Tesla is investigating after one of its vehicles appeared to explode in China. The news comes as Tesla CEO Elon Musk appears poised to transform the company’s electric cars into driverless vehicles in a risky bid to realize a bold vision that he has been floating for years.
The technology required to make that quantum leap is scheduled to be shown off to Tesla investors Monday at the company’s Palo Alto, California, headquarters.
Elon Musk
Musk, known for his swagger as well as his smarts, is so certain that Tesla will win the race toward full autonomy that he indicated in an interview earlier this month that his company’s cars should be able to navigate congested highways and city streets without a human behind the wheel by no later than next year.
“I could be wrong, but it appears to be the case that Tesla is vastly ahead of everyone,” Musk told Lex Fridman, a Massachusetts Institute of Technology research scientist specializing in autonomous vehicles.
But experts say they’re skeptical whether Tesla’s technology has advanced anywhere close to the point where its cars will be capable of being driven solely by a robot, without a human in position to take control if something goes awry.
“It’s all hype,” said Steven E. Shladover, a retired research engineer at the University of California, Berkeley who has been involved in efforts to create autonomous driving for 45 years. “The technology does not exist to do what he is claiming. He doesn’t have it and neither does anybody else.”
More than 60 companies in the U.S. alone are developing autonomous vehicles. Some of them are aiming to have their fully autonomous cars begin carrying passengers in small geographic areas as early as this year. Many experts don’t believe they’ll be in widespread use for a decade or more.
The China incident
A short video of surveillance footage posted on Chinese social media site Weibo showed white smoke emerging from what looks like a white Tesla car parked at a lot in Shanghai. After a few seconds, the electric vehicle bursts into flames and the clip ends soon afterward.
The video, which was filmed just after 8.15 p.m. local time on April 21, appears to show a Tesla Model S sedan. It was posted on Chinese social media a couple of hours later and has since been shared widely.
Tesla would not confirm any of the details, other than to say it is investigating the incident alongside Chinese authorities.
“We immediately sent a team on-site and we’re supporting local authorities to establish the facts. From what we know now, no one was harmed,” a Tesla spokesperson told CNN Business on Monday.
The clip attracted a mix of derision and outrage on Weibo. “Us car owners demand an explanation,” wrote user Miao Hongyang. “Jeopardizing our safety in a moment’s instant and the fact it ignited so quickly is something we will not tolerate.”
Another Weibo user registered under the name Your Dad, added: “One thing I’ve learned from this incident: from now on, don’t ever park next to a Tesla.”
China is huge for Tesla
This isn’t the first time one of Tesla’s cars has appeared to burst into flames, but previous incidents often involved moving vehicles or vehicles that had crashed.
“It seems strange that the battery, not charging, would combust on its own,” said Tu Le, founder of consultant firm Sino Auto Insights.
Tesla has previously said that gasoline-powered cars are 10 times more likely to catch fire than those powered by electric batteries.
China is a hugely important market for Tesla. The country accounts for about 20% of the company’s annual revenues, or more than $2 billion in sales. But its share of this market is still tiny.
The company wants to supercharge sales in China with a new factory in Shanghai. Tesla eventually hopes to produce 500,000 cars at the facility every year.
But Tesla is also grappling with a slowdown in the Chinese economy, which has already hit foreign brands including GM and Ford. Import tariffs resulting from the trade war with the United States have seen Tesla prices in China fluctuate wildly.
It also has to contend with heavy competition from Chinese players, such as BYD and NIO.
Tesla board shakeup; SEC dispute continues
In other news, Tesla revealed Friday that four directors will leave the company — shrinking the size of its board to seven.
The car maker said that it wants to “streamline” corporate oversight because its board has grown by four members over the past five years. That has led to “the duplication of certain areas of experience or expertise” among its directors, the company said in a filing. Now Tesla is shaking things up to allow the board to “operate more nimbly and efficiently.”
Two directors have agreed not to stand for reelection at Tesla’s annual meeting this year, and two more will leave in 2020 or 2021.
“Such agreements did not result from any disagreement between Tesla and any of such directors,” the company said.
Duke Energy $76M plan would charge up support for fast-growing electric vehicle market
Cautious Tesla investors have also been pleading for with the company to tighten oversight of Musk. The disclosure comes just four months after Tesla added two new board members as part of a settlement deal that Musk and Tesla reached with the federal Securities and Exchange Commission. The agency wanted Tesla to put stricter checks on Musk’s power after accusing him of misleading investors with his tweets about taking Tesla private. But their dispute is far from over: The SEC has since accused Musk of flouting other settlement terms and is looking to hold him in contempt.
On THursday, Lawyers for Musk and U.S. securities regulators are getting another week to negotiate a deal to keep Musk from being found in contempt of court.
Both sides say in a letter filed with a federal court in New York that they talked for over an hour this week and are continuing to discuss an agreement. District Judge Alison Nathan granted the request to talk until April 25.
Lawyers for the Securities and Exchange Commission asked the court to find Musk in contempt for violating a settlement order that requires Musk’s tweets to be approved by a lawyer if they disclose important company facts.
Nathan had ordered both sides to meet and work out differences by Thursday.
The settlement was reached last year after Musk tweeted he had secured funding to take Tesla private even though he had not. The SEC says Musk violated that agreement when he tweeted about vehicle production without approval in February.
Nathan had ordered both sides to meet for at least an hour to work out their differences and if they couldn’t, she would rule on whether to hold Musk in contempt.
The settlement was reached last October after Musk tweeted that he had secured funding to take Tesla private when in fact he had not. The tweet sent Tesla’s stock on a wild ride and the SEC says it harmed investors who bought shares after the tweet but before they had accurate information.
NCSU builds smaller, more efficient electric car charger – and a faster one is on the way
The SEC says Musk violated the agreement when he tweeted about vehicle production in February without approval.
The 13-word tweet said Tesla would produce around 500,000 vehicles this year. But it wasn’t approved by Tesla’s “disclosure counsel,” and the SEC said Musk had not sought a lawyer’s approval for a single tweet.
Tesla’s Friday filings say the outgoing board members include Linda Johnson Rice, the chairman and CEO of Johnson Publishing, who joined the board in 2017. The others — Brad Buss, Antonio Gracias and Steve Jurvetson — have been with the company over nine years.
Jurvetson is considered a close ally to Musk. The venture capitalist was one of Tesla’s earliest investors, and he’s a director at Musk’s rocket company, SpaceX.
Jurvetson, who is scheduled to depart in 2020, returned to his role at Tesla this month after taking a year-long leave of absence that he began amid reports of inappropriate workplace behavior and harassment. Jurvetson has denied the allegations.
A new filing states that the Tesla board is confident that with three remaining independent members, it is “poised to lead Tesla with fresh perspectives balanced by deep historical knowledge of our company, while maintaining a wealth of diverse experience and expertise.”
Musk unveils Tesla’s SUV with price range of $39,000 to $60,000
Critics have said that some of Tesla’s “independent board members” aren’t so independent. Oracle’s Larry Ellison, for example, reportedly had close ties to Musk before joining the board. He was one of the members that Tesla brought on to comply with the SEC settlement.
Other independent directors include 21st Century Fox’s James Murdoch and Kathleen Wilson-Thompson, head of global human resources at Walgreens. Wilson-Thompson was the other independent director elected after the SEC settlement.
Kimbal Musk, Elon’s brother, also has a seat on the board.
If shareholders approve a plan to restructure the remaining board seats, director terms will be reduced to two years instead of three.
