On May 18, Tesla and Musk combined to sell some $2 billion of the luxury electric car company’s stock valued at $215 a share.
Goldman Sachs served as lead book-runner for the underwriters of the stock offering after upgrading Tesla from “Hold” to “Buy” for the first time in three years.
On June 30, the NHTSA announced its current investigation of Brown’s death.
Tesla released a statement addressing the incident for the first time that day.
The optics look pretty bad here, if nothing else. So, Tesla has released another statement trying to clarify the timeline of events, including when exactly they informed the NHTSA of the incident (spoiler: sometime later than whenever “immediately” is).
Musk initially told Fortune that Brown’s death “is not material to the value of Tesla.” The offer and sale of securities does not operate on the “buyer beware” principle that largely governs the purchase or sale of other stuff in the US. Since you can’t exactly test drive an intangible asset like Tesla’s stock, which depends for its value on the performance of the company issuing it and the market’s assessment of the company’s prospects, the law requires that Tesla disclose all material information about itself to each prospective buyer. The goal here is that the buyer makes an informed investment decision.
Is Brown’s death a material fact? Tesla calls it “A Tragic Loss.” It’s definitely that. And it definitely took place in a material world, despite Musk’s belief that we likely live in a simulation, i.e., in an immaterial world. But does not knowing about Brown’s death mean that those who bought Tesla stock did not make an informed investment decision? Perhaps not, though I’m guessing investors would still rather they knew whatever Goldman Sachs knew before they upgraded Tesla’s stock in May.
But an even more important point risks getting lost in the weeds here. Tesla’s initial public statement on Brown’s death makes it clear that as long as driverless cars of one sort or another are on the road, all of us are participating in an experiment: “As more real-world miles accumulate and the software logic accounts for increasingly rare events, the probability of injury will keep decreasing.” In short, every time a driver uses Tesla’s Autopilot, the company learns more about driverless technologies that it’s developing. Not in a lab somewhere. On U.S. Route 27 in Williston, Florida. And, ostensibly, for a profit.
Driverless cars will save lives. But let’s not get cute. Injury, if not death, will continue to be part of that process.* If the history of making seatbelts a mandatory safety feature is any indication, it could take many more incidents.
The only thing I really want to say now is simple and totally violates all the rules for how to end an argument, namely, by introducing a new point—but whatever: Because driverless cars hold the key to making a greener infrastructure for transportation and logistics, they should be greeted with open arms. A fleet of electric cars carrying passengers across town or electric trucks transporting products across the country would itself be a climate game-changer. We just haven’t seen that reality take shape. But by removing the driver to make these processes cheaper and safer, we might yet, and that would also be some small justification for a product development process that has already resulted in death.
Driverless cars are a lot less scary than Tesla’s handling of Brown’s death and the subsequent sale of stock that took place without its announcement. We should expect better, even when a company makes stuff we want and especially when they promise so much. The driverless car will provide a safer and more comfortable way to travel. It will lead to greener infrastructure with fewer vehicles of all kinds on the roads. And it will continue to cause harm—it just better not cause more harm than it does good.
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(* — Tesla has in this way come down clearly in favor of killing some to save many. It’s actually a situation eerily consistent with the infamous “trolley problem” in which pushing a large man off a bridge onto the tracks below will stop a trolley before it hits five other people. Sure, the man will die but the others will be saved. But would you push the man off the bridge? Tesla might, to save some face, heed the advice behind the results found in a new study of more than 2,400 participants, which showed that how you answer the trolley problem impacts how much people trust you. Hint: irrational as it may sound, people like it a lot more when you follow clear rules and care a lot less about outcomes.)