Tesla Revelations Spotlight Considerations for Companies in Crisis
Continuing news coverage of fatal accidents involving Tesla’s highly-touted Autopilot feature– and the company’s response--underscore the need to grapple with how much information to make public in a crisis.
Crashes linked to Autopilot are at the center of civil lawsuits brought against Tesla and the feature also is the topic of a Justice Department investigation. There are at least 10 active lawsuits involving autopilot, according to the Washington Post, which recently detailed one case involving the death of a 50-year-old man in 2019 in Delray Beach, Florida. His Tesla Model 3 hit a tractor trailer, slicing off the roof, seconds after he’d activated Autopilot.
The newspaper reported that there have been more than 700 U.S. crashes since 2014 involving Tesla in Autopilot mode. At least 19 of them were fatal.
Tesla has been aggressive in marketing the Autopilot feature. But the company’s critics, and relatives of those who have died in crashes, say the advertising significantly exaggerates the system’s abilities and creates a false sense of safety.
Tesla’s reputational challenges are mounting. This week, the company disclosed in a Securities and Exchange Commission filing that it received a Justice Department subpoena related to Autopilot. The company also said the Justice Department sought information about “personal benefits, related parties, vehicle range, and personnel decisions” but didn’t elaborate.
“Should the government decide to pursue an enforcement action, there exists the possibility of a material adverse impact on our business, results of operation, prospects, cash flows, financial position, or brand,” the filing said.
Tesla’s chief executive, Elon Musk, insists that Autopilot is safer than cars driven by humans. He has rejected concerns over autopilot as “overblown” and has accused his critics of being Luddites.
But Tesla has drawn criticism for releasing less information on crashes than in the past – increasing the reputational risk. The company, without explanation, stopped releasing safety data that compares the number of accidents per mile on autopilot mode to those off autopilot mode. The last report was in the fourth quarter of 2022.
This situation is similar to the challenge many organizations encounter when faced with litigation and government investigations. Lawyers typically advise companies to release as little as possible to prevent new information from being used against them in court. Developing a communications plan in partnership with the legal team is key. It’s important to find a balance between legal imperatives and releasing enough information to build trust with the public and mitigate the damage of the crisis.
Decisions about how much information to release during a crisis need to be made on a case-by-case basis – with a clear understanding of the potential repercussions of each approach.
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