Summary
There's a new Tesla scandal brewing.
Tesla, which once used OTA updates to improve customers' cars, has now crossed the Rubicon.
Customers can no longer be sure an OTA update won't be carrying undisclosed updates seeking to reduce Tesla's liabilities.
My bearish thesis on Tesla (NASDAQ:TSLA) is simple: A capital-intensive enterprise running at a loss even while having the high-end EV market it sells into all to itself. Once true competition arrives (starting mostly in 2018, though the Bolt already shows a proper EV powertrain), Tesla will see even lower margins than the ones it enjoys today. Given this dynamic, Tesla will have bankruptcy risk in a competitive EV environment.
This article, however, is about a different development. I'd gather that most investors, even most of its bullish fans, don't follow Tesla close enough to know of all the new developments. There was, once, a tiny scandal where Tesla ended up having to settle with Norwegian customers because of having made what turned out to be unrealistic horsepower claims. That, along with other smaller issues like using different calculation methods for the 0-60 mph times, gracefully fell by the wayside.
However, there's a new scandal brewing whose implications might be far larger. Let me give you some context.
