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Tesla is what happens when a car company behaves like a tech company

First, a special announcement! As a special birthday present (hello yes, it's my birthday!), Kara Swi
This Week in Elon
Tesla is what happens when a car company behaves like a tech company
By Elizabeth Lopatto • Issue #14 • View online
First, a special announcement! As a special birthday present (hello yes, it’s my birthday!), Kara Swisher stopped by This Week in Elon, podcast version, to fill me in on her interview with Elon Musk, publishing tomorrow. She says he’s working fewer hours and seems much happier and more like himself as a result. You should definitely listen to the interview — there’s a bunch of color on what products Musk plans to make in the future, and which ones he definitely doesn’t. And now, on with the newsletter.
The problem with running a car company like a software company is that people expect a car company to run like a car company!
So on Friday, when Tesla updated its pricing on the Model 3 Performance to include the Performance Upgrades Package for free, some Tesla owners were miffed. They’d paid $5,000 for a feature that was now… free. “In hindsight, it looks like Tesla solely created that $5,000 package to upcharge early buyers knowing that there will be plenty of demand for the vehicle at the launch due to the reservation holders waiting for the performance version,” Fred Lambert wrote on Elektrek.
Lambert was among those who’d paid $5,000 for the package. And he was pissed. “This is a shitty thing to do to a bunch of people who have been waiting for their cars for years — just to now to be devalued by $5,000 a month into ownership,” Lambert tweeted at Musk. (Musk replied, “If you want $5k refund & free Supercharging turned off, we will do that.”)
Software companies pull shit like this pretty routinely. You’ve purchased a product and suddenly it’s discounted or free. You get used to a user interface and it changes on you abruptly, without your input. Not just software companies, either — if you aren’t savvy enough to know that Apple introduces new phones in September, which means discounts on the old phones, and you buy one of those old phones in August, that’s the boat you’re in too. Now, an iPhone is marginally less expensive than a car, but it’s basically the same thing.
But obviously, mores between car companies and tech companies differ, and as car companies start to behave more like tech companies, folks like Lambert — the early adopters — are likely to find themselves in situations they didn’t anticipate. Something similar went on with over-the-air updates earlier this year: the update to the braking system that improved its breaking distance by 19 feet genuinely freaked people out. What else could the car update? We’re pretty used to a car being, you know, a car, and nothing really changing unless we bring it into the shop (or tinker with it ourselves). Over-the-air updates totally upend this relationship!
Similarly, with CEOs: most of us expect car company CEOs in the mode of Alfred Sloan, who invented the modern corporation as we understand it. Musk very clearly isn’t that; his flamboyant style and tendency to shoot from the hip is more in line with the crop of entrepreneurs that Silicon Valley spit out in the 1990s: the Boy Kings. Generation X in action, folks — you called them slackers in their 20s and they never forgave you.
Watching those cultures collide is part of the fun of Tesla, for my money. Traditional automakers are golf-ball stodgy; Tesla is kind of bananas at least in part because it’s aiming to create a future. And the traditional automakers have to compete! The thing that they have to offer people like Lambert is that their pricing models are likely to be slightly more predictable than what’s going on right now with Tesla. Their CEOs are less likely to wild out on Twitter. In some respects, it becomes a question of personal orientation: do you want the thing where you know what to expect, or do you want the thing that’s so cutting-edge you’re going to have your expectations violated at basically every turn?
This is just a longwinded way of noticing that Musk deleted his title from his biography on Tesla basically just to troll. As Matt Levine noted in his newsletter, Musk is not the nothing of Tesla, no matter what jokes he’s making on Twitter: “You can be chairman and CEO without having your website say ‘Chairman and CEO.’ There’s no, like, legally binding effect of the website. It’s a website.”
It is perhaps also worth noting that Musk’s compensation plan doesn’t require him to remain CEO; the only other roles he can take, though, are executive chairman or chief product officer. In those roles, any CEO would have to report to him or he doesn’t get his money.
Musk doesn’t seem like he super cares about money qua money, but he does seem to care a lot about the businesses he’s built with that money. Removing himself from the CEO role to be… nothing… a role that isn’t specified in his compensation plan is a little beyond the pale, even for Musk. He tends to use his money to boost his own companies; after all, he just spent $10 million on Tesla shares on Tuesday and plans to buy $20 million more. Arguably he’d want his compensation if only to keep Tesla moving forward. So, yeah: still CEO.
But it’s been sort of a relief to watch Musk return to harmless goofiness after his performance earlier this year — yes, he’s not exactly normal but he’s normal-by-Elon-Musk-standards.

Let’s check in with the money people! There is still a criminal probe into Tesla, so that’s a thing to watch for. Larry Ellison is very happy with Tesla, which he says is his second-largest investment. But not all investors are as happy as Ellison, and a group of them have sent a testy letter regarding the board’s independence. I haven’t seen any public chatter about who the new chair of Tesla will be. If you know, honey, call me. It’s my birthday! Give me a present!
Tesla Faces Deepening Criminal Probe Over Whether It Misstated Production Figures
Oracle's Ellison Defends Elon Musk, Says Tesla (TSLA) is His Second-Largest Investment
These Tesla investors want even bigger changes on its board - The Washington Post
In celebrity news, Tyler the Creator fell asleep at the wheel of his Tesla and wrapped his Tesla around another car but walked away without a scratch. If there are any celebrities reading this newsletter: hire a driver, you’re fucking rich!
Tyler the Creator Destroys Tesla in Scary Early Morning Crash After Falling Asleep at the Wheel
I’m a longtime Rodney Brooks fangirl. It’s pretty rare for an engineer to make a meaningful contribution to philosophy of mind, and yet “Intelligence Without Representationbangs. Anyway the following piece by Brooks uses a bunch of Musk’s technology to try to construct a framework for judging what kind of tech succeeds, and it’s worth reading even if you aren’t a Brooks fangirl.
The Rodney Brooks Rules for Predicting a Technology’s Commercial Success - IEEE Spectrum
Reuters is reporting firings at SpaceX as the company re-evaluates its Starlink program. Meanwhile, Popular Mechanics checks in on SpaceX’s Texas spaceport. And the Crew Dragon comes closer to carrying people.
Musk shakes up SpaceX in race to make satellite launch window: Sources
SpaceX Launch in Texas | SpaceX Falcon Rocket Launch
SpaceX Fires Rocket for Commercial Crew Test Flight (Photo)
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Elizabeth Lopatto

This Week in Elon is a segment on The Vergecast hosted by Deputy Editor Elizabeth Lopatto and now available as a limited-run newsletter. If you want all of the dizzying news about Elon Musk and companies delivered to your inbox on Thursdays, subscribe!

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