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Comment by chollida1 | Hacker News Reader

This is about defrauding people who bought a tesla, not investors.

> In 2020, Musk told a crowd in Shanghai that he remains “confident” that Tesla will achieve “basic functionality for level five autonomy this year,” referring to the SAE’s rankings of autonomy. Tesla’s technology, in 2024, is still at level 2.

This reminds me alot of the Thernos case where she tried to make the case not about fraud but about an overly optimistic CEO promising something and being wrong about that. here Musk has clearly said that full self driving would be available many years ago.

So I guess we're trying to figure out how much lying is ok by a CEO before it becomes fraud to the buyer.

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I purchased FSD in 2019 on the promise of self driving. 5 years later and still no self driving. There was also the promise of the car being able to self park. I would be happy if I got my money back for a feature that was never delivered.

same. at least we got in before the price jumped? We don't even have a hope as the new MCU doesn't even support getting backported to our car even if we were willing to pay for it.

Pretty sure it cost me more than the $2500 I paid. I tried smart summon one day. Instead of backing out of the space, it just ran forward up the curb on to the sidewalk. Couple years later the left strut failed costing me $2k.

RIP. I haven't had any issues like that yet; but I've also barely used it out of that exact fear.

As my grandfather used to put it, you paid some "tuition of life" for a lesson you'll (hopefully) not soon forget.

Yeah but also it’s good to punish lying companies. It increases trust in the market.

I couldn't imagine paying $12,000 for technology that didn't exist, from someone who repeatedly lied about that technology existing.

People generally trust the US consumer products market. And that's a good thing.

If people had to research the CEO of Old Navy before they bought a pair of pants from oldnavy.com, it would be pretty bad for our economy.

And there are markets like this where trust is low, and they don't function well.

The difference is that Old Navy isn't selling anything they don't already have ready to go.

Lamborghini and Ferrari take orders, but they tell you what the average wait time is, and you don't have to pay a 100% deposit beforehand.

If old navy CEO asked me to pay $5000 up front for jeans that can't wear out and that wash themselves, and had been saying that it'll be here next year for five years, I'd be pretty skeptical too. I also would encourage refunds or investigation when I buy it and the features are never delivered.

That is true for those who paid in recent 2-3 years. You can't say that for those who paid 3+ years ago.

As the article explains, wire fraud is about defrauding consumers, and securities fraud is about deceiving investors. Tesla is under investigation for both.

Wire fraud is nowadays just a catch-all for "crime involving money". Regardless of all other specifics of the case, it is a certainty that at some point someone sent a text message or used a computer, so that's what the feds will go after.

Ran a scammy crypto exchange out of the Bahamas? Took money from investors for a failed blood testing company? Raised money for a political campaign but spent it on hookers? Paid a hitman to kill your spouse? All wire fraud.

And pretty much everything a public company does is securities fraud: [1]

To oversimplify, a company is required to disclose risks, and everything is a risk, so it's security fraud if it's not in the disclosure, or if it's misrepresented in the disclosure.

1: https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...

Not just a computer but just using the phone is also a wire fraud trigger too. It is basically any fraud these days though given how much communication happens through some 'wire'.

Yup. It's a straightforward consequence of how society has evolved over time. "Wire fraud" specifically means using electronic communication channels to defraud something. Since most business is conducted over electronic communication channels nowadays, it all falls into that category.

IANAL, but I doubt that there's any great alternative that doesn't involve rewriting 100 years' worth of legislation and case law, which generally distinguishes categories of fraud by the medium over which they occur.

> This reminds me alot of the Thernos case where she tried to make the case not about fraud but about an overly optimistic CEO promising something and being wrong about that.

Right, and that fell apart with, well, many things, but the one that stands out to me - upcoming FDA inspection, and Holmes (in something out of a cartoon) literally had someone put a filing cabinet in front of the door to the lab where they were doing actual work to hide it, and direct inspectors to a faked up lab, i.e. outright fraud and deception.

She wasn't convicted of... whatever that was (extremely low-effort obstruction of justice?), though, she was convicted of defrauding her investors. Notably, she got off on the charges of defrauding her customers, for, truly, it is easier for a camel to fit through the eye of a needle than for a rich person to get in trouble for injuring the general public.

We're actually seeing how much people can read into words too much. There was zero promise by Musk just some guesses and when you buy the car itself it has all sorts of lack of promises.

No, this should be about defrauding people who bought FSD for their Tesla. Most Tesla owners do not care about FSD, according to the estimates of subscription rates.

Plenty of people bought Teslas anticipating that they'd buy FSD when it fully worked "next year".

>No, this should be about defrauding people who bought FSD for their Tesla.

Yes, it sounds like you and I are in complete agreement:)

If we started prosecuting CEOs who don't meet goals/expectations, they'd all be in prison. You have to prove Elon was intentionally lying, which I suspect many on this forum are sympathetic to that view, but in a fair court system that is a difficult standard. You'd have to have emails or some other hard evidence where he acknowledges he knows he's being untruthful. Short of that kind of evidence coming out, they are most likely going after him for political reasons.

There is an obvious difference between lying and being wrong.

Theranos claimed to already have created their magic machine, which was a blatant lie. They intentionally misled investors by pretending to put samples into a fake testing machine, secretly removing the samples to test them in a lab elsewhere, then putting them back into the machine to make it look like the machine was doing the testing. That's careful, calculated fraud, which was obviously a criminal act.

Musk, by contrast, never claimed to have something that he did not have. He made overly-optimistic claims about product development. There is no reason to assume that these projections were lies, given that everyone else in the space was making similarly aggressive projections.

Musk was wrong for selling FSD-related features before they were ready, and Tesla should obviously make that right. But pretending that being wrong (in good company) is the same thing as calculated fraud is just goofy.

That's the question: is there any calculated fraud here or was he just vastly overly optimistic?

... but even if there is no calculated fraud, I think some Tesla buyers are owed refunds or other compensation. If a company promises me X, I pay for it, and years later has not delivered X, eventually I need a refund.

I agree.

After 7 years or whatever you can’t keep being “overly optimistic”. At some point it becomes clear it’s just not ready and you need to give people their money back and stop selling it until it is.

If all FSD things were sold with a “really will be in 2 years or 80% of your money back” clause that would be different in my mind.

But taking money and just never delivering is flat out fraud. No matter how many times you say “just one more year”.

> Musk, by contrast, never claimed to have something that he did not have.

IIRC, wasn't the video that claimed to demonstrate a full trip conducted by FSD actually like 100 different splices? That right there would be a claim of something that didn't exist.

It's about revenue recognition. TSLA has beaten estimates multiple times based on revenue recognized from FSD "Beta". There's your fraud.

> Theranos claimed to already have created their magic machine, which was a blatant lie.

And to this day, you can go on Tesla's website, configure a car, and be offered the option to purchase "Full Self Driving Capability" which does not offer a fully self driving vehicle.

By this reasoning it would be OK for a car company to market a car with an automatic transmission, yet the clutch was still required to be used on gear changes at delivery. You paid a large premium for the automatic clutch as was marketed by the CEO of the company to be delivered "next year". This claim you bought into was now made over 8 years ago and what the CEO stated has still not been delivered. Your car now has over 120k miles on it with a feature that is only half delivered.

You wouldn't consider this a fraudulent claim?

This doesn't seem fraudulent, FSD was an additional optional feature you didn't have to buy not a required featured. Then when you bought it there was plenty of disclaimer about how there is no timeline for release. So your claiming that because the CEO said something at random speech - that was technically correct anyways, that apparently that overrides all of the disclaimers you have to sign when actually buying the car?

You also had the option to not buy automatic transmissions for a lot of time automobiles have been sold. The example is relevant.

I think you're misunderstanding that Elon has not made this statement just once. He's literally said it every year multiple times per year and he still has not delivered. At this point it truly is fraudulent.

Shouldn't fraud (for the end user/customer) be determined by claims made about the product at the time of sale, and not promises of what might be possible a few years from now?

If you want to say promises of future features is fraud, then surely that would only be in relation to investors?

"It's almost ready" is a claim about the product at the time of sale.

"Almost ready" as a claim is pretty meaningless. It's a statement of feature status, not a prediction of when 100% completion occurs. In software, "almost" can last years or decades.

He's been frequently far more specific than that on timelines.

2018: "By next year, a Tesla should be able to drive around a parking lot, find an empty spot, read signs to confirm it’s valid & park." https://twitter.com/elonmusk/status/1057690425710891009

2016: "In ~2 years, summon should work anywhere connected by land & not blocked by borders, eg you're in LA and the car is in NY." https://twitter.com/elonmusk/status/686279251293777920

It won't be hard to demonstrate some purchasers factored these claims into their decisions.

"a Tesla", not "all Teslas". And of course "should" not "will". And so on. If his press releases are to be treated like contracts that he can be held to, then the verbiage needs to be parsed as if his words were contracts.

That's just not going to go very well for the people litigating that he made false claims. Which gives the impression that the litigation isn't so much about punishing the wrongs he has committed, as they are about punishing the person that no one likes.

Maybe there are other tweets that are better examples of your argument, I'll wait to see if they come up in any of the umpteen fluff articles we'll see over the next few months. In the meantime though, this seems more than a little unfounded.

> "a Tesla", not "all Teslas"

Cool. Is there a single Tesla currently capable of it eight years on?

> If his press releases are to be treated like contracts that he can be held to, then the verbiage needs to be parsed as if his words were contracts.

Contracts aren't the only way to make a fraudulent marketing promise. You can be sued for false advertising, for example.

> If his press releases are to be treated like contracts that he can be held to

Are you familiar with Carbolic Smoke Ball?

Musk has been citing more precise estimates (e.g. "end of the year") for years.

In 2019 Musk claimed there would "for sure" be over a million Tesla robotaxis on the road by the end of 2020:

https://www.thedrive.com/news/38129/elon-musk-promised-1-mil...

That was a lie.

Thanks - I'll add that one to my timeline: https://webtorque.org/fsd-timeline.html

In 2019:“ I think we will be feature-complete full self-driving this year, meaning the car will be able to find you in a parking lot, pick you up, take you all the way to your destination without an intervention — this year. I would say that I am certain of that. That is not a question mark." [1].

[1] https://www.businessinsider.com/elon-musk-doubles-down-on-cl...

When you are charging people extra for the features you're promising will exist in the future, it seems reasonable to call that fraud if you never deliver.

Of course not, a huge number of (if not most) contracts contain agreements regarding future delivery of product or services. This is valid and normal arrangement. The contract is a promise to deliver that. If you don't deliver, you have breeched the contract.

Elon Musk signed contracts claiming he would deliver this in the future? There are verbal contracts, so what you're really saying was that he was in the room with each buyer, individually or with a group of them (such that he was aware of the identities of those he was contracting with), and made a legally binding verbal contract where he told them he would deliver these software features, under what conditions they would be delivered (time, location, other details), and then shook their hands?

Stretching contracts in the way you'd do it wouldn't be good for anyone.

> Elon Musk signed contracts claiming he would deliver this in the future?

False statements were made that induced consumers to sign contracts to purchase cars and the FSD add-on. This is fraud.

Musk doesn't have to personally sign your car's contract for that to be a thing, or your credit card APR would be unenforcable.

I'm making a bit of a comparison, since the above was a pretty general statement. Yes, literally, marketing is generally not regarded as contract offers... but the rationale for laws prohibiting false advertising is that the product delivered should be the product promised. Technically the difference between whether something would be breach of contract or false advertising or fraud is a very fine line dependent on the specifics.

My point was just to say that "future promises" are not something that can just be disregarded.

The definition of fraud is going to vary slightly from jurisdiction to jurisdiction, but generally the core elements are:

* Falsity: did the person knowingly make a false statement?

* Materiality: was the false statement something that could reasonably influence someone's decision to agree to a contract?

* Reliance: did the other party actually use the false statement to decide to agree to the contract?

Claims of future capabilities are necessarily going to be evaluated differently from claims of current capabilities, since it's going to be harder to demonstrate all of these points. But for Tesla's FSD promises, we're at 7-ish years now of "coming soon" promises, with marketing materials outright saying it's only regulatory reasons that a driver is needed. Materiality and reliance are slam-dunks at this point; the only out Tesla really has at this point is falsity. Essentially, Tesla has to argue that its engineers were all high on their own hype (which I have to admit it as at least plausible).

In 2016 Tesla claimed that "as of today, all Tesla vehicles produced in our factory – including Model 3 – will have the hardware needed for full self-driving capability at a safety level substantially greater than that of a human driver":

https://www.tesla.com/blog/all-tesla-cars-being-produced-now...

That was a lie.

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