Under pressure, Tesla updates its 'Goodwill Agreement'

June 13, 2016

On Friday, the auto world once again turned its attention to Tesla Motors and its outspoken CEO, Elon Musk. This time, however, we weren't waiting for an unveiling or news of a new battery, but watching a confrontation between Tesla and an unspecified number of Model S owners, with the National Highway Traffic Safety Administration caught in the middle.

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Now, it appears that tensions have scaled back, as Musk apologized for one misstatement and Tesla agreed to re-word a controversial agreement with owners.


There are a few issues at play here, and each is playing out differently:

1. Complaints about the suspension on the Model S: NHTSA has received several dozen reports of problems with the suspension system on the Tesla Model S. However, as we noted on Friday, many of the complaints filed with NHTSA appear to be from the same anonymous individual, who's using information gathered from other vehicles found on auto salvage websites. NHTSA has looked into the matter, though it hasn't launched a formal investigation. Tesla has cooperated with the unofficial probe, and NHTSA says that, "To date, NHTSA has not identified any safety issue with Tesla’s suspensions."

2. A misstatement about one Model S in particular: In its blog post from last Thursday, Tesla admits that one Model S did, in fact, suffer from suspension problems. However, the automaker claims that the situation was highly unusual:

"With respect to the car that is discussed in the blog post that led to yesterday’s news...the suspension ball joint experienced very abnormal rust. We haven’t seen this on any other car, suggesting a very unusual use case. The car had over 70,000 miles on it and its owner lives down such a long dirt road that it required two tow trucks to retrieve the car. (One to get the car to the highway and one to get it from the highway to the service center.) When we got the car, it was caked in dirt."

However, the owner of the Model S said that the car had only been driven on dirt roads once or twice. Speaking to the Wall Street Journal, Musk later admitted that the blog post was incorrect, and that the owner didn't live on a dirt road, though as of this morning, Tesla's post hasn't been corrected to reflect the misstatement.  

3. A reporter who may or may not have an axe to grind: In that same blog post, Tesla blames one journalist in particular for stirring up concerns about the Model S' suspension: Edward Niedermeyer. Admittedly, Niedermeyer and Musk share no love, but it doesn't seem to us as if the reporter has been deceitful in his reporting on the matter. 

4. A vaguely worded "Goodwill Agreement": Tesla admitted that it sometimes asks owners to sign a "Goodwill Agreement"--most often when the company provides repairs or other services as a gesture of goodwill, after a car is out of warranty. As Tesla's blog post explains, "The basic point [of the agreement] is to ensure that Tesla doesn’t do a good deed, only to have that used against us in court for further gain. These situations are very rare, but have sometimes occurred in the past...."

While that might seem fair and sensible, the language of the agreement was vague enough that some owners construed it to mean that they were prohibited from reporting problems to NHTSA. Naturally, NHTSA looked into the matter, and after expressing concerns about the "troublesome" agreement, the agency says that Tesla has modified the language to clarify that Tesla owners are free to file complaints with the agency.

Though NHTSA hasn't yet identified any problems with the suspension on the Model S, the agency continues to look into the matter. Whether its findings will have any effect on the anonymous complaints already on file or Niedermeyer's assault seems doubtful.

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