Tesla Upgrades Anger Existing Owners

Tesla AutoPilot

Two weeks ago Tesla announced that “every single Model S now rolling out of the factory includes a forward radar, 12 long-range ultrasonic sensors positioned to sense 16 feet around the car in every direction at all speeds, a forward-looking camera and a high-precision, digitally controlled electric assist braking system.” Tesla also introduced an all-wheel drive version of the Mode S which features two motors, one in the front and one in the rear, and up to 691 horsepower.

While most Tesla fans are estaic about this news, the San Jose Mercury News reports both announcements have angered some recent Model S buyers who claim they were told by Tesla representatives that the new features would not be available any time soon – if ever. They say they would not have bought their cars if they knew these upgrades were in the works, leading to some rare ill-will between the company and its customers.

One disgruntled Model S owner is Richard Wolpert of Los Angeles, who placed his order for a Model S in March and got his car in June. He says he specifically told Tesla sales reps that he was willing to wait for features like adaptive cruise control, but was told they would not be an option on the Model S. “If Tesla had said it’s coming, but we can’t say exactly when, I would have waited,” Wolpert told the Mercury News. “With ‘traditional’ car companies, we know there are new models every year, and we factor that into our decision. With Tesla, there was no talk or disclosure there would be effectively a ‘new’ Model S, so we bought blind.”

Wolpert launched a petition on Change.org asking Tesla to provide a retrofit for the new auto pilot features for existing Model S owners. As of Wednesday afternoon, more than 600 people had signed it, including several from Norway, one of Tesla’s key European markets. “Value of the car dropped overnight,” Dag Rinden of Oslo, Norway, wrote on the petition. “The security equipment is important to get. Some of it should be easy to retrofit.”

Other customers are supportive of Tesla and its commitment to making constant upgrades to its cars. “If you want a car that changes only once every year, go buy something besides a Tesla and stop telling Elon how to run his business,” says one poster on Tesla’s blog. They have started a counter-petition on Change.org.

Changes in the car business are coming at a furious pace, though Tesla’s secret announcement was nothing out of the ordinary for the industry. Tesla has, however, been a driving force for change in the way we upgrade our vehicles. Tesla owners are able to upgrade their cars the way we add apps to our smart phones, with a simple download. Siemens is developing technology that will soon let conventional cars do the same thing. The problem is, software can be upgraded easily, but hardware cannot, and the Tesla autopilot features depend on the forward looking camera, radar and ultrasonic sensors, which have to be built into the car at the factory and cannot be realistically retrofitted afterwards. This, as well as the lack of all-wheel drive, has recent buyers the most upset.

Tesla has offered unhappy customers the opportunity to trade in their car for one with the hardware upgrades, but at a substantial loss. Mihail Mihaylov of Chicago paid $140,000 for a fully loaded Model S Performance model on Sept. 29. His car does not have the hardware upgrade. A Tesla representative offered him $110,000 as a trade in for his car when it had only 1,000 miles on it. Losing $30,000 in two weeks has not made Mr. Mihaylov a happy Tesla owner.

Elon Musk is a very smart and creative person. He is a disruptive force in the automobile industry and that’s a good thing. He likes to think he is charting a course toward the way things should be and maybe he is. But the first rule for any business that wants to be successful over the long term is, “Take care of the customer and the customer will take care of you.”

Perhaps Tesla needs to rethink how it should treat its customers with regard to hardware upgrades that are in the works. Then again, he only did what every other automaker has done a million times before. Would broadcasting Tesla’s future projects be a boon or a bust for a company that proclaims to be so customer friendly?

Steve Hanley

Closely following the transition from internal combustion to electricity. Whether it's cars, trucks, ships, or airplanes, sustainability is the key. Please follow me on Google + and Twitter.