Tesla’s Trust Problem - It’s Not What You Might Think

Here’s the just-the-highlights version of events: man buys a used Tesla, upgraded under warranty to have a Model 90 battery & range rather than the Model 60 battery & range it originally came with. When the owner had his car serviced, Tesla remotely reset the car’s range to Model 60 levels and demanded $4,500 to restore the car to how it had been when the owner purchased it - and for several years before that. 

What is the Impact of This Decision by Tesla?

When the owner couldn’t resolve the situation with Tesla successfully, they went to Twitter. The automotive and tech press quickly picked it up, and before too long, there were lots of angry people talking about Tesla forcing this man to pay a ransom for his own car. Tesla reversed position, and the car again had the Model 90 range. 

But it’s more damage done to a brand that doesn’t have the greatest customer service reputation, to begin with. It’s problematic when a brand won’t honor the work done under its own warranty. Because this appears to be an ongoing situation, with multiple buyers experiencing the same problem, there’s a negative impact on the resale and long-term value of the cars. 

Does this explain the emotional intensity of the public’s response to the story? No. For that, we have to look a little closer at this situation in terms of the trust. How much trust are you willing to give a brand, and when do you say enough’s enough?

Trust & Tradition are Inextricably Linked - Even Though Times Change

At the heart of this conflict is the changing nature of ownership. We’ve discussed this tension before when President Biden signed the Right to Repair legislation: when people own a piece of farm machinery, they have the right to fix it themselves because it’s theirs.  

In the common understanding - and long-held tradition - ownership conveys the right to maintain, alter, dispose of or even destroy an item. Tesla’s contract terms increasingly encroach on these aspects of ownership, imposing a more subscription-style approach to the customer relationship instead. That’s a big ask, especially considering the unique role cars occupy in the American psyche.

Ownership is also an act of self-expression. Our possessions are one of the ways we define who we are. We become attached to the things we own, and they become imbued with our ego - in other words, the objects we own alter how we see ourselves and how we think other people see us. 

When Tesla remotely alters a car, significantly absent consent, as in this scenario, it hits the ego. The owner is abruptly and suddenly aware that their relationship with their car is not what they thought it was and that they are powerless in a situation where they’d thought they had some degree of control. Add to that the fact that cars for many people mean freedom, security, ability to access work and care for their families - the sort of vital interests that people will inevitably prioritize over any sense of brand loyalty.

Now I think it’s fair to say that Tesla’s leadership isn’t known for making business decisions based on how they’ll make his customers feel. But for the rest of us, who aren’t able to buy and bluster our way through dubious decisions, it’s good to make choices that build trust. That doesn’t mean following tradition at all costs all the time - but the further you get away from the usual position on things like ownership, the better at communication your brand needs to be. Surprise ransom payments may be financial windfalls, but they’re very expensive for the brand.