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Tesla Motors: stocks plummet, but the innovations continue

Tesla’s products have always created buzzing excitement; so why has Tesla been plagued with financial difficulties and what can you learn from them?

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Tesla Motors: a mixed bag of news

Tesla Motors has been making a lot of headlines lately with both its achievements as well as its losses. The electric car manufacturer, which produces an AC powered sports car and luxury sedan, will roll out the world’s first electric SUV later this year. The company is named for infamous visionary physicist, Nikola Tesla, whose 1882 AC motor design directly inspired Tesla Motor’s vehicles.

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Tesla just released a video, via Twitter, of a prototype of its “snakebot autocharger” in action. This futuristic feature resembles a metal-plated robot snake that automatically senses when it’s charging point is nearby and gracefully slithers into place to begin charging the vehicle, even after you’ve wandered away from the garage.

A Tesla car recently got hacked

Around the same time, two researchers discovered how to hack Tesla’s Model S. Electric cars can’t be hot wired and stolen like regular vehicles, but their software can be hacked so that thieves could remotely start and stop the vehicle’s engine. The researchers discovered six major vulnerabilities in Tesla’s security systems.

Tesla immediately hired the researchers to help them resolve the problems, hired respected security expect Chris Evans to head the Tesla security team, and issued a downloadable software update to Model S owners to protect against hackers.

The company issues a security patch, moves on

Despite these weaknesses in security, Kevin Mahaffey of the research team that hacked the Model S, considers Tesla’s vehicle to be “the most secure car that we’ve seen.” The research team was impressed that Tesla was able to quickly and remotely send out a software update.

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They say that modern smart cars need to be updated as or more often than a home PC, so being able to send out these updates over the air is a huge advantage.

They were also pleased to see that Tesla, unlike other manufacturers like Jeep, has thought ahead about the safety consequences of a potential hacking. If your Jeep gets hacked and your engine is cut off remotely while you’re driving, it’s likely they’ll be scraping you off the pavement. Tesla’s vehicles, on the other hand, if hacked, will go into neutral and the driver will still have control over the steering and brakes, allowing you to cruise to safety.

It took some time, but the company turned a profit

The sheer ingenuity of Tesla’s products has tech and automotive geeks excited, and yet Tesla Motors has been plagued with financial insecurities throughout its lifetime. The company was founded in 2003, yet didn’t turn a profit until ten years later.

In a recent announcement of its second quarter earnings for 2015, Musk admitted that they would not be able to reach their goal of disturbing 55,000 electric SUV’s this September, and would shoot for a more modest 5,000. Within minutes, Tesla’s stock dropped by eight percent.

Apparently the Model X, with its Back to the Future style fold-up doors, is perhaps the most challenging vehicle to build on the market today. The Model X shares an assembly line with the Model S at Tesla’s Fremont, California factory, and Musk thinks this might slow down their entire operation as they troubleshoot some of the finer points of building the first electric SUV.

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Will they reach their profit goals this year?

Although the announcement that they’d be rolling out fewer Model X’s than expected scared some stockholders into selling, Tesla did have some good news to share, as they revealed better than expected second quarter earnings, with slightly more revenue generated and less net loss than analysts had predicted. What’s more, its new program to sell used electric cars generated an additional $20 million in profits. Industry analyst Cathie Wood says that “the fact that used Teslas were selling faster than they were coming in indicated the company might have a potential winning hand moving into the used car market.”

However, Tesla’s chief financial officer, Deepak Ahuja, said it would be too “close to call” as to whether or not they would reach their profit goals for the end of this year, and may need until the first quarter of 2016 to catch up.

Regardless, the innovations continue

Despite the company’s financial ups and downs, its CEO, Elon Musk, still has more than enough cash on hand to contribute to charitable causes he cares about such as – get this – protecting the world against a potential robot takeover. Early this year, Musk donated $10 million to the Future of Life Institute, a non-profit organization that researches “artificial intelligence safety.” The donation will be used by FLI to fund an open grants competition, and the organization is calling for proposals for new research and ideas around protecting humanity from the potential negative impacts of artificial intelligence.

In an interview, Musk explained that, when it comes to artificial intelligence, it is possible to imagine disaster situations in which “recovery of human civilization does not occur.” He argues that is time to invest in preventing such negative outcomes, rather than reacting to them after it’s too late.

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Wise advice from the man behind the automatic snakebot, who will also be releasing an autopilot test program to select electric car drivers later this month. Soon Musk will be delivering cars that charge and drive themselves – but that doesn’t mean he trusts the robots not to take things too far.

#Tesla

Ellen Vessels, a Staff Writer at The American Genius, is respected for their wide range of work, with a focus on generational marketing and business trends. Ellen is also a performance artist when not writing, and has a passion for sustainability, social justice, and the arts.

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  1. Pingback: Tesla Model S P85D rocks so hard it broke Consumer Ratings' ratings system - The American Genius

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