Hacker News Reader

Comment by mgrpowers | Hacker News Reader

Go on...

"The cost of the worldwide recall will be "immaterial," the company said. The problem was discovered after a single report to the company in early November of a seatbelt assembly breaking."

"A Tesla spokesman said Friday there have been no accidents or injuries related to the problem. Tesla officials emailed owners of the battery powered luxury sedan asking them to bring their cars to one of about 125 Tesla service centers worldwide for an inspection."

"Tesla may send service technicians to customers if necessary, a spokesman said. The company sells and services its cars with its own personnel and stores. Other automakers get recall repairs done through networks of dealers."

So, they start by mentioning it's an immaterial cost, which eases investor concerns. Then say that they're taking action after a single customer anecdote, which shows driver safety is paramount. Then mention that their have been no injuries/accidents furthering the safety-first narrative. Then they state the number of service centers worldwide to which a customer can go to have the issue addressed. And finally a nice jab at traditional automakers, saying that Tesla will address the issue with its own personnel whereas it would traditionally be outsourced.

So, yeah, I think it's fair to call it a marketing ploy. And I don't mean to sound super critical or cynical. I don't have any problem with it at all, it just is what it is.

To be fair I think the outsourcing of servicing was a comment from the report not from Tesla. It seem more to me that the recall and the process is more likely for safety reason which makes business sense and at the same time they are highlighting how they are doing a good job and milking it for all the marketing it can give them. I don't see anything wrong with that though as long as they are doing the necessary first.

I think most people think of "ploy" like "plan" or "strategy", which implies the thing the marketing is referring to is marketing. That is, a price change, or new feature is rolled out specifically because of marketing. This is more a reaction and less a plan, and as such calling it a ploy carries some implication that they planned the whole thing. Whether that's a valid assumption or not from the meaning of the words, it's obvious that's how some people are interpreting it. That was definitely my interpretation.

OK, so which part is the ploy?

Did they just make up (or perhaps fake) the incident where the seat belt came detached? That seems extremely far-fetched.

Everything else looks like a perfectly reasonable response to this incident.

Certainly, they're spinning this to be as positive as possible, but reacting well and putting a positive spin on something is really far from a "ploy."

I guess I don't hold a super negative connotation of the word ploy. I didn't intend to condemn their actions as unsavory. But if ploy is defined as "a cunning plan or action designed to turn a situation to one's own advantage", then I think it's a fair word to use. It's just "reacting well and putting a positive spin on something" worded differently.

>"a cunning plan or action designed to turn a situation to one's own advantage"

Sounds like the plan is to everyone's advantage?

* Owners get a prompt fix for a newly discovered safety issue (2 weeks ago), and clear reproduction steps.

* Tesla looks proactive, obviously.

* They're not taking the drastic (but expensive) option of replacing all seat belts, which makes investors happier.

* I think they're asking nearby owners to drive in, to prevent jamming their shipping infrastructure.

I think any sort of safety-related recall is going to be a net PR loss for Tesla. Immaterial means the cost is irrelevant, not that it's low. I don't see any evidence that it's anything more nefarious than what they're claiming.

Isn't irrelevant essentially the same as low in this context? And I tried to clarify that I don't think they're doing anything nefarious either. It's just seems like classic Elon spin, that's all.

No. They're not saying "it won't cost much". They're saying "this is a safety-related issue, so we won't even discuss the cost because obviously safety is our first priority, no matter how much it costs."

Yeah you're right, I had a poor definition of immaterial in my head.

The words 'material' and 'immaterial' when referring to business costs are usually financial jargon. I presume they described it as an immaterial cost because the expense is small enough that will not have a noticeable impact on their overall financial situation.

> An item is considered material, according to the American Accounting Association, when the knowledge of it would influence the decision of informed investor.

http://simplestudies.com/what-are-the-exceptions-to-basic-ac...

I agree with others that business reasons makes the most sense. As they mentioned, the costs are immaterial, but it allows them to inspect and determine whether this is a widespread issue and address it before anyone else gets injured and slaps them with a lawsuit.

The cost of a lawsuit would probably be significantly greater than the inspections.

I got curious as to what the cost would be and ran some rough numbers. I think Tesla's labor rate is $125/hour. Figure their cost is half that. At 20 minutes per inspection, that's about $20. Multiply by 90,000 cars and that's about $1.8 million. 2014 revenue was about $3.2 billion and 2015 should be quite a bit higher, so "immaterial" does seem justified given that this involves nearly every car they've ever built.

I daresay a lawsuit would be the least of their worries if there was an actual incident. After Volkswagen and Chrysler, I wouldn't be surprised if the next incident results in jail time.

No company will do a recall if there is no good reason for it. Immediate questions spring to mind: why wasn't this caught prior to rolling out the cars? Was this design done by Tesla or was it an off-the-shelf component from another manufacturer? Is it an integration issue, a material defect or some other kind of problem? How did this pass the various crash tests?

There is no way a company like Tesla would open up their brand to such speculation voluntarily if they could avoid it by designing a better product from the start.

> "I think it's fair to call it a marketing ploy."

Or rather, good business.

Reply on news.ycombinator.com