earlier wrong one, provided the earlier one was not catastrophic, which they rarely are.”
This approach makes a certain amount of sense when you’re running a startup fighting for survival. But Tesla’s mercurial treatment of full self-driving customers illustrates how Musk’s approach can be counterproductive when it’s practiced by the CEO of a large company.
Back in 2016, engineers reportedly warned Musk that Tesla’s new “HW2” Autopilot hardware wasn’t designed for full self-driving operation and that it might not be possible to achieve full autonomy with software updates alone. Musk ignored their concerns and announced that all new Tesla vehicles would have hardware capable of full self-driving operation.
Musk apparently didn’t anticipate the backlash that would be created by last month’s decision to offer customers discounts on the full self-driving packages without offering partial refunds to those who had already pre-ordered the technology. He also seems to have offered full self-driving customers admission to the early access program without checking to see if the program could accommodate an influx of new users.
None of these hasty decisions have proven catastrophic. That’s partly because Tesla is a big company with a lot of money in the bank, but it’s also because the costs of those hasty decisions have largely fallen on Tesla customers rather than on Tesla itself.
At the very least, the whole episode has certainly been damaging to Tesla’s reputation. Tesla customers are learning that they can’t rely on promises from Tesla or its CEO. And that seems likely to hurt the company’s bottom line in the long run.