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Tesla Promises Upgrade for Customers Who Bought Self-Driving on Older Cars
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Good morning. Today, Elon Musk makes a new pledge to drivers.
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Tom LoSavio is the lead plaintiff in a class-action lawsuit against Tesla. Jason Henry for WSJ
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Elon Musk has sold Teslas to millions of people in two powerful ways: He put them on the road, proving that EVs could be practical and even impressive, and he made big promises. One of those techniques is now becoming a problem, the Journal's Becky Peterson writes.
The Tesla CEO this week suggested that the company will need to set up “micro factories” in major metro areas to update older Teslas with new computers and cameras so they can run its latest self-driving tech.
Musk would like to defuse a growing reputation problem of his own creation. For years, he not only promised that the Teslas rolling off the assembly line would soon offer “full self-driving” capabilities, but he charged drivers for it.
Tom LoSavio, a retired lawyer in California, says he paid $100,000 for his car in 2019, including an $8,000 upgrade for lifetime access to FSD. The company has since determined that cars running what it calls Hardware 3, like LoSavio’s, will never be fully autonomous. LoSavio is now the lead plaintiff in a class-action lawsuit seeking a refund plus damages for false advertising.
At this point, many irate drivers are probably unlikely to be satisfied by Musk’s pledge to build new factories to update their cars. Hardware 3 is not just a form of technical debt; it’s marketing and reputational debt.
Here’s one sample of the skeptical reaction, courtesy of Electrek:
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In a quarter where Tesla just announced that it’s running thin on profitability, with net income that has been falling for years and buoyed in this quarter by some questionable one-time benefits, investors may question if Tesla will be able to remain profitable while building urban factories just to upgrade older vehicles that it was unable to keep its technological promises for.
There is a question over whether this is even a viable plan, or whether it’s just being used as yet another stalling tactic to string along HW3 owners.
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It’s possible that fully autonomous Teslas will eventually become the norm, overshadowing years of unfulfilled promises for early adopters.
Chief Financial Officer Vaibhav Taneja said on this week’s earnings call that the company has changed its car sales strategy to “emphasize FSD as the product, and the vehicle as only the delivery mechanism.”
But there are always more promises to be made, especially for someone with Musk’s ambitions.
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Content from our sponsor: Deloitte
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Is the Auto Industry Ready to Manage a Spike in EV Lease Returns?
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With a large pipeline of off-lease electric vehicles arriving on the secondary market, OEMs, captives, and dealer networks can rethink customer retention, remarketing channels, and value perception. Read More
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The government is investigating how sports leagues’ move into streaming-TV deals is affecting fans and the broadcast business. Thearon W. Henderson/Getty Images
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The government’s probe into televised sports continues.
Justice Department officials met with broadcast TV station operators during an industry conference in Las Vegas this week as part of its antitrust investigation into the sports-media marketplace, Joe Flint and Dana Mattioli report for the Journal.
Both the Justice Department and the Federal Communications Commission are investigating how sports leagues are moving more games to streaming services and the impact on consumers and broadcast TV.
It’s not clear where all this is headed. The government could seek some kind of limits on streaming exclusivity deals that this week, for example, require Amazon Prime subscriptions to watch some NBA playoff games.
But much of the government attention has focused on rights deals for the NFL, the most popular programming on TV. The NFL last week met with senior FCC officials to justify its media-rights strategy.
More TV: Charter Communications reported lower first-quarter revenue as it lost subscribers in both its internet and video businesses. [WSJ]
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“‘Microsoft Gaming’ describes our structure but it does not describe our ambition. So, we are going back to where we started and changing our team’s name.”
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— Microsoft gaming chief Asha Sharma telling employees that their division’s name is going back to Xbox. The company had called the unit Microsoft Gaming since 2022, when it announced its deal to buy Activision Blizzard.
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8,000
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Approximate number of employees that Meta will lay off next month,
10% of its staff, to operate more efficiently and pay for its massive investments in AI. ‘This is not an easy tradeoff,’ Chief People Officer Janelle Gale said in a memo.
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Lauren Sánchez Bezos and Jeff Bezos at the Dior couture fashion show in January. Getty Images
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The Bezos Earth Fund awarded $34 million in grants to institutions studying and developing materials that might someday replace polyester and cotton. [WSJ]
Former Disney CEO Bob Iger has taken an advisory role at Thrive Capital, a venture firm founded by Joshua Kushner that has backed the likes of Instagram, Spotify, A24 and OpenAI. [WSJ]
Restaurant chains including IHOP, Cracker Barrel and Red Lobster are carving out new revenue from catering to office-workers’ gatherings and other events, but any problems with quality control reflect on the entire brand. [NYT]
Brands that enlist armies of social-media clippers need to make sure everyone remembers the FTC’s ad-disclosure rules. [BI]
TikTok moved to bolster its reputation with advertisers by expanding partnerships with Integral Ad Science and Zefr for measurement and brand safety tools. [MarketingDive]
Guerlain is using paid influencers for the first time in a bid to turn its viral $660 perfume Vanille Planifolia into more than a moment. [Glossy]
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