Recently, Tesla Motors has been in a battle with their Tesla Model S’s catching on fire after crashes. Within a span of six weeks, three Tesla Model S vehicles have caught on fire, putting the company under fire. Fortunately, in all cases the drivers walked away from their vehicles uninjured. But for a company that flaunts their safety ratings to consumers, the recent reports are troubling. Research from ‘Car and Driver’ shows that roughly 17 gas-powered vehicles catch on fire daily, but since Tesla is new and different it puts them under greater scrutiny.
Due to the national coverage of Model S vehicles catching on fire, Tesla’s sales and stock have taken a massive hit. In the wake of the news, Tesla stocks stumbled 26 percent and still declining. During their Q3 earning report, they had lower sales than projected due to consumers canceling orders or potential consumers holding off on their purchase.
This puts Tesla not only in a potential legal battle with the consumers’ cars that caught on fire, but also an ethical battle on how to help remedy the situation. Elon Musk, Tesla Motors CEO, believes good ethics and wants Tesla to be an ethical company. Elon and Tesla have the following Code of Ethics they abide by:
1. The CEO and all senior financial officers are responsible for full, fair, accurate, timely and understandable disclosure in the periodic reports required to be filed by the Company with the SEC. Accordingly, it is the responsibility of the CEO and each senior financial officer promptly to bring to the attention of the Disclosure Committee any material information of which he or she may become aware that affects the disclosures made by the Company in its public filings or otherwise assist the Disclosure Committee in fulfilling its responsibilities as specified in the Company's Disclosure Controls and Procedures Policy.
2. The CEO and each senior financial officer shall promptly bring to the attention of the Disclosure Committee and the Audit Committee any information he or she may have concerning (a) significant deficiencies in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize and report financial data or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's financial reporting, disclosures or internal controls.
3. The CEO and each senior financial officer shall promptly bring to the attention of the General Counsel or the Legal Department or the CEO and to the Audit Committee any information he or she may have concerning any violation of the Company's Code of Business Conduct and Ethics, including any actual or apparent conflicts of interest between personal and professional relationships, involving any management or other employees who have a significant role in the Company's financial reporting, disclosures or internal controls.
4. The CEO and each senior financial officer shall promptly bring to the attention of the General Counsel or the Legal Department or the CEO and to the Audit Committee any information he or she may have concerning evidence of a material violation of the securities or other laws, rules or regulations applicable to the Company and the operation of its business, by the Company or any agent thereof, or of violation of the Code of Business Conduct and Ethics or of these additional procedures.
5. The Board of Directors shall
