Elon Musk had a bad week
In what’s been a particularly eventful year for Elon Musk, this was a decidedly rough week.
Tesla‘s stock, which has lost almost half its value since peaking in November, dropped nearly 6% in the last week, as investors continued to sell out of their tech holdings.
There are internal matters at Tesla that aren’t helping. This week, they were tied to safety issues with the company’s advanced driver-assist systems.
Musk’s other big company, SpaceX, fired a group of employees who circulated an internal letter that reportedly denounced the CEO and founder as a “distraction and embarrassment.” Meanwhile, the Federal Aviation Administration on Monday handed SpaceX’s Starship rocket program a long to-do list before it can receive a launch license in Boca Chica, Texas.
Then there’s Twitter. Musk agreed to buy the social media company for $44 billion in April, but has since publicly trashed it, raising all sorts of concerns about whether the deal will actually close. On Thursday, Musk spoke to Twitter employees for the first time in a video address that was widely panned, based on messages that showed up on the internal chat board.
Here’s what went down in Musk town this week.
Problematic data on driver-assist crashes
The National Highway Traffic Safety Administration said on Wednesday that Tesla vehicles accounted for nearly 70% of reported crashes involving advanced driver-assist systems since last June. Data provided by the U.S. safety agency said the electric cars were involved in 273 of the 392 accidents cited in the report, which included data from 11 automakers.
Still, the NHTSA said the data doesn’t have proper context and is only meant as a guide to quickly identify potential defect trends.
“I would advise caution before attempting to draw conclusions based only on the data that we’re releasing,” NHTSA Administrator Steven Cliff said during a media event. “In fact, the data alone may raise more questions than they answer.”
Tesla hikes prices across U.S. car models
When Musk announced plans in June to cut 10% of Tesla’s workforce, the CEO said he had a “super bad feeling” about the economy. For consumers, those concerns are turning into sticker shock.
Tesla hiked prices for all car models in the U.S. this week as the auto industry continues to grapple with supply chain issues, inflation and economic uncertainty.
The company increased the price of its Model Y long-range version to $65,990 from $62,990, and raised the performance model by $2,000 to $69,990, according to its website. Electrek said the price of the Model S Dual Motor All-Wheel Drive increased by about $5,000 to $104,990. The Model X Dual Motor All-Wheel Drive Long Range went up by $6,000.
Tesla had previously delayed deliveries of some of the long-range models in the U.S. by up to a month.
FAA says SpaceX Starship program needs adjustments
The FAA on Monday made an environmental decision that resulted in a mix of good and bad news for Musk’s SpaceX, and the mammoth Starship rocket the company is developing in Texas.
The regulator issued a list of more than 75 environmental mitigation actions the company must complete before it can move forward with Starship flight tests. Included in the requirements are limitations on noise levels and how often SpaceX can close the public highway near the facility.
After the FAA’s decision, Musk said the company will have a Starship prototype rocket “ready to fly” by July. The company is aiming to reach orbit with the vehicle for the first time. But it first requires a launch license from the FAA, and the regulator’s required mitigations amount to a significant lift before the company can request one.
The good news for SpaceX is that the FAA has concluded its assessment, and is not requiring a more in-depth review.
SpaceX employees embarrassed by Musk
An unknown number of SpaceX employees wrote and internally circulated a letter that was critical of Musk and his public behavior, describing him as “a frequent source of distraction and embarrassment,” according to media reports. CNBC reported Friday that at least five employees involved in the letter were fired as a result.
SpaceX President and COO Gwynne Shotwell, in a company-wide email obtained by CNBC, claimed the letter and process to solicit signors “upset many” employees, who she said felt “uncomfortable, intimidated, and bullied.”
“We have too much critical work to accomplish and no need for this kind of overreaching activism,” Shotwell wrote. “I am sorry for this distraction. Please stay focused on the SpaceX mission, and use your time at work to do your best work.”
Musk’s call with Twitter employees didn’t go well
With Twitter’s stock price trading around $37, well below the $54.20 Musk agreed to pay for the company, investors and employees are justifiably concerned about what the future holds.
Musk’s all-hands meeting with Twitter staffers on Thursday seemed like an effort by the potential future owner to establish a sense of trust and transparency with the people who would be working for him.
But reactions on Slack following the meeting indicated employees were still left with questions and concerns, according to a person who saw the messages but asked not to be named as they were intended to be private.
While former CEO Jack Dorsey promised employees the option to work remote permanently, Musk has taken a very different approach with his companies, recently demanding that Tesla and SpaceX workers be in the office at least 40 hours a week.
Musk said on the call that he may not be as strict with Twitter employees, because developing software can more easily be handled from afar while car manufacturing requires physical presence.
But his answer didn’t appear to calm concerns. His comments also left some Twitter employees fearing for their jobs, according to the person familiar. In addressing concerns about potential layoffs, Musk said Twitter needs to get into a healthy financial state, but that “anyone who is a significant contributor has nothing to worry about,” according to the person.
In response, Twitter employees shared messages and memes toward the end of the meeting riffing on how to brand themselves as exceptional.
—CNBC’s Michael Wayland contributed to this report.
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