[Update: since making this original post, we’ve obtained the full text of the agreement Tesla is asking clubs to sign. Since it is already public domain, we’re linking to it here.]
For as long as automakers have been churning out cars, loyal customers have been joining together to form owners’ clubs. It doesn’t matter if you happen to drive long-forgotten cars like the Austin Maestro and King Midget or still-in-production cars like the the Nissan 370Z or Ford Focus: someone, somewhere probably has a club that you can join up with, simply for owning a particular vehicle.
Some clubs are specific to a particular make and model like the ones listed above. Others are more varied, offering ownership to anyone with a particular make (or age) of vehicle. In return, clubs often negotiate special deals on behalf of their members for spare parts, servicing or insurance, hold regular meetups and sometimes — with the blessing of the car company in question — join forces to hold events together.
Typically, such clubs are run fairly autonomously from the automaker in question. While there’s often a tacit (or formal) understanding between the club and the automaker that the club can use the automaker’s name somewhere in the club name — sometimes even allowing the automaker’s logo to be used in any club artwork — most clubs keep interactions with the automaker to a minimum. And while clubs will sometimes use their collective bargaining power to petition an automaker when things go wrong (as was the case with the various unofficial Nissan LEAF owners’ clubs and forums with reference to premature battery aging of early LEAFs in hot climates) both parties usually treat each other with public (if not always private) respect.
Even in the case of ‘official’ owners’ clubs — in which third-party, independent groups pay a fee or hand over some nominal rights to the automaker in question in order to become the sanctioned portal for owners — members aren’t expected to do more than hand over a monthly membership fee or help out at events to join. And while a few automakers do set up their own in-house owners’ club — where the automaker has ultimate say in how the club is run, how it is structured and what members can and can’t say about the brand — they tend to be less popular than fan-run ones.
It’s very rare indeed for an automaker to insist it approves each and every group seeking to become an owners’ club, rarer still for the automaker to require any official clubs to sign a non-disclosure agreement, insist it helps fight IP infringement, promise to support local legislative efforts and even inform the automaker before selling any products or services to its members.
Yet that’s the price of entry for any Tesla fan club seeking to become legitimately associated with the California automaker.
It’s all part of a push by Tesla to ensure that any Tesla-branded fan clubs in existence are on its side, rather than fighting against it, and that those same clubs share Tesla’s key values and practices. Yet some of the language used in the legal paperwork Tesla is asking fan clubs to sign suggests Tesla may be wanting its casual fans to do so much more.
In exchange for agreeing to the terms, Tesla has said it will supply the Eligible Club — but not its members — with a code entitling the club as an entity to a one-off, 35 percent discount off merchandise per year, host a club event at a Tesla store or service center of the automaker’s choosing (but warns it will not provide members with pre-release or ‘sneak peak’ information).
We first became aware of the issue at the start of the week, when an anonymous source sent us an excerpt from official documentation Tesla is reportedly asking fan club organizers to sign. But after a little looking, we discovered we weren’t the first to encounter this issue: our friends over at Recode covered it at the end of last month, when it asked if Tesla’s fan base will be as fervent now that Model 3 was readying itself for market.
We’re not sure we can answer that particular question, but we can say that of the Tesla owners we’ve spoken to who are knowledgeable about the membership documentation Tesla began sending Tesla clubs all over the world late last year, some feel Tesla is trying too hard to shoehorn a round peg into a square hole.
Take club structure, for example. As with any hobby or interest, the various different Tesla groups that exist around the world are arranged in a variety of different ways. Some are formally structured, with a officially nominated chairperson, treasurer and secretary. They have bank accounts, legal advisors and a formal membership application process.
Others are online forums, where membership requires you to sign up and agree to simple boilerplate terms and conditions.
Others are simply social groups, with no official leader or chairperson. Using existing third-party social media sites and networking tools, they arrange informal drives or coffee meetings every few months, where owners meet, chat about their cars, and enjoy each others’ company.
Yet in order to be considered an eligible ‘official’ Tesla club, Tesla says that an organization must “maintain a minimum membership in excess of 25 Tesla owners,” and that it must “notify Tesla of changes in the Eligible Club’s presidency (or equivalent) and if different from such person, appoint a reliable Club Contact for Tesla to engage with on important issues.”
In other words, Tesla wants to be able to contact someone within each and every club to act as a point of contact. While we’ve not seen the agreement in full, we’d guess such a contact would be expected to communicate directly with Tesla about any concerns or complaints local members had and perhaps even coordinate on any media-related issues such as club press releases.
In a world where there’s a new website, blog or company launching every week specifically designed to target Tesla fans and Tesla customers, it’s hardly surprising that Tesla is looking to formalize the massive number of Tesla fan clubs now in existence around the world. It’s not surprising either that it is trying as hard as it can to ensure that any media coverage (or club activities) are as positive as possible. Any company in a similar position would likely take similar action.
Other parts of the agreement — ones in which Tesla agrees to license the Tesla name and ‘brand features’ to eligible clubs, subject to approval of placement and context every time its brand image and name are used — are fairly understandable too, as are the requirement that clubs agree to maintain a separate identity and distinctive branding. After all, it makes sense for Tesla to ensure that nobody becomes confused over the difference between a Tesla-organized event and an owners’ club event for example.
But here’s where things start to become a little more unusual. Tesla asks clubs seeking to become official Tesla-sanctioned entities to agree to “assist Tesla in curbing IP infringement and unauthorized or illegal data breaches.”
In its most severe interpretation, an IP infringement could be as simple as a club member sharing information about how Tesla’s massive 17-inch touchscreen system is connected, or how they were able to carry out minor accident repair to their car on the cheap. Projects like the Stretchla (already shut down more than two years ago after Tesla refused to sell parts to the individual in question), su-tesla, and the Tesla Model S Autopilot Retrofit project could all fall foul of this clause, in short, killing any DIY repair among Tesla owners.
Then there’s the requirement that clubs provide “reasonable assistance” in supporting local legislative efforts, participation in surveys and focus groups, or helping Tesla to test new software.
In isolation, many owners would freely offer to carry out such duties as a matter of course. Indeed, turning up at the local courthouse or legislature to protest a law which would prevent Tesla from selling direct to customers in their local town or state is something that Tesla’s customers are already well versed in.
But the language used by Tesla suggests that such participation is expected rather than welcomed. Similarly, it expects its customers to participate in surveys and focus groups, or beta-testing of new software.
Another part of the agreement could give Tesla final say over the social media content of the club, and rights-free, perpetual use of any images captured by the club at the event. In other words, free advertising.
Some experts we’ve spoken to even suggest that the wording of Tesla’s agreement could give it authority to demand clubs take down member posts from online forums or refrain from posting content that shows the automaker in a negative light. In other words, agreeing to the document could gag disgruntled owners.
For some, that’s well beyond the relationship an automaker should have with its customer, regardless of their participation in an owners’ club or not.
“The risk of such heavy handed tactics is that they alienate the organic support the drivers are offering [Tesla] in the first place,” electric vehicle advocate and industry analyst Chelsea Sexton told us via email today. “No other automaker would get away with such things.”
And that, we fear, is why Tesla risks leaving a nasty taste in the mouths of those who have thus far, supported its innovative and unusual approach to automotive sales and service.
After all, when you’ve paid upwards of $75,000 to own the world’s most advanced electric car, haven’t you earned the right to join a club celebrating your favorite electric automaker without having to agree to the fine print first?
In preparing this article, we sent Tesla representatives the following questions:
1) Is Tesla seeking to formalize official clubs?
2) The language indicates that Tesla will expect clubs to sign NDAs in order to be official clubs. Consequentially, does this not mean owners will be unable to vent their frustrations publicly if things go wrong with their cars?
3) Can you give me an idea of what the goal is for both Tesla and the clubs?
4) Can you discuss the IP infringement clause? What do you mean here?
While Tesla responded, stating that it began to (very publicly) create the club process in November 2015, it has not directly responded to our questions or follow up emails on the matter.
Do you belong in a Tesla Owner’s club? Do you think Tesla’s terms are fair for those seeking to officially align themselves with the brand? Or do you think Tesla is stepping over the line and taking advantage of its loyal fanbase?
Leave your thoughts in the Comments below.
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