Difference between revisions of "Tesla, Inc."

Revision as of 13:47, 13 April 2018

Tesla.com

"2016 Tesla, Inc" Site Type Automobile & Energy Launch Date July, 2013 Status Active Product Line Model S Model X Powerwall Platform Automobile & Energy Website www.tesla.com

Tesla, Inc. is an automotive and energy storage company co-founded by Elon Musk, Marc Tarpenning, Martin Eberhard, Ian Wright, and JB Straubel. The company is named after the electrical engineer and physicist Nikola Tesla and is based in Palo Alto, California. The company specializes in electric cars, energy charging equipment and is known for its many unique technological features. Upon founding the company in July, 2013, Tesla's founders wanted to prove that electric cars could be better than gasoline-powered cars. Since then the company has rolled out a unique business plan focused on: direct sales, service, and a network of superchargers. Furthermore, the company has a two part business plan that details objectives of Tesla models priced at three different tiers and developing Tesla's to be autonomous. The company has released three models, Tesla Roadster, Model S, and Model X. Tesla faces ethical concerns on the issue of crashes and specifically where to assign responsibility in these crashes, as well as the issue of hacking.

About Tesla

History

Christie Nicolson, a multimedia science journalist, met Elon Musk for the first time at a party in 1989. Following introductions, the second sentence that Musk said was that he thinks a lot about cars^[1]. And there was good reason to. The electric motor is easier, cheaper, and more sensible long-term plan to power cars. Yet, the reason electric vehicles haven't overtaken gas-powered ones is due to three age-old concerns regarding the viability of electric cars: range, performance, and price. When Musk decided in 2003 to start making electric cars, there were high costs of entry that prevented any startup car company from succeeding. Yet, in the Silicon Valley, there were people in a small car technology company AC Propulsion ^[2], that were experimenting and making great bounds in EV breakthroughs. In 2003, a Californian engineer named JB Straubel was also tinkering with electric vehicles. He got the opportunity to pitch Musk for funding for a car project he was working on. Musk liked Straubel's idea a lot and Straubel later brought him to AC Propulsion. Musk was already running SpaceX at the time but wanted to fund AC Propulsion in bringing one of their prototypes into market. Unfortunately, the people at AC Propulsion didn't want to deal with the intricacies of that. Instead, they introduced Musk to three guys who also came by the company to present their ideas. Of the three, two were Martin Elberhard and Marc Tarpenning. They wanted to use AC Propulsion's technology and bring it to market as a new company called Tesla Motors but lacked the funding. It was a perfect match, Musk provided the money, allowing them the ability to create a car company.^[3]

Plans For the Future

Business Model

Like any new technology such as the first cell phone or computer, the R&D costs drive up the price of the product. Thus, Tesla had to develop a business plan ^[4] for the company on how to make, market, and sell their products. As a startup car company, Tesla had to use its money strategically, resulting in a unique approach to getting its first vehicle to market. Instead of building a relatively affordable car for mass production and marketing, Tesla took the opposite approach, focusing instead on creating a compelling car. Musk knew the company wouldn't be capable of building the mass market car they all wanted because they didn't have the economies of scale or a first model to work off. He decided that because their first car was going to be expensive regardless, that building a sports car would yield the most competitiveness with its gas alternatives. Once it established its brand through its first car, the Roadster, Tesla took a three-pronged approach to selling, servicing, and charging its electric vehicles:

• Direct Sales
  • Create an international network of company-owned showrooms and galleries
  • Owning the sales channel can help Tesla gain an advantage in the speed of its product development
  • Create a better customer buying experience
    • Unlike car dealerships, Tesla showrooms have no conflict of interest
    • Customers deal with Tesla-employed sales and service staffs
• Service
  • The company believes that opening a service center in a new area corresponds with increased customer demand
  • Combine their direct sales strategy with service centers in their newly expanded retail concept called “Service Plus"
  • Customers can charge or service their vehicles at the service centers or the Service Plus locations
  • Tesla employs Tesla Rangers, mobile technicians who can service vehicles from your house
• Supercharger Network
  • Create its own network of Supercharger stations where drivers can fully charge their Tesla vehicles for free
  • Building and owning these stations is to accelerate the rate of adoption for electric cars

Master Plan

In 2006, Elon Musk announced to the public that the overarching purpose of Tesla Motors is to society switch to using solar electricity. ^[5] Thus, to help make that idea a reality, Musk elaborated on a master plan, Part 1 being released in 2006 and Part 2 in 2016, both of which have been condensed below.

Part One

Step 1: High-priced, low volume car for the very rich. First, come out with an expensive and compelling first product that is worth the price. Hence, the Roadster, a legitimate Ferrari competitor that costs over $100,000.

Step 2: Mid-priced, mid-volume car for the rich. Use the profits from Step 1 to develop a Step 2 car. A luxury car that competes with $80,000 Mercedes or BMW products.

Step 3: Low-priced, high-volume car for the general population. Use the profits from Step 2 to develop a car that is affordable to the middle class, around the range of $35,000.

Part Two

With the master plan part one in the final stages of completion, Elon Musk published a "Part Deux" (Two) of his next master plan on July 20, 2016. ^[6] In short, Musk enumerated on four major points:

• Create solar roofs with seamlessly integrated battery storage

• Expand the electric vehicle product line to address all major industries

• Develop autonomous driving capability that is far safer than manual driving via massive fleet learning

• Enable your Tesla vehicle to make money for you when you aren't using it

Risks and Challenges

Dealership Model Policy

Tesla Motors employs a unique sales mechanism whereby they neither operate local dealership branches nor partner with existing dealerships to sell the company's vehicles. Rather, it operates a number of regional showrooms and "galleries" ^[7] which are owned and operated by the company itself. The company also sells vehicles directly to customers through its online site.

Various states have prevented Tesla from opening company-owned dealerships and others have restricted direct-to-consumer sales. In some states, laws had to be amended to allow Tesla to sell its vehicles directly to customers. As of the last quarter of 2016, laws amended in at least six states were changed in such a way to allow only Tesla to operate a manufacturer owner dealership model.^[8] Tesla won a victory at the end of 2016 in Virginia where it was permitted to operate both as a manufacturer and a dealer of its own vehicles. The business model calls for sales of the vehicles at uniform prices--whether purchased at the Tesla store or online.^[9]

Liability and Legal Regulation of Autonomous Vehicles

Every designer and manufacturer of autonomous systems faces the problem of how law at every level -- municipal, state, and federal -- will address concerns around autonomous driving. There are many issues under consideration by policymakers who are responsible for legislation to regulate autonomous vehicles, however the question of liability when autonomous systems fail to safely operate a vehicle is chief among them. At the end of March 2017, a Tesla model X in Phoenix in self-drive autopilot mode that stopped at a traffic light behind a motorcycle police officer began to inch forward bumping the officer's motorcycle, at which point the officer jumped off the motorcycle and backed away. Although no one was injured and there were no damages the incident renewed unsettles legal questions revolving around autonomous and driver-assisted vehicles.^[10]

In May of 2016 in Florida, a Tesla model S autopilot system did not recognize a semi turning in front of the car, resulting in the car slamming into the semi and the death of the human driver.^[11] The driver was watching a movie at the time and did not override the autopilot system.^[12] It was expected that the drivers family will bring a product liability case against Tesla arguing a design defect.^[11] Just a few months earlier, a Chinese Tesla driver using the autopilot system was killed in a crash. The court case on that fatality began in China in September 2016, the same month that Tesla issued a major update to its technology.^[12] Respected authorities indicate there is potential liability for Tesla and that class actions may potentially be filed by existing Tesla owners who would argue that the potential autopilot system defect reduces the potential value of their cars on resale.^[11] The National Highway Traffic Safety Administration investigated the Tesla autopilot system and in January 2017 closed its investigation stating a safety-related defect trend had not been identified. While they identified no hardware or software defect, the National Transportation Safety Board is responsible for finding the exact cause of the crash and are running their own inquiry into the event.^[13]

Tesla's founder and CEO, Elon Musk, has stated a belief that worldwide approval of fully autonomous driving systems will necessitate the gathering and processing of data from approximately 6 billion miles of driving with partially autonomous or non-autonomous vehicles. ^[6] When Musk stated this belief in mid-2016, he added that Tesla is currently collecting data at a rate of 3 million miles each day from its customers' driving. Legal issues arise however when manufacturers collect personally identifiable information from its customers' vehicles. Jessica L. Rich, director of the Bureau of Consumer Protection of the Federal Trade Commission, recognized privacy issues which can result from data sharing.^[14] Depending on the type of information that is shared consumer privacy issues can arise. The National Highway Traffic Safety Administration has also acknowledged that removing personally identifiable information of consumers from data collected by manufacturers on their autonomous vehicles will help consumer privacy. According to director Rich, companies should state their information collection and use practices in their privacy policies as required by the Consumer Privacy Bill of Rights.

Production Capacity

With Tesla's new Gigafactory in the works, the company expects production rate of 500,000 cars per year towards the end of the decade. As for electricity, by 2018 the Gigafactory is expected to reach full capacity of produce more lithium ion batteries annually than the worldwide production in 2013. ^[15]

Technology

Battery

Previous electric vehicles would use lead-acid batteries, which were heavy and limited. AC Propulsion, however, took inspiration from the laptop and phone industry's use of 18650 lithium-ion batteries. By combining several thousand, AA-sized lithium batteries, AC Propulsion created a truly innovative car battery, that far surpasses previous technologies. Tesla continued with augmenting the battery pack, allowing an increase in performance and range. One of the areas where Tesla outshines its competitors is in its packaging and cost of electric batteries. By designing a vehicle from the ground up, Tesla built its entire vehicle around the battery. What resulted was a flat slab that forms the floor of the car, enabling a very large battery without sacrificing interior space.

Autopilot

Autonomous driving is a key feature of Tesla's various models. On October 15, 2015, Tesla released an update over-the-air officially named Tesla Version 7.0, but would later be known as Autopilot. It allowed users to activate a feature in their Tesla that could make the vehicle autonomous under certain conditions. This feature requires infrequent driver intervention in order to safely operate the vehicle, thus the current iteration of Tesla vehicles is considered to satisfy the requirements of Level 3 autonomy.

The technology has been consistently proven to help people avoid accidents. ^{[16] [17]} While there is controversy regarding the safety of such technology, Elon Musk said that Autopilot can reduce accidents by as much as 50%.^[18]

Tesla's Autopilot system is made up of multiple ultrasonic sensors place all around the car. ^[19] These sensors can sense 16 feet in every direction which helps the car analyze and understand its environment, allowing it to steer itself in most situations. The sensors enable the vehicle to realize when something is too close and gauge when it is appropriate to safely change lanes. In addition, there is a forward-facing camera located on the top windshield that helps the car understand what obstacles are in front of the car. It can detect traffic, pedestrians, road signs, and many other things. The camera, radar, ultrasonic sensors and GPS all work together to constantly provide real-time feedback from the Tesla fleet. Over-the-air updates are used to continually improve the system and add new features to the Autopilot system This data is then used to improve the overall system.

Current Models

S-3-X-Y

While the Roadster is also a Tesla model, the only models in production currently are the S and X, with the third model, 3, coming late 2017 and model Y in late 2018. The model S, nicknamed the Whitestar while under production, was designed by Franz von Holzhausen. ^[20] One of the main features that was never seen before in any other car was the touchscreen. Tesla placed nearly all vehicle controls and function in this huge control center. In fact, the touchscreen was developed before the first iPad came out. Two other new features that didn't exist before were "Ludicrous Mode" speed, which on the high-performance P100D goes 0-60 mph acceleration in 2.5 seconds and Autopilot which allowed autonomous driving.

The next model Tesla released was the Model X. The most notable feature that came with this model was the "falcon wing" doors. Along with the release of the car, Tesla also introduced the Bioweapon Defense Mode which allowed users to go from breathing normally filtered air to hospital-grade atmosphere. The Model X was developed as the SUV version of the Model S, which allowed it to have a maximum of 7 seats.

Even though the Model 3 isn't ready for the public yet, prototype models show a re-oriented touchscreen.[2] Both the Model S's and X's screen is in portrait mode, but the Model 3's could be in landscape. There is also a chance that the production car will do away with traditional gauges and instruments. There's speculation that Tesla is also looking to make a Model Y which would be a crossover built on the same platform as the Model 3.

Other

On April 13, 2017, CEO Elon Musk announced the arrival of a Tesla cargo truck, aimed at expanding their role in electric vehicles into the cargo transport market ^[21].

Ethical Implications

Crashes

One of the main talking points in conversations revolving around autonomous cars involves figuring out how responsibility will be handled in crashes involving autonomous cars. With Tesla's "autopilot" feature becoming street-legal, the topic has become even more important.

On May 7, 2016, Joshua Brown was killed in an accident while driving in his Tesla "Model S". Brown's vehicle was in autopilot mode when a white tractor-trailer merged left onto the highway^[22]. The Autopilot system was unable to detect the tractor-trailer, causing vehicles to collide. In a blog post titled "A Tragic Loss" the Tesla Team stated "Neither Autopilot nor the driver noticed the white side of the tractor trailer against a brightly lit sky, so the brake was not applied." Throughout the duration of the blog post, Tesla reiterated that drivers are made well aware that the technology is only in a "public beta phase" and are still responsible for the control of their own vehicle^[23]. W. Kip Viscusi, a product liability scholar from Vanderbilt Law School contested Tesla's point stating "A reasonable consumer might expect [autopilot] to work better, that you wouldn't be crashing into a semi that crossed the highway."^[22]

On March 23, 2018, Walter Huang was killed in an automobile accident while occupying his Tesla Model X^[24]. The vehicle was in autopilot mode at the time of the crash. Huang's family is seeking to take legal action against Tesla and believe that the autopilot system is defective and at fault for the crash. Tesla has claimed that their system did not fail and that the driver was responsible for the crash. They claim that the vehicle logs suggest that Huang's Hands were detected off the wheel 6 seconds before the crash, and that he had 5 seconds and 150 meters of vision to detect the object in the way. They also claim that the crash attenuator on the highway was previously damaged in another accident, and that was the reason for the severity of the crash. This crash is the third known fatal accident to occur in a Tesla vehicle while autopilot was engaged. The case is currently ongoing.

Case Update

A Tweet from Elon Musk on April 2, 2018.

On April 11, 2018, Tesla officially exited an agreement previously held with the National Transportation Safety Board (NTSB) ^[25]. Under the agreement, Tesla was working with the NTSB to investigate the crash and therefore could not release information that they had found. In retaliation to Tesla's move to exit the agreement, which gives Tesla the opportunity to share investigation findings, the NTSB released a statement on April 12th removing Tesla from the investigation ^[26]. Tesla still remains a part of the investigation party of two other ongoing cases relating to Tesla crashes. The disagreements in the investigation arise from differences in opinion on the timeline of making information public, with Tesla making a statement a week after the accident that the driver was at fault ^[27].

Hacking

In 2015, researchers Kevin Maheffy and Marc Rogers revealed that they were able to hack into the Model S car through its entertainment system. ^[28] Maheffy and Rogers spent roughly one year uncovering the Model S's vulnerabilities, and ultimately discovered a way to manipulate the car's locks, control the radio, activate its emergency breaks, and start its engine. A similar incident had occurred a month earlier, when Chrysler had to recall 1.4 million Jeeps after researchers uncovered a bug that allowed them to remotely hack into the Chrysler cars through a wireless connection. ^{[29] [30]} However, unlike the Chrysler vulnerability, Maheffy and Rogers couldn't hack into the Model S without having physical access to the car itself, leading Maheffy to state that he feels "more secure driving a Model S than any other connected car on the road".^[31] However, a vulnerability in Apple's WebKit could potentially allow for remote hacking by tricking a user into downloading malicious software from within the car. Following these discoveries, Maheffy and Rogers worked with Tesla to fix the vulnerabilities, and Tesla issued a patch to update the Model S's software on the same day that the researchers revealed their discoveries to the world. ^[32]

Though Tesla implemented security patches to remedy these exploits, vulnerabilities with Tesla's API (Application Programming Interface) are exploitable because their undocumented API is open source. ^[33] Teslas constantly connect to the internet, even when the car is not running. Smartphone users can use the Tesla mobile application to connect to the car to gain insights about the car such as mileage, internal temperature, percent charged as well as many other metrics. The mobile application also allows users to set car functions and control the car's headlights, unlock the car, start the engine, as well as honk the horn. ^[34] The Tesla mobile application connects to Tesla's API to extract information and control a given car based on an account username and password. If a Tesla owner's account account is compromised, an attacker can connect to their car. If this were to occur, an adversary would be able to monitor a car as well as execute arbitrary commands that may put an owner's well-being at risk.

Responsibility

Accidents involving Tesla's autopilot feature have led to contention surrounding driver responsibility during autonomous operation. Many argue that the driver should be to blame, since customers agree to the company's standard agreement to monitor the road at all times before purchasing the vehicle, including circumstances where the vehicle cannot make proper decisions. Tesla also labels its technology as being in the beta stage of development, meaning it is still undergoing testing and isn't finalized ^[35]. Opponents argue that just because customers agreed to monitor the road at all times doesn't necessarily mean they should bear all the responsibility. Since the technology is still in beta, they claim that Tesla is using its customers as guinea pigs and putting them in danger on public roads without a finalized product. They also argue that customers are not fully informed of the risks when they sign the standard agreements, and thus are not aware of the car's technological limitations. ^[36]

The debate surrounding whether or not companies should be permitted to beta-test autonomous driving technology on public roads has been ongoing before Tesla's Autopilot. Even if the user consented to the testing, other drivers and pedestrians around the car have not, yet they are still at risk. This comparison likens beta-testing on public roads to human-subjects research, which is usually governed by an ethics board. As of 2016, Tesla doesn't have an ethics board. However, most states turn a blind eye to the issue as they focus more on the innovation and the economic benefits of technology. Consequently, there are few incentives for companies to stop beta-testing automated cars.

Another issue about responsibility is informed consent. It is questionable whether beta-testers for Tesla cars know about the risks involved such as death. While drivers using Tesla's Autopilot feature could be likened to pilots monitoring their airplane's auto-pilot system, the situation is different— Pilots are trained professionally, and they usually have a co-pilot as a backup. Drivers are only required to pass a driving test before they can start driving. Skepticism stems from this debate on the ability of drivers to handle such situations that involve quick hand-offs from autonomous to human control. Moreover, individuals may not have knowledge of the technological jargon and background pertinent to autonomous vehicles, leaving them more vulnerable to being uninformed.

References

1. ↑ "Washington Post: The 22 Most Memorable Quotes from the New Elon Musk Book Ranked" https://www.washingtonpost.com/news/innovations/wp/2015/05/11/the-22-most-memorable-quotes-from-the-new-elon-musk-book-ranked/?utm_term=.d0aac7909c05
2. ↑ "AC Propulsion Website" http://www.acpropulsion.com
3. ↑ "Tesla Rumors: How Tesla Began" http://teslarumors.com/HowTeslaBegan
4. ↑ "Tesla Website: "Mission for Tesla" https://www.tesla.com/blog/mission-tesla
5. ↑ "Tesla Website: Secret Tesla Motors Master Plan Just Between You and Me" https://www.tesla.com/blog/secret-tesla-motors-master-plan-just-between-you-and-me
6. ↑ ^{6.0 6.1} Musk, Elon. "Master Plan, Part Deux." Tesla, Inc. Tesla Motors, 20 July 2016. Web. https://www.tesla.com/blog/master-plan-part-deux
7. ↑ Tesla Locations. https://www.tesla.com/findus/list/stores/United%20States
8. ↑ "Is Tesla's retail road a dead end?" http://www.autonews.com/article/20161003/OEM/310039951/is-teslas-retail-road-a-dead-end%3F
9. ↑ "Tesla Just Won a Major Regulatory Battle" http://fortune.com/2016/11/30/tesla-richmond-virginia-store/
10. ↑ "Who is liable if a self-driving car crashes? Tesla mishap raises issues" https://www.usatoday.com/story/money/cars/2017/04/03/tesla-mishap-raises-issues-self-driving-liability/99880620/
11. ↑ ^{11.0 11.1 11.2} "Who's responsible when an autonomous car crashes?" http://money.cnn.com/2016/07/07/technology/tesla-liability-risk/
12. ↑ ^{12.0 12.1} "Should Carmakers Be Liable When A Self-Driving Car Crashes?" https://www.forbes.com/sites/omribenshahar/2016/09/22/should-carmakers-be-liable-when-a-self-driving-car-crashes/#1e75e8e048fb
13. ↑ "After Probing Tesla’s Deadly Crash, Feds Say Yay to Self-Driving" https://www.wired.com/2017/01/probing-teslas-deadly-crash-feds-say-yay-self-driving/
14. ↑ "FTC Issues Comments On NHTSA's Federal Automated Vehicles Policy" http://www.mondaq.com/unitedstates/x/550624/FTC+Issues+Comments+On+NHTSAs+Federal+Automated+Vehicles+Policy
15. ↑ https://www.tesla.com/gigafactory
16. ↑ "Business Insider: Autopilot in Tesla Model S Prevents Truck Accident 2016" http://www.businessinsider.com/autopilot-in-tesla-model-s-prevents-truck-accident-2016-4
17. ↑ "Youtube [https://www.youtube.com/watch?t=17&v=EJmhpgW0Dmc
18. ↑ "Business Insider: Teslas Autopilot Reduces Accidents 2016" http://www.businessinsider.com/teslas-autopilot-reduces-accidents-2016-4
19. ↑ "Technology Review: Tesla Announces New Sensors and Puts the Brakes on Autopilot" https://www.technologyreview.com/s/602703/tesla-announces-new-sensors-and-puts-the-brakes-on-autopilot/
20. ↑ Gizmodo: "Tesla Whitestar Electric Sedan 4 Doors Half the Price of the Roadster" http://gizmodo.com/237952/tesla-whitestar-electric-sedan-4-doors-half-the-price-of-the-roadster
21. ↑ Elon Musk says Tesla semi truck to debut in September, kicking clean-truck race into high gear http://www.latimes.com/business/la-fi-tesla-semi-truck-20170413-story.html
22. ↑ ^{22.0 22.1} McFarland, Matt. Who's responsible when an autonomous car crashes?. 07 Jul, 2016. "CNN Tech"
23. ↑ The Tesla Team. A Tragic Loss. 30 Jun, 2016. "TESLA"
24. ↑ Felton, Ryan. Tesla Says Autopilot Was On Before Fatal Model X Crash, But That Driver Didn’t Abide Warnings. 30 Mar, 2018. [1]
25. ↑ http://fortune.com/2018/04/12/tesla-withdraws-ntsb-fatal-model-x-crash-investigation/
26. ↑ https://www.ntsb.gov/news/press-releases/Pages/NR20180412.aspx
27. ↑ https://www.wired.com/story/tesla-autopilot-investigation-ntsb-crash/
28. ↑ Researchers Hack a Tesla Model S, Bring Car to a Stop http://www.latimes.com/business/la-fi-hy-tesla-hack-20150806-story.html
29. ↑ After Jeep Hack, Chrysler Recalls 1.4M Vehicles for Bug Fix https://www.wired.com/2015/07/jeep-hack-chrysler-recalls-1-4m-vehicles-bug-fix/
30. ↑ Hackers Remotely Kill a Jeep on the Highway—With Me in It https://www.wired.com/2015/07/hackers-remotely-kill-jeep-highway/
31. ↑ The new assembly line: 3 best practices for building (secure) connected cars https://blog.lookout.com/blog/2015/08/06/tesla-research/
32. ↑ Researchers Hacked a Model S, But Tesla’s Already Released a Patch https://www.wired.com/2015/08/researchers-hacked-model-s-teslas-already/
33. ↑ Tesla Model S JSON API http://docs.timdorr.apiary.io
34. ↑ Google Play: Tesla Motors https://play.google.com/store/apps/details?id=com.teslamotors.tesla&hl=en
35. ↑ Who's responsible when an autopilot car crashes? http://www.nwahomepage.com/news/whos-responsible-when-an-autopilot-car-crashes
36. ↑ Is Tesla Responsible for the Deadly Crash On Auto-Pilot? Maybe. https://www.forbes.com/sites/patricklin/2016/07/01/is-tesla-responsible-for-the-deadly-crash-on-auto-pilot-maybe/#bf9fed31c070