Tesla responds to Niedermeyer's safety issue accusations

Earlier today, we reported about Edward Niedermeyer's article accusing Tesla of obstructing The U.S. National Highway Traffic Safety Administration (NHTSA) from investigating a suspension issue by making a 2013 Model S owner, Pete Cordaro, sign a non-disclosure agreement. As we concluded in our previous article, Niedermeyer's accusations were full of loop holes and unrelated coincidences that did not add up to his story. Edward claims to be an auto-industry analyst, he is a contributor to Bloomberg's View and the co-founder of Daily Kanban where he previously wrote a 2008 blog titled "Tesla Death Watch," counting the days until Tesla’s death.

His article was unfortunately blown out of proportions and picked up by national and international news outlets, leading some to report that Tesla's shares had their "biggest drop of 2.6 percent to $229.36 since May 9." Even though NHTSA was looking into this particular case of ball joints failure on the Model S in question, it did not claim to have opened an investigation since this was a one off case and other Model S owners have not reported this issue to NHTSA before.

That's why Tesla and Elon Musk felt the need - as we have hoped - to respond back at Niedermeyer and clear up the story before it goes out of hand. And surely they have tackled all the points Edward was claiming in this article, clarifying that "its owner lives down such a long dirt road that it required two tow trucks to retrieve the car. When we got the car, it was caked in dirt,"  and even explaining why Tesla sometimes has to resort to signing a non-disclosure agreement when offering to repair a vehicle's out of warranty damage. Before reading Tesla's response, we invite you to check out the short version of the story in our previous article, or head on to Daily Kanban's page for the full version riddled with puzzling information.

Here is Tesla's response to Daily Kanban's article titled "A Grain of Salt".

A few things need to be cleared up about the supposed safety of Model S suspensions: 

First, there is no safety defect with the suspensions in either the Model S or Model X. Since we own all of our service centers, we are aware of every incident that happens with our customer cars and we are aware of every part that gets replaced. Whenever there is even a potential issue with one of those parts, we investigate fully. This, combined with extensive durability testing, gives us high confidence in our suspensions. With respect to the car that is discussed in the blog post that led to yesterday’s news (more on the blog post below), 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. 

Second, NHTSA has not opened any investigation nor has it even started a “preliminary evaluation,” which is the lowest form of formal investigatory work that it does. On April 20th, as part of what it has told us it considers “routine screening,” NHTSA informally asked us to provide information about our suspensions. On April 30th, we provided all relevant information to NHTSA. NHTSA has since told us that we have cooperated fully and that no further information is needed. Neither before nor after this information was provided has NHTSA identified any safety issue with Tesla’s suspensions. This can be confirmed with NHTSA. 

Third, Tesla has never and would never ask a customer to sign a document to prevent them from talking to NHTSA or any other government agency. That is preposterous. 

When our customers tell us something went wrong with their car, we often cover it even if we find that the problem was not caused by the car and that we therefore have no obligations under the warranty. In these situations, we discount or conduct the repair for free, because we believe in putting our customers’ happiness ahead of our own bottom line. When this happens, we sometimes ask our customers to sign a “Goodwill Agreement.” The basic point 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. We will take a look at this situation and will work with NHTSA to see if we can handle it differently, but one thing is clear: this agreement never even comes close to mentioning NHTSA or the government and it has nothing to do with trying to stop someone from communicating with NHTSA or the government about our cars. We have absolutely no desire to do something like that. It is deeply ironic that the only customer who apparently believes that this document prevents him from talking to NHTSA is also the same one who talked to NHTSA. If our agreement was meant to prevent that, it obviously wasn’t very good. 

Fourth, Tesla’s own actions demonstrate just how rigorous we are about bringing issues to NHTSA’s attention. Not only do we regularly meet with NHTSA, we have also shown that we won’t hesitate to conduct proactive and voluntary recalls even when there is only a slight risk of a safety issue. Most recently, Tesla recalled third row seats in the Model X even though not a single problem had been reported by any customer. Before that, Tesla recalled a front seat belt pretensioner, even though not a single injury had occurred. In both of these situations and others before them, Tesla took these actions before anyone reported a concern to NHTSA. We did them on our own, because it was the right thing to do. 

There is no car company in the world that cares more about safety than Tesla and our track record reflects that. The Model S is 5-star safety rated in every category and sub-category and Model X is expected to receive the same rating as soon as the government finishes testing. Recently, a Model S was in a very high speed accident in Germany that caused it to fly 82 feet through the air, an event that would likely be fatal in vehicles not designed to the level of safety of a Tesla. All five occupants were able to exit the vehicle under their own power and had no life-threatening injuries. 

Finally, it is worth noting that the blogger who fabricated this issue, which then caused negative and incorrect news to be written about Tesla by reputable institutions, is Edward Niedermayer. This is the same gentle soul who previously wrote a blog titled “Tesla Death Watch,” which starting on May 19, 2008 was counting the days until Tesla’s death. It has now been 2,944 days. We just checked our pulse and, much to his chagrin, appear to be alive. It is probably wise to take Mr. Niedermayer’s words with at least a small grain of salt. 

We don’t know if Mr. Niedermayer’s motivation is simply to set a world record for axe-grinding or whether he or his associates have something financial to gain by negatively affecting Tesla’s stock price, but it is important to highlight that there are several billion dollars in short sale bets against Tesla. This means that there is a strong financial incentive to greatly amplify minor issues and to create false issues from whole cloth.
That said, sometimes Tesla does make genuine mistakes. We are not and have never claimed to be perfect. However, we strongly believe in trying to do the right thing and, when we fall short, taking immediate corrective action.

Featured image: Tesla Motors Club.