In a series of tweets and then in a phone call to CNBC, Musk blasted reporter John Broder’s damaging review of the plug-in sedan in last Friday’s New York Times, saying the car died because the reporter didn’t follow the company’s test-drive instructions. And Musk claims he has proof: “Vehicle logs tell true story that he didn’t actually charge to max & took a long detour,” according to one tweet. Musk told CNBC that Broder took “an extended tour through Manhattan” and at times drove “10 miles or above the speed limit.” He promised more details in an upcoming blog post on Tesla’s website.
The New York Times shot back, saying the account was “completely factual, describing the trip in detail exactly as it occurred. Any suggestion that the account was ‘fake’ is, of course, flatly untrue. Our reporter followed the instructions he was given in multiple conversations with Tesla personnel. He described the entire drive in the story; there was no unreported detour. And he was never told to plug the car in overnight in cold weather, despite repeated contact with Tesla.”
Broder recounted his round-trip drive between Washington and Stonington, Conn., which included stops at the first fast-charging stations in the Northeast. But in the frigid weather, he wrote, the Model S didn’t have enough juice to complete the trip, and ended up being hauled to a charging station on a flat bed truck. The Environmental Protection Agency estimates the 85-kilowatt-hour battery in the Model S Broder tested has a range of 265 miles. Under “ideal conditions,” Tesla claims it can actually go up to 300 miles between charges.
The review certainly wasn’t pretty, and its timing was especially unfortunate, just 10 days ahead of Tesla’s fourth-quarter results. The start-up, which is still fighting for credibility, has posted a loss in every quarter since its initial public offering in 2010, including a $111 million loss in the third quarter, on revenue of $50 million. In October, Tesla raised $193 million in a secondary stock offering. Success of the Model S, which ranges in price from $54,000 to more than $100,000, is seen as critical to the company’s survival.
While Tesla can count Daimler, Toyota Motor and Panasonic among its investors, others are betting against the company. The Wall Street Journal reported that several investment funds, including Cadian Capital Management and Barclays, have taken out significant short positions on the company, expecting its stock to fall.
A Journal analysis of Nasdaq data found that as of the end of December, Tesla was one of the most shorted stocks on the exchange, with open short-sales positions equaling nearly 24% of the company’s shares outstanding. When investors short a stock, they borrow shares, hoping the price falls so they can buy the stock back later at a lower price, return the shares and make a profit.
Tesla stock fell 2 percent Monday after Twitter lit up with Musk’s comments.
It remains to be seen whether the founder’s complaints are valid. It is not unprecedented for the media to rig a product test in order to produce a story’s desired outcome. Back in 1993, NBC famously admitted it had planted remote control explosives under the bed of a General Motors pickup for a story portraying GM trucks as vulnerable to fiery explosions in side-impact collisions.
It’s not the first time Musk has accused the media of distortion, either. In March 2011, Tesla sued the BBC for libel, arguing that hosts of the popular TV show “Top Gear” defamed the company by claiming the Tesla Roadster achieved a paltry 55 miles of range on the show’s test track, significantly less than the 200 miles or more Tesla claims for the car. Tesla lost that case.
I personally doubt that the Times “faked” anything. At worst, I suspect there was some miscommunication between the reporter and the company about the performance expectations of the car.
But I do know this: Broder’s story revealed a simple truth about electric cars: they’re not going to replace internal combustion cars any time soon. They’re just not ready for mass acceptance.
First of all, it took an hour to refuel at a “fast-charging” station. Not many people have that kind of time to spare.
And consider Tesla’s “range-maximization guidelines”: drive slower and turn down the heater. I once drove six hours to northern New England in the dead of winter with no heat. By the time I arrived, I couldn’t feel my toes.
On a bitterly cold morning – typical for winter in the Northeast – the fix is to “condition” the battery for 30 minutes to restore lost energy. I don’t even wait for my oven to preheat. Now I have to preheat my car?
And if you’re suffering from full-fledged range anxiety like Broder was, would assurances of a few extra miles of cushion help you feel better when the dashboard says your range is down to zero miles?
I’ll keep my gasoline-powered car for the time being.