The Deadly Recklessness of the Self-Driving Car Industry

Autonomous vehicles were supposed to make driving safer, and they may yet—some of the more optimistic research indicates self-driving cars could save tens of thousands of lives a year in the U.S. alone. But so far, a recklessness has defined the culture of the largest companies pursuing the technology—Uber, Google, and arguably even Tesla—and has led directly to unnecessary crashes, injury, even death.

Let’s be clear about this, because it seems to me that these companies have gotten a bit of a pass for undertaking a difficult, potentially ‘revolutionary’ technology, and because blame can appear nebulous in car crashes, or in these cases can be directed toward the humans who were supposed to be watching the road. These companies’ actions (or sometimes, lack of action) have led to loss of life and limb. In the process, they have darkened the outlook for the field in general, sapping public trust in self-driving cars and delaying the rollout of what many hope will be a life-saving technology.

The litany of failures of the most visible companies pursuing self-driving technologies underlines the fact that the safety of autonomous systems are only as good as the people and organizations building them.

  • According to an email recently obtained by the Information, Uber’s self-driving car division may not only be reckless, but outright negligent. The company’s executive staff reportedly ignored detailed calls from its own safety team and continued unsafe practices and a pedestrian died. Before that, a host of accidents and near-misses had gone unheeded.
  • At least one major executive in Google’s autonomous car division reportedly exempted himself from test program protocol, directly caused a serious crash, injured his passenger, and never informed police that it was caused by a self-driving car. Waymo, now a subsidiary of Google, has been involved, by my count, in 21 reported crashes this year, according to California DMV records, though it was at fault in one.
  • On two separate occasions, Autopilot, Tesla’s semi-autonomous driving system, was engaged when drivers suffered fatal car crashes. In October, a Florida Tesla owner sued the company after his car was in a serious crash while on Autopilot, claiming the company “has duped consumers … into believing that the autopilot system it offers with Tesla vehicles at additional cost can safely transport passengers at highway speeds with minimal input and oversight from those passengers.” (Tesla, of course, refutes this characterization.) These cases are muddier because Tesla explicitly warns not to let the system drive the car entirely and has safeguards installed to deter this type of bad driver behavior. Yet Tesla continues to advertise that it offers “Full Self-Driving Hardware on All Cars” on its website, and its own engineers told regulators that they anticipated some drivers would rely fully on the system. Yet publicly, Tesla continues to deny that their system might engender in drivers any dangerous reliance on its semi-autonomous system.

No wonder public the public is wary of self-driving cars.

“At the moment, testing in the U.S. is pretty reckless,” says Dr. Jack Stilgoe, a senior lecturer in the science and technology department at University College London, and the principal investigator in the forthcoming Driverless Futures project. “It is being left to companies to decide what risks are acceptable.” Often, these companies have clearly decided that very high risks are acceptable.

The newest and most glaring example of just how reckless corporations in the autonomous vehicle space can be involves the now-infamous fatal crash in Tempe, Arizona, where one of Uber’s cars struck and killed a 49-year-old pedestrian. The Information obtained an email reportedly sent by Robbie Miller, a former manager in the testing-operations group, to seven Uber executives, including the head of the company’s autonomous vehicle unit, warning that the software powering the taxis was faulty and that the backup drivers weren’t adequately trained.

“The cars are routinely in accidents resulting in damage,” Miller wrote. “This is usually the result of poor behavior of the operator or the AV technology. A car was damaged nearly every other day in February. We shouldn’t be hitting things every 15,000 miles. Repeated infractions for poor driving rarely results in termination. Several of the drivers appear to not have been properly vetted or trained.”

That’s nuts. Hundreds of self-driving cars were on the road at the time, in San Francisco, Pittsburgh, Santa Fe, and elsewhere. The AV technology was demonstrably faulty, the backup drivers weren’t staying alert, and despite repeated incidents—some clearly dangerous—nothing was being addressed. Five days after the date of Miller’s email, a Volvo using Uber’s self-driving software struck Elaine Herzberg while she was slowly crossing the street with her bicycle and killed her. The driver was apparently streaming The Voice on Hulu at the time of the accident.

This tragedy was not a freak malfunction of some cutting-edge technology—it is the entirely predictable byproduct of corporate malfeasance.

If Uber is the worst actor in this case, it is not the only bad one—and it was building on a culture established years before, where a need to be first to the technology eclipsed safety concerns.

Anthony Levandowski, the former lead of Google’s self-driving car project, was notoriously brash, careless, and egregiously reckless. It’s probably fair to say we don’t even know how many crashes the self-driving cars he oversaw were involved in. Here’s a key example, as reported by Charles Duhigg in the New Yorker:

“One day in 2011, a Google executive named Isaac Taylor learned that, while he was on paternity leave, Levandowski had modified the cars’ software so that he could take them on otherwise forbidden routes. A Google executive recalls witnessing Taylor and Levandowski shouting at each other. Levandowski told Taylor that the only way to show him why his approach was necessary was to take a ride together. The men, both still furious, jumped into a self-driving Prius and headed off.

“The car went onto a freeway, where it travelled past an on-ramp. According to people with knowledge of events that day, the Prius accidentally boxed in another vehicle, a Camry. A human driver could easily have handled the situation by slowing down and letting the Camry merge into traffic, but Google’s software wasn’t prepared for this scenario. The cars continued speeding down the freeway side by side. The Camry’s driver jerked his car onto the right shoulder. Then, apparently trying to avoid a guardrail, he veered to the left; the Camry pinwheeled across the freeway and into the median. Levandowski, who was acting as the safety driver, swerved hard to avoid colliding with the Camry, causing Taylor to injure his spine so severely that he eventually required multiple surgeries.

“The Prius regained control and turned a corner on the freeway, leaving the Camry behind. Levandowski and Taylor didn’t know how badly damaged the Camry was. They didn’t go back to check on the other driver or to see if anyone else had been hurt. Neither they nor other Google executives made inquiries with the authorities. The police were not informed that a self-driving algorithm had contributed to the accident.”

Levandowski’s penchant for putting AV testing before safety—which is now quite well documented—and the fact that the police were not informed are the key parts here. Google for a long time appeared to be candid about its autonomous vehicle program; so much so that Wired reported that a Google car caused its “first crash” in 2016, five years after the Levandowski incident.

This, combined with the Uber revelations, should make us think deeply about what level of trust and transparency we should demand from the companies doing autonomous vehicle testing on our shared roadways.

In December 2016, however, Google split its autonomous car division into Waymo, where no similarly serious crash events have been reported. “Anthony Levandowki’s disregard for safety does not reflect the mission and values we have at Waymo where hundreds of engineers on our team work each day to bring this technology safely to our road,” a spokesperson told me in an email. “Our company was founded to improve road safety, and so we hold ourselves to a high safety standard.” According to California’s autonomous vehicle crash log, Waymo has been involved in those 21 minor accidents this year, and was only at fault in one. That is a pretty good track record, assuming all accidents were accurately reported, and Waymo’s emphasis on safety appears to point the way forward for the industry if it hopes to regain the public’s trust.

For its part, Uber took its autonomous vehicles off the roads and says it has overhauled its self-driving car testing procedures. Though when I asked an Uber spokesperson how it has changed its corporate policies since the accident, she sent me the same exact boilerplate response that was sent to the Information (and my colleague Jennings Brown): “Right now the entire team is focused on safely and responsibly returning to the road in self-driving mode. We have every confidence in the work that the team is doing to get us there. Our team remains committed to implementing key safety improvements, and we intend to resume on-the-road self-driving testing only when these improvements have been implemented and we have received authorization from the Pennsylvania Department of Transportation.”

Uber refused to answer questions about whether changes had been made to company culture, whether anyone at the company had been held responsible, or anything, really, beyond that statement and publicly posted materials. Uber did not deny it was responsible for the crash.

In the first week of December 2018, police successfully stopped a Tesla Model S whose driver was asleep at the wheel while it was barreling down the road at 70 mph. He had Autopilot enabled and had traveled 17 miles before being pulled over. In the October lawsuit against Tesla mentioned earlier, Shawn Hudson, the Florida man whose Tesla crashed while on Autopilot, claimed he had been misled into believing the car could function autonomously. He said he bought the Tesla in part because of its Autopilot feature, which he thought would allow him to relax on his long commute, and so routinely wrote emails and checked his phone while on the road—including when the crash took place.

Tesla is in a unique position. As previously noted, it has long shipped its cars with what it describes as “full self-driving hardware” while also issuing advisories not to rely completely on Autopilot, the semi-autonomous driving system that costs an extra $5,000. It is continuously upgrading its software, edging drivers already on the road closer to self-driving actuality.

“Tesla,” Stilgoe tells me, “is turning a blind eye to their drivers’ own experiments with Autopilot. People are using Autopilot irresponsibly, and Tesla are overlooking it because they are gathering data. And Tesla is also misleading people by saying that they are selling self-driving cars. They use the phrase ‘full self-driving hardware.’”


Indeed, Elon Musk himself was essentially advertising Tesla’s self-driving potential in a no-hands bit of derring-do on nothing less than a 60 Minutes appearance. Tesla stresses that during the buying process, its sales team demonstrates the proper use of the Autopilot, disabusing buyers of the notion that it functions anything like a self-driving car. It has added features that turn off Autopilot if users go hands-free too long. Still, marketing and the power of suggestion—not to mention the long-held geek dream of riding in self-driving cars—are potent forces, and the crashes and incidents in which Autopilot is being misused as a self-driving system are nonetheless continuing.

To overtly market its product this way is a conscious decision, and it likely helps instill faith in Tesla drivers that they can use the feature in the manner the marketing language seems to describe. The problem is “what happens when the driver is over-reliant on the system,” as Thatcham Research, which investigated just how good the software really is in a segment for the BBC, explained. (Spoiler alert: There are a number of scenarios in which Teslas running on Autopilot crashed into objects in front of them.) But that doesn’t stop the humans inside them from becoming lulled into a false sense of security.

Herein lies the second question with regards to Tesla’s responsibility to its drivers—its own engineers knew this was a distinct safety concern. (This is also why I think it’s a little unfair to heap all the blame on the “safety driver” who was supposed to be watching the road in the fatal Uber crash; for one thing, Uber apparently cut the safety drivers down from two to one—Miller called for reinstating two drivers—and for another, it is human nature to be lulled into a sense of security as evidence accumulates that we are safe after hours of non-events, and after, presumably, we get very, very bored.) In fact, one of Waymo’s recent crashes occurred after its lone safety driver fell asleep at the wheel and accidentally turned the system off.

In the report it released after the first fatal crash, the National Highway Traffic Safety Administration—which cleared Tesla of wrongdoing—nonetheless found that:

“[O]ver the course of researching and developing Autopilot, Tesla considered the possibility that drivers could misuse the system in a variety of ways, including those identified above – i.e., through mode confusion, distracted driving, and use of the system outside preferred environments and conditions. Included in the types of driver distraction that Tesla engineers considered are that a driver might fail to pay attention, fall asleep, or become incapactitated [sic] while using Autopilot. The potential for driver misuse was evaluated as part of Tesla’s design process and solutions were tested, validated, and incorporated into the wide release of the product. It appears that Tesla’s evaluation of driver misuse and its resulting actions addressed the unreasonable risk to safety that may be presented by such misuse.”

In other words, Tesla’s team knows that some drivers are going to use Autopilot as an actual self-driving mode or otherwise end up relying fully on the system. And while the NHTSA found that Tesla’s engineers had accounted for those elements, the system has still been in use during two fatal crashes and many more accidents. (Meanwhile, the National Transportation Safety Board found that some of the blame did in fact lie with Tesla, for not doing enough to dissuade drivers from abusing Autopilot).

After hours of phone calls with Tesla spokespeople, during which the company refused to speak on the record about the tension between promoting its vehicles with language like “full self-driving hardware on all cars” and then insisting drivers who buy Teslas not treat them as self-driving cars (and during which one of the spokespeople kindly told me it sounds like I need to think about my story a little more), the company offered only the statement it issued following the Florida lawsuit in back in October. That statement is as follows: “Tesla has always been clear that Autopilot doesn’t make the car impervious to all accidents, and Tesla goes to great lengths to provide clear instructions about what Autopilot is and is not, including by offering driver instructions when owners test drive and take delivery of their car, before drivers enable Autopilot, and every single time they use Autopilot, as well as through the Owner’s Manual and Release Notes for software updates.”

Look, driving is already a messy, dangerous business. High-functioning self-driving cars could be a godsend in terms of human health gains, and testing them in traffic is always going to be a thorny matter both logistically and ethically. In Tesla’s case, we have no way of knowing whether some of the Autopilot users would have been driving so distractedly that they would have caused accidents regardless. But the fact is, those of us already on the road in our not-so-autonomous cars have little to no say over how we coexist with self-driving ones. Over whether or not we’re sharing the streets with AVs running on shoddy software or overseen by less-than-alert human drivers because executives don’t want to lag in their quest to vacuum up road data or miss a sales opportunity.

Thus far, tech giants in a “race that they need to win,” as Levandowski once put it, have made those decisions for us. Short of pushing for legislation to regulate the testing of autonomous vehicles more stringently, demanding companies that make injurious and fatal transgressions be properly held accountable seems a reasonable recourse. Unless these companies dramatically improve their efforts to prioritize safety and openness over speed of development and salesmanship, they risk both inflicting further harm and alienating a public already wary of the prospect of self-driving cars.

“We still have little idea what most people would consider to be an acceptable risk, but my guess would be that members of the public would not be satisfied even if we knew that self-driving cars were a bit safer than human drivers,” Stilgoe says. “A crash, any crash, is a catastrophe. The self-driving car industry has got to work a lot harder to win the argument on safety.”

Many Drivers Rely Too Much on New Car Safety Features

New cars are now coming out with high-tech safety features designed to prevent crashes. But if you don’t know how they work you could be inviting an accident, new research suggests.

These advanced driver assistance systems (ADAS) — including blind-spot monitoring, forward-collision warning and lane-keeping assist — can, when used properly, make your driving safer. But many drivers are unaware of the limitations of these advances, the authors of the report said.

“When properly utilized, advanced driver assistance system technologies have the potential to prevent 40 percent of all vehicle crashes and nearly 30 percent of traffic deaths,” said Dr. David Yang, executive director of the AAA Foundation for Traffic Safety.

But the new findings, published Sept. 26 by the foundation, show that a lot of work needs to be done in educating drivers about the limitations of these devices and their proper use, he added.

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For example, nearly eight out of 10 drivers with blind-spot monitoring systems didn’t know the limitations of this feature. These systems only work when a car is traveling in a driver’s blind spot, and many systems do not detect vehicles traveling at high speeds.

Not understanding driver assistance systems may lead to misuse or over-reliance and could result in a deadly crash, the researchers said.

In the United States in 2016, more than 37,400 people were killed in traffic crashes — a 5 percent increase from 2015, according to a AAA news release.

For the new study, researchers from the University of Iowa surveyed drivers who purchased a 2016 or 2017 car with ADAS technologies.

The investigators evaluated drivers’ opinions, awareness and understanding of these safety features, and found that most did not know or understand the limitations of these systems.

Most drivers (80 percent) did not know the limitations of blind-spot detectors. Many incorrectly believed that the systems could monitor the road behind the car or reliably detect bicycles, pedestrians and vehicles passing at high speed.

As for forward-collision warning and automatic emergency braking systems, nearly 40 percent did not know the systems’ limits or confused the two technologies.

Drivers incorrectly assumed that forward-collision warning would apply the brakes in the case of an emergency, but the technology is only designed to deliver a warning signal, the researchers said.

In addition, one in six drivers didn’t know if their vehicle had automatic emergency braking.

About 25 percent of drivers felt comfortable that blind-spot systems would pick up pedestrians and traffic, so they didn’t do visual checks or look over their shoulder for oncoming traffic or pedestrians.

Moreover, about 25 percent of drivers with forward-collision warning or lane-departure warning systems felt comfortable doing other tasks while driving.

“New vehicle safety technology is designed to make driving safer, but it does not replace the important role each of us plays behind the wheel,” Yang said in the news release.

These findings should motivate more focus on the importance of educating new and used car buyers about how safety technologies work, the study authors said.

Only about half of the drivers who purchased a new car from a dealership recalled being offered training on the new technology. Among those who were, nearly 90 percent completed the training.

AAA advises all new car owners to read up on the car’s safety devices and actually see how they work. Drivers should also ask the dealer questions to be sure they understand what these safety features will and will not do.

4 Secrets From the Designer of Tesla’s Award-Winning Model 3

Automobile Magazine recently awarded the Design of the Year Award to the Tesla Model 3. In praise of the car, the magazine wrote, “[It’s] simple and straightforward, perfectly proportioned with minimal extraneous detailing.”

The Tesla Model 3.

“It has all been done with unmistakably good taste,” the article continues. “We have the impression that the studied simplicity of both interior and exterior will let this car age extremely well, that in 10 years it will still look contemporary and beautifully understated.”

Automobile’s Robert Cumberford sat down with Tesla’s Chief Designer, Franz von Holzhausen, to learn more about his approach to the design of Tesla’s newest sedan. Von Holzhausen previously created the Pontiac Solstice and was in charge of Mazda design in California before joining Tesla.

Here are four of the Von Holzhausen’s most fascinating quotes from his interview.

4. On the Original Design Brief for the Model 3

“It was essentially customer-driven. They saw the Model S as a great car, but there was a desire for something 10 to 20 percent smaller… We thought the $35,000 price point would work. We wanted five seats, more interior space, and to keep the fastback silhouette.”

3. What Model 3 Shares With the Model S and Model X

“For instance, we knew that flush door handles were important, but we simplified the mechanism, so they are not as costly. We kept good aerodynamics for range as well as to make the car sporty. Not silliness, just clean and sporty.”

2. On the Thinking Behind Some of Model 3’s Design Choices

“To keep the fastback profile, we eliminated the liftgate and used a normal trunk lid. To keep a faster profile, we moved the structure ahead, to make sure the [head impact criteria] were all met. The big backlight is something we had experience with on the Model X windshield.”

1. Why the Model 3 Doesn’t Have a Front Grille

“That was a long time coming. We made the early cars less distinct from rivals but slowly came to this solution of how to keep a premium sports feel friendlier and happier than the luxury S. We changed that car, too, modifying 200 to 300 parts when the S was restyled without the painted ‘shield.’”

Volvo will launch its first all-electric car in 2019 to take on Tesla – here’s everything we know.

Volvo is looking to China for the future of its electric cars.

The carmaker said Wednesday that it plans to produce its first fully electric car in China and will export it around the world.

The Swedish automaker, which is owned by the Chinese company Geely, is making a big bet on electric vehicles.

In 2015, Volvo launched its XC90, which was its first vehicle with a hybrid powertrain. And in April 2016, the company vowed that it would sell one million electrified cars by 2025.

Volvo’s first fully electric car is slated to go into production in 2019. Here’s everything we know about the car so far.

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No More Noise Free Engines Will Allowed For Hybrid and Electrical Cars

No longer will electric vehicles be allowed to house completely noise free engines.  This is in a bid to try and stop any deaths or serious injuries from occurring because the pedestrian simply ‘could not hear the vehicle coming.’  Both electric and hybrid models will fall under the rule issued by the US National Highway Traffic Safety Administration and will be required to produce noise when moving at low speeds.

Many people feel this should have been the case from the start, but better late than never, eh? Electric cars have always been pretty silent since they were first introduced to the market, and until the dangers were recognized, it was once one of its selling points.  But, under the new rule, all newly manufactured electric vehicles that weigh 10,000 lbs or less must make an audible noise when traveling up to 19mph in any direction. The reason noise is not required at higher speeds is because wind noise and tire sounds will be apparent anyway.

The noise in which the vehicle makes when traveling under 19 mph will be up to the manufacturer to decide.  US Transportation Secretary, Anthony Foxx said, “ With more, quieter hybrid and electrical cars on the road, the ability for all pedestrians to hear as well as see the cars becomes an important factor in reducing the risk of possible crashes and improving safety.” As of September 1st 2019, all electric vehicle manufacturers will need to conform to the new standards.

Which Electric Car is the Greenest: The Battery or Fuel Cell Car?

New studies have been carried out that have compared the likes of battery and fuel cell cars to see which is better. The results appear to point in the direction of batteries. This may be surprising for some people but is down to the fact that hydrogen offers very little more than clean transportation whereas batteries can be used across the board for a range of different things.

The study compared the two types of cars based on a model where electric vehicles were more affordable. Lead author of the study, Markus Felgenhauer, a doctoral at the Technical University of Munich (TUM) says, “We found that investing in all-electric battery vehicles is a more economical choice for reducing carbon dioxide emissions, primarily due to their low cost and significantly higher energy efficiency.”

While electric cars are growing in popularity, there are still very few fuel cell cars around. However, the state where most new technology is developed and launched, California, has just awarded over $92 million to construct a network of 50 hydrogen refueling stations by the end of 2017. But currently, neither source is completely free of emissions. Some people connect to the grid to charge their battery electric cars and hydrogen cell car owners contribute through the industrial process used to extract the hydrogen in the first place.

And, the results of the tests were definitive. Felgenhauer said, “In terms of overall costs, we found that battery electric vehicles are better than fuel cell vehicles for reducing emissions. The analysis showed that to be cost competitive, fuel cell vehicles would have to be priced much lower than battery vehicles.” But, this is unlikely to happen in the near future, so therefore battery electric vehicles will remain the winners in being the greenest.

Toyota Create Breakthrough Long-Range EV Battery

As the EV race continues, one name that is catching up rather fast now is Japanese auto manufacturers, Toyota. They have just announced a breakthrough of all breakthroughs in the world of batteries and has developed what it says is, “the world’s first method for observing the behavior of lithium ions in an electrolyte when battery charges and discharges.” The big boys at Toyota say that within two or three years, once the breakthrough is commercialized, we could be looking at an improved battery range of an EV by as much as 15%.

The discovery took three years to come to fruition finally and for the company to be able to observe their work using a giant synchrotron located northeast of Kobe, Japan. This particular synchrotron is one of the largest in the world with a ring a diameter 5,000 ft wide. It was developed as a joint effort between the Japan Atomic Energy Research Institute and the RIKEN Institute. The synchrotron can be rented for $600 per hour if you intend to keep your research a secret or free if you’re happy to share and publish your research.

By getting the opportunity to study how the ions migrated from minus to plus, the researchers were able to see developing ion constipation during the charging and recharging phases. Toyota engineers are now looking to use this information and a new method of observing to develop more efficient batteries that hold a better charge and live a longer life.

12 Wi-Fi enabled driverless lorries complete week-long journey across Europe

Driverless trucks across Europe
The rear truck was led by a connection to the front vehicle

Six convoys of semi-automated “smart” trucks arrived in Rotterdam’s harbour on Wednesday after an experiment its organisers say will revolutionise future road transport on Europe’s busy highways.

More than a dozen self-driving trucks made by six of Europe’s largest manufacturers arrived in the port in so-called “truck platoons” around midday, said the umbrella body representing DAF, Daimler, IVECO, MAN, Scania and Volvo.

“Truck platooning”, similar to concepts with self-driving cars, involves two or three trucks that autonomously drive in convoy and are connected via wireless with the leading truck determining route and speed.

Wednesday’s arrival concludes the first-ever cross-border experiment of its kind with self-driving trucks which left home factories from as far away as Sweden and southern Germany.

“Truck platooning will ensure cleaner and more efficient transport. Self-driving vehicles also contribute to road safety because most accidents are caused by human failure,” said Dutch Minister Melanie Schultz van Haegen.

For instance, because the trucks are connected via wireless they brake at the same time to always maintain the same distances between them, added the Dutch infrastructure and environment ministry.

“The advantage of truck platooning is that you have trucks driving at a consistent speed,” said Jonnaert, saying the concept will greatly aid traffic flow on Europe’s heavily congested roads.

Driverless lorries travelling through Belgium
The lorries travelling through Belgium

The trucks used in Wednesday’s test however are still semi-automated and despite computers allowing them to drive by themselves, human drivers were still required on board.

The proponents of truck platooning say several hurdles still need to be ironed out and road users will not see self-driving trucks just yet.

Difficulties include standardising regulations across the continent to enable self-driving convoys and designing systems that will enable communication between different trucks from different manufacturers, Jonnaert said.

“This is all part of a journey, which we are on as the automotive industry, towards highly-automated vehicles,” said Jonnaert.

The Netherlands, which currently holds the revolving EU presidency, will hold an informal summit mid-April to discuss changes to regulations needed to “make self-driving transport a reality,” Dutch officials said.

How Tesla became the most lusted after car

Showbiz-style rollout and media hysteria, rah-rah reviews and long lines to book the latest Tesla Model 3. You have to wonder what took so long for a country — where it is famously said, “If you don’t look back at your car after you park it, you’ve bought the wrong car!” — to lose its head over a car. Maybe because there wasn’t anything like this before?

America is car heaven. The US has the highest number of motor vehicles in the world (both absolute, and per capita, if you leave out minor principalities like Monaco and Luxembourg). At 809 vehicles per 1,000 people, it’s a surprise toddlers aren’t driving (Tesla may fix that too; it is working on a lithium ion battery-powered toy car for children). Learning to drive and buying the first car (and making out in it, according to some) are rites of passage in American life.Nowhere in the world are cars so sought after, car companies so revered, and car salesmen so reviled.

Into this ritualistic world comes a brash young company that many have compared to Apple -both for the fetish its founders have for a fine finished product, and the hysteria they generate among fanboys (and some girls). Last week, as Tesla‘s South Africa-born founder Elon Musk unveiled the prototype of the company’s new product, Tesla 3 -still at least 18 months away from production — an assembly of whooping Tesla employees, owners, and cheerleaders (some media among them) erupted wildly in scenes reminiscent of the kind of celebration Apple’s Steve Jobs could drum up at product launches.

Like with Apple and Jobs, Tesla and its founder already have a dedicated fan base, albeit much smaller, considering Tesla’s products are as nifty as iPhones and iPads, but only about 200 times as expensive. But with the Tesla 3, a $35,000 base-price sedan that costs almost a third of what the existing line-up of Tesla Roadster, Tesla S, and Tesla X sell for, Musk is reaching for the middle-class Joe who is already ponying up the same price range for mid-sized SUVs and cars.It sounds like an unbelievable deal, even without all the bells and whistles that Tesla puts in its fully loaded car.

Just three things among many had car buffs — particularly environmentally conscious fans — rushing online and to showrooms to book the Model 3, plonking down a $1,000 refundable deposit. Musk’s promise that even the base model would have features common with its $100,000 top-of-line Tesla — an impressive battery range of 215 miles (344km) on a charge, the highest among current major electric vehicles, a capacious interior that can seat five people comfortably, and the great love of many Americans — acceleration and speed: Zero to 60 miles (about 100km) in six seconds. All for a sticker price of $35,000. Additional features could bump it up to $42,000.

Small wonder, some 200,000 people worldwide, including in Delhi, beat a path to Tesla showrooms (or the website) to put $200 million in Elon Musk’s pocket even before the first car has been produced. “Model 3 orders at 180,000 in 24 hours.Selling price w avg option mix prob $42k, so ~$7.5B in a day . Future of electric cars looking bright!” Musk tweeted triumphantly. Two hours later, he tweeted, “Now 232k orders.”

While financial mavens calculated that Tesla could do more than $2 billion in debt equity of fering with just the deposits he will be sitting on for at least two-three years, Musk himself indicated that if production is fully realized, it would generate more than $8 billion in cash flow for Tesla, putting the long-sought but frequently underperforming electric car in the sight of the average buyers spooked by its unreliable reputation, lack of charging options, and “range anxiety.” According to Musk, not only have all those issues been fixed, but the Tesla 3 will sweep every other car off the market.


But carrying through the promises is fraught with big ifs — and risks. Although previous Tesla models have received rave reviews for design and performance, there were inevitable delays even though volumes were low for those cars. Last year, Tesla delivered little more than 50,000 cars all three models combined. The 232,000-plus orders for Tesla 3, which could go up to 5,00,000 before the hysteria subsides, will test Tesla’s assembly lines, all located in the US. Musk maintains that with any new technology, “it takes multiple iterations and it takes economies of scale before you can make it great and affordable.” He thinks Tesla can begin delivering within the 18-month timeline it has promised.

Meanwhile, what of India, now fast taking after the US as automotive heaven despite its dismal infrastructure? In a country where the mantra has long been “kitna deti hai?” (how much mileage does it give?), 346km per charge could seem like mileage heaven. But as the joke goes, how will it work if there is no power? On a more serious note, Tesla’s India problem is poor roads and lack of charging stations. Besides, where in heavens can you accelerate from one to 100km per hour in six seconds?

That hasn’t stopped Indian enthusiasts from joining the worldwide hysteria and singing “tu cheez badi hai musk musk.” Prime Minister Narendra Modi may not have succeeded in persuading Musk to set up a manufacturing facility in India, but given the size of the auto market, Tesla is certainly beating a path to India’s door -with Musk all ready to do his version of Car Seva.

Tesla faces stiff challenges with Model 3

Electric unveiling of Tesla's Model 3

Tesla Chief Executive Elon Musk has come one step closer to realizing his long-held dream of bringing affordable, zero-pollution vehicles to the world’s highways.

After months of secrecy, he unveiled the prototype for his planned $35,000 Model 3 battery electric car Thursday night to hundreds of adoring fans, a generally enthusiastic automotive press and a massive global presales response.

By 10:30 a.m. Friday, Musk said, Tesla had received more than 198,000 deposits of $1,000 each for future deliveries of the sleek and low four-door sedan — an unprecedented response for a car that hadn’t even been shown in photographs when the deposits were made and that won’t be delivered to customers for at least 18 months.

Wall Street liked the new car. Tesla stock traded after-hours at $241, up $12 a share, after closing at $237. But now Musk and his production team face an enormous set of challenges. They must turn the prototype into a working car, find a way to sell it at the stated price point, get their growing auto plant and new battery factory up to full capacity, and bring the Model 3 to market in time to beat the competition.

For the record

April 2, 8:34 a.m.: An earlier version of this story quoted Friday’s closing price for Tesla stock as $241 a share. The stock closed at $237 and rose in after-hours trading. Also, the Tesla Model X was described as seating five. The SUV accommodates seven.


Critics of the Fremont, Calif., electric car company don’t believe any of that can be done. Musk has trouble meeting his own deadlines and building automobiles sufficiently bug-free for a mass market. Musk seemed to realize the monumental task ahead, tweeting Friday: “Definitely going to need to rethink production planning.”

Some doubt he can produce the Model 3 for $35,000 without losing money on every car he sells.

“I don’t believe they can make any money selling this car for much less than $50,000,” said Mark Spiegel, CEO of the hedge fund Stanphyl Capital Management. “Unless something changes, the more Model 3s they sell, the more they will lose.”

Tesla has stated it will produce more expensive versions of the 3 first, filling orders for the most heavily option-laden vehicles before building and delivering the base models. Some early recipients of the $81,200 Model X paid as much as double that price for theirs.

“Tesla has a history of introducing a vehicle with a reasonably low price and then selling versions that are much more expensive,” said Jack Nerad, market analyst at Kelley Blue Book.

But by the time purchases of the Model 3 can actually be made, other inexpensive plug-in battery electrics from more established companies with better production track records — and a better capacity to sell cars with low profit margins — will already be in showrooms. The $37,500 Chevrolet Bolt is expected to be a strong rival. Other plug-in electrics are said to be coming from BMW, Mercedes, Volvo and others.

Musk himself acknowledged the possibility that the car will not be available in time to meet the promised late-2017 delivery date. At the Tesla Design Studio in Hawthorne, Musk promised delivery of the Model 3 by “next year,” then drew indulgent chuckles when he added, “I do feel fairly confident it will be next year.”

Deliveries of Musk’s much-admired Model X, an elegant, high-performance seven-seat SUV, were delayed by more than 18 months after Tesla experienced production problems with the car’s complex falcon-wing doors. The prospect of a delay did nothing to diminish the enthusiasm of the assembled faithful. Eliciting rock star adoration from a crowd of 150 auto journalists and 650 Tesla owners, Musk took the stage Thursday in Hawthorne amid flashing lights and booming techno beats.

“To any of you who bought an S or an X — thank you for paying for this,” Musk told the crowd, saying those more expensive, earlier-generation models helped pave the way for the Model 3.

Many of those present already owned one of those, or both, or more. Jerry Roby of Newport Beach owns a Roadster, an S and an X. Arriving in a branded Tesla cap and windbreaker, Roby had already put down deposits for two Model 3s at the Tesla store near his home.

At a bank of computer screens at the evening event, other would-be 3 drivers were placing orders. The father-and-son team of David and Adam Metcalf of Florida had paused to switch credit cards after one maxed out. The Metcalfs had already placed orders for 12 Model 3s and needed to order five more. Some were for the research facility at the University of Central Florida, where the senior Metcalf works. As for the others? “I have a list,” he said.

In the first 24 hours, Tesla received 180,000 preorders. Estimating that the average transaction price for the vehicle would be about $42,000, Musk estimated his 24-hour haul at $7.5 billion. “Future of electric cars looking bright!” he tweeted. In fact, the company’s take was closer to $180 million — nothing to sneeze at, but only seed money in the capital-intensive auto production business.

Even after the unveiling, little more was known about the car except its stated MSRP, its claimed range of 215 miles per electric charge and its ability to accelerate from zero to 60 mph in less than six seconds.

The Model 3 will be built alongside the Ss and Xs in Tesla’s huge California factory. The company has said it could produce as many as 90,000 vehicles annually this year, and by 2020 could be churning them out at the rate of 500,000 a year — a number Musk said Thursday night he was “confident” Tesla could achieve.

Meeting that production rate will also require Musk to move aggressively forward with his “gigafactory,” the immense northern Nevada facility where, in cooperation with electronics giant Panasonic, Tesla will build the batteries for its vehicles. Musk told his audience that the factory is now officially “operational,” and will begin delivering batteries at the end of next year.

Perhaps Musk’s greatest challenge will lie in selling his chic, environmentally friendly vehicles to a mass audience. As several analysts pointed out, the customer who spends $100,000 or more on a Model S or X probably has two or three other luxury cars in the garage, and is not terribly inconvenienced when glitches require maintenance.

Tesla has had trouble with reliability. Though the Model S won almost every accolade and award in the motoring press, and received the highest possible safety and performance ratings, Consumer Reports later added the 2012-2013 and 2015 Model S to its “worst of the worst” section of “Used Cars to Avoid.”

The customer spending $35,000 on a Model 3 probably won’t embrace a car that isn’t close to trouble-free. That heightens the pressure on Tesla, said award-winning car designer Henrik Fisker, whose futuristic Karma held promise as a stylish electric performance car before financial troubles sidelined the firm.

“Tesla’s advantage is that, being a new car company with a new brand, they have a cool factor the established carmakers don’t have,” Fisker said. But “once you start moving down market, the customer’s lifestyle is very different. Someone who buys a $35,000 car, this is his only or his primary car. People are still reluctant to have their only car be an electric car.”