The ethics of Tesla

The commentariat has been much absorbed of late with the wealth destruction self-inflicted on Tesla by Elon Musk. One report suggested that his net worth loss of $200 billion in a single year set a new world record. Tesla stock tanked as he sold it to raise funds for Twitter capers. Evidently the investor class has already had its say (ↆ); but what about the buyers of EVs? Do they care about his petulant behavior? Or are they still enthralled with his pioneering EVs?

Few EV enthusiasts will forget the critical role Musk played in showing the world that clean transportation was possible using batteries that individually were the size of a finger. Nor are EVers ungrateful that Musk spent a staggering amount of his own money building the world-class Tesla charging network when the other car manufacturers were sitting back and waiting for taxpayers to build it for the companies’ benefit. And Musk had the good business sense to make his new product “cool” and thereby engender a lot of interest among trend-setters.

But many EVers are agonizing over Musk’s latest misadventures, in which he has seemed to delight in boosting climate conspiracy theorists and other opponents of clean energy (e.g., the Donald), enemies of public health (blocking safety measures at his factories), defenders of labor rights (insisting on unpaid overtime for Twitter employees), and assaults on world peace (seemingly backing Russia against Ukraine, though he continues to pay for Ukraine’s internet access). Investors, tweeters, and progressives have given Musk and Tesla a collective raspberry. One Nobel Prize-winning economist summed it up as: “I wouldn’t trust him to feed my cat.” (https://www.nytimes.com/2022/12/27/opinion/tesla-stock-elon-musk.html?searchResultPosition=2).

Teslas are still great cars, of course, but does it matter to buyers that they are handing over wealth to an erratic guy who will use that wealth to attack the values that many buyers embrace, like supporting democracy and solving climate change? That is an individual decision, naturally, but many investors have grown alarmed at the brand destruction, or as the same Nobel Prize-winning economist put it incredulously, “Does Elon know who buys his stuff?” (https://www.nytimes.com/2022/12/30/opinion/elon-musk-tesla-democrats.html?searchResultPosition=3). Full disclosure: I share some of these concerns (though this web site takes no position on Elon’s politics, and it takes no money from any commercial source).

What should be the ethics of car buying? Should buyers restrict their decisions solely to the quality of the produced cars, or is it permissible to factor in the financial consequences of their purchases? Feel free to leave comments to this article expressing your personal conclusion on this topic.

It is tempting to broadly assert that buyers are and should be unfettered in what they may use as criteria for making purchases. But keep in mind the potential for misuse of this discretion. For example, I recall the Christian business directories of my youth (and dating back to the Middle Ages – the directories, not my youth!), which implored believers to shop only at the listed establishments. I interpreted this as a thinly veiled antisemitic device to run the Jewish shop owners out of town. Not all criteria for purchasing decisions are equally valid; narrow-minded buyers are easily tempted to use xenophobic or racist criteria. Not only is fairness an important component of civil decency for any economic decision, but fairness is likely more sustainable than unfairness. So, one criterion for making buying decisions might be fairness.

But different buyers hold many different views; should MAGA voters boycott Tesla because Tesla has an implied bias towards renewable energy sources? What is to keep EV sales from becoming a political football rather than a rational response to global problems?

Fortunately, there are now dozens of EV manufacturers, many without the political baggage of Tesla. But are those companies working towards the same goals as Tesla, just doing so without the high media profile? And is Musk’s regressive front-page-every-day image accurate, or does Tesla do some good things quietly? It is not easy for a consumer to know. Is it our responsibility as consumers to find out? Does being a responsible consumer imply a greater depth of knowledge than many of us are willing to work for? Or does an unwillingness to do due diligence free us from that responsibility? Are we not responsible for the effects of our actions even if we haven’t looked into them?

If we use a manufacturer’s image as a partial basis for sales, we justify the staggering advertising expenses associated with car manufacture (how may ads are no more than virtue signaling?). This confirms that the manufacturers are convinced that virtue signaling is worthwhile, and therefore that buyers do at least subconsciously consider the company’s image when making a purchase. This leads to green-washing, or the practice of advertising small benign actions to mask the massive damage done by polluting industries. These ads work, because most consumers don’t have access to the facts, or chose not to do due diligence. Thus, consumer due diligence is a restraint on the effectiveness of green-washing.

Consumer due diligence might also convince smart CEOs to keep their traps shut. Perhaps Elon is learning that message; it cost him at least $200 billion to find that out, but he’s not such a quick study when it comes to social engineering. Forcing manufacturers to keep a low profile might be good, or it might simply coax them to exert their influence behind closed doors.

I’d guess that consumer responsibility scales with sale magnitude. We have more obligation to society when making a big purchase than when buying a candy bar. Purchasing a used clunker conveys less economic impact than buying a new Hummer. New car sales numbers are read by manufacturers as endorsements; whereas used car sales have a small effect on the image of a model’s economic durability and therefore value when new, but that effect is modest and indirect.

The pervasiveness of green-washing implies that manufacturers are already convinced that a company’s image is important for sales. Tesla’s stock price collapse is evidence that investors also believe this. That being the case, should we not take them at face value and apply ethical standards to the conduct of their businesses? Who is to provide the data? Most media outlets appear beholden to advertisers; do no-ad outlets like EV4Corners.org therefore have an outsized obligation to vet the ethical behavior of EV manufacturers? This is ground we have not covered; should we?