After years of fawning coverage, Tesla TSLA and its celebrity CEO Elon Musk have been getting a bit more serious scrutiny from the media and analysts in recent months. Yet, while this more critical lens has gained increasing traction in the financial press, it has largely failed to garner much attention from the Silicon Valley tech community, or from the tech-focused press.
Thus, it was a bit surprising to see Steve Wozniak, the near-legendary co-founder of Apple AAPL, come out publicly to blast Tesla for its misleading advertising of its driver assistance software, branded as Autopilot, as well as to challenge the company’s claim of leadership in autonomous driving technology.
Wozniak is right: Tesla consistently misleads the public, the press, and investors both in its descriptions of the scope of its autonomous vehicle technology, and the amount of time it will take for it (or any company) to offer a viable full self-driving (FSD) solution to drivers.
Woz is not amused
Wozniak first criticized Tesla in October, stating his displeasure at the sense that Tesla was selling technology that did not exist, and might never exist:
“I’ve just been fed too many hopeful wishes and lies about the future and I’ve given up on Tesla and Elon Musk and believing anything they say.”
In an interview with CNBC in mid-November, Wozniak was quite clear in his criticism of Tesla’s alleged self-driving technology:
“Tesla has no autopilot. They call it beta. What company puts out a feature and calls it beta? That doesn’t count. Tesla makes so many mistakes. It really convinced me that autopiloting and auto-steering, car driving itself, it’s not gonna happen ...You are almost more subject in a Tesla these days to being aware, watching of the road, than you used to because, when you lapse, that’s when those accidents happen that kill people.”
That is a stark reversal from where Wozniak stood not long ago. He was impressed with the future Tesla advertised and “wanted to be part of this lead in autonomous driving.” Like many early adopters, he kept buying the newest models that were eternally right on the cusp of achieving the promised functionality:
“I believed it and kept upgrading my Tesla so it would have camera and radar, and one that would have eight cameras and radar, because the first one could never do it. And then I gave up and said it’s really not gonna happen.”
Focus on the future
Tesla likes to keep investors, the media, customers and the public focused on the future. That has been the case especially with autonomous vehicle technology and FSD capabilities, which have spent years being just a few months away from release (but still available for purchase, despite not yet existing). In January 2017, Musk was asked when Tesla vehicles’ FSD capabilities would be noticeably different from the Enhanced Autopilot driver assist system. His answer has since become famous (or infamous):
“3 months maybe, 6 months definitely.”
In August 2018, more than a year later than Musk promised, FSD capabilities were finally supposed to go live. That did not happen. Instead, there have been more delays, with no new timetable for the rollout. Indeed, Tesla seems to be actively backtracking: In October, the FSD capability package was removed as a purchase option on its website.
Waking up to today
Tesla has been selling dreams of the future for a long time. Customers are starting, at last, to care about today. That is understandable, given that an increasing proportion of buyers are not the “early adopter” types known for the their great patience when it comes to development timelines. They also tend to be willing to accept “beta” products, cars that are less reliable than average and demand a lot more rework and repairs.
The new customer base, on the other hand, expects value for money and are not going to be so easily sold on the idea of waiting until some indeterminate point in the future to get what they paid for. They are also less likely to put a premium monetary value on social goods like “saving the planet” that have helped Tesla to maintain premium pricing.
These issues will be especially true of the customers who paid for the FSD upgrade to leased vehicles. With leases coming due in increasing numbers, more and more customers will likely feel cheated.
Even some true believers are starting to revolt, as the case of Wozniak demonstrates so well. That is a bad sign for Tesla.
Verdict
Tesla cannot keep hiding in the future. Ultimately, it will have to pay the price of its broken promises, and the bill is likely to come due before any mythic “future” can materialize.
Disclosure: Short Tesla via long-dated put options.
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