Was it actually okay for Elon Musk to decline Tesla to ‘rude’ customer?

Earlier this week, Tesla and SpaceX CEO Elon Musk showed the world that there’s more to him than the smiling innovator we see at launches and the dry Twitter persona we see the rest of the time.

After venture capitalist Stewart Aslop wrote an open letter to Musk late last year criticising the launch of the Model X, which started late, Musk responded by refusing to sell him a Tesla.

In his letter, Aslop says that Musk’s failure to apologise for the event management was “insensitive” and showed “poor judgement”.

Despite the fact that Alsop said he was still determined to buy a Model X and had put down a US$5000 deposit, Musk cancelled his order. His justification? The open letter was a personal attack.

The story’s since blown up online, with Aslop writing a follow-up letter about his banning.

But were Musk’s actions actually justified?

The customer isn’t always right

Well if Musk’s response to the story is anything to go by, it’s actually not that big a deal.

Must be a slow news day if denying service to a super rude customer gets this much attention

— Elon Musk (@elonmusk) February 3, 2016

That seems to be the line Tesla’s taking too. “You can let Elon’s tweet speak for itself,” said spokeswoman Khobi Brooklyn when CNN asked her for comment.

It’s easy to follow his logic too. After all, if a restaurant customer is causing a commotion, the owner would be well within their rights to kick that customer out. And for an example closer to the space Musk operates in, you only have to look at Uber.

Most people know that the private ride-hailing company allows users to rate drivers, and that those ratings impact on whether or not drivers are allowed to stay on the platform. Less well-known is the fact that the drivers also rate the people who ride with them and that unruly riders can be banned from Uber.

And if Twitter is anything to by, there are plenty of people who feel this way too. The tweet we’ve embedded above didn’t get nearly 8 000 likes by accident. You can’t really argue that it’s a bad business decision either. Musk could probably cull half the current waiting list for the Model X and fill up their places within a matter of minutes.

But when you think about it a little more, Musk actually loses some of his gloss.

Beating out dented egos

In order to see why, you need to look at the particular assertion made by Musk: that Aslop’s post was a personal attack.

Now, while Aslop’s post could only have come from someone with his means and privilege, it’s far more of a critique than it is an attack. There is nothing, so far as I can tell, libelous or defamatory in Aslop’s blog posts. Indeed, given the level of service Tesla promises its customers, you could probably argue (entitled as it might seem) a lot of Aslop’s complaints are completely justified.

As Aslop himself notes, it’s also highly unusual for the CEO of a company to refuse service to a still-excited customer in the face of a critical blog post. “When I wrote a blog post about my BMW X1 called “My Car Makes Me Feel Stoopid”,” he writes, “the CEO of BMW didn’t take the car back. And in the many articles and posts I have written criticizing products, companies and people, I have never been banned from doing business with any of the companies!”

Again, Aslop isn’t railing against Tesla. He makes that point himself. “Since we had our conversation,” he writes, “I looked around and realized that it is not possible to buy the equivalent of or even a pale copy of the Tesla Model X (or Model S, for that matter), which is real testament to how distinctive a product your company has produced”.

It’s also worth bearing in mind that Tesla isn’t the sole preserve of Musk, to do with as he pleases. Yes, he’s the CEO, but he only owns around 27% of the company — hardly enough to make it his personal fiefdom.

As Tesla is a publicly traded company, Musk is bound to act in the interests of its shareholders. And taking an action as maverick as banning a customer on the basis of a “rude” blog post is at best a risky bet and, at worst, likely to make a bad situation worse.

As CNN notes, Tesla shares are down nearly 30% so far this year, hitting their lowest level since February 2014 on Wednesday.

That may be a temporary setback, fueled by worries that the dramatic drop in the oil price seen over the past few months could reduce demand for electric cars. Even so, you’d hardly think that now would be the time to cause an unnecessary uproar by barring a customer who still very much wants, and is willing to pay for, your product.