The company is forging ahead with plans to increase sales of its electric cars, and is even building a huge battery factory to cut manufacturing costs. Its annual 10-K document makes for interesting reading, with a unique set of risk factors outlined by the company.
After-sale modifications a cause for concern
Some of the concerns are more obvious than others, including the safety of the lithium ion batteries used in its vehicles and the high manufacturing costs of the Model S, but one risk factor is particularly interesting. The company has told investors that customers who hack into their car systems to make modifications could present a real risk to the business.
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Tesla states: “If our vehicle owners customize our vehicles or change the charging infrastructure with aftermarket products, the vehicle may not operate properly, which could harm our business.” One particular group flagged by Tesla is “automobile enthusiasts” who may attempt to hack their vehicle to improve its performance; the company warns that in doing so they could inadvertently compromise safety features.
Another point of concern is the fact that a small group of customers have changed the position of the driver’s seat, consequently reducing the effectiveness of the airbags.
Tesla speaks out
“We have not tested, nor do we endorse, such changes or products. In addition, customer use of improper external cabling or unsafe charging outlets can expose our customers to injury from high voltage electricity,” Tesla said. “Such unauthorized modifications could reduce the safety of our vehicles and any injuries resulting from such modifications could result in adverse publicity which would negatively affect our brand and harm our business, prospects, financial condition and operating results.”
Despite a period of rapid growth, Tesla remains a tiny part of the behemoth that is the automotive industry. The growing adoption of electric cars has seen the company face tough questions over safety, especially in the wake of reports that some of its cars have caught fire after being involved in road traffic incidents.
The risk to the company arises because Tesla has almost zero control over what customers do to their cars after they buy them, but it will be their reputation that suffers should a serious incident occur due to unofficial modifications.