Tesla team mulls plan to boost image after New York Times review

LOS ANGELES Mon Feb 25, 2013 7:49pm EST

Elon Musk, co-founder of SpaceX and Tesla Motors, speaks at the California Institute of Technology commencement ceremony in Pasadena, California June 15, 2012. REUTERS/Phil McCarten

Elon Musk, co-founder of SpaceX and Tesla Motors, speaks at the California Institute of Technology commencement ceremony in Pasadena, California June 15, 2012.

Credit: Reuters/Phil McCarten

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LOS ANGELES (Reuters) - Tesla Motors Inc's top brass, including Chief Executive Elon Musk, this week are considering a strategy to recoup market value and boost demand after a critical review of the automaker's Model S sedan in New York Times this month.

Musk says that Tesla has lost about $100 million in sales and canceled orders due to the Times story, which said the sedan ran out of battery power sooner than promised during a chilly winter test drive from Washington D.C. to Boston.

"We have seen a few hundred cancellations that are due to the NYT piece and slightly lowered demand in the U.S. Northeast region," Musk told Reuters in an email.

To lose $100 million in car sales, assuming a $100,000 price per vehicle, Tesla would have to sell 1,000 fewer cars than expected.

Since the Times' February 8 story, by reporter John Broder, Tesla shares have fallen 13 percent, while the S&P 500 index has slid 1.4 percent. Between $100 million and $200 million of Tesla's drop in market value was due to the Times article, Musk said.

"The Tesla team and I are brainstorming this week how to correct the misperception that they have created in the market about how well our car performs in cold weather," he wrote. "That too, will take money and time."

The Model S is the company's second electric vehicle, after the two-passenger Roadster sports car. The Model S, which went into production last June, starts at nearly $60,000 before a federal tax credit, with stickers ranging to more than $105,000.

Its success is crucial for Tesla, which is looking to turn an adjusted profit in the first quarter - the company's first since going public in 2010.

Musk lambasted the Times' review of the Model S, calling the test a "fake" on Twitter and producing data logs from that vehicle to disprove the article.

Broder in a Times story dated February 12 denied that he had faked anything.

Times Public Editor Margaret Sullivan said Broder took "casual and imprecise notes" of his test drive and did not exercise good judgment, but noted that vehicle data logs reproduced by Musk on Tesla's website were "sometimes quite misleading."

Sullivan concluded that "there is still plenty to argue about and few conclusions that are unassailable."

(Additional reporting By Deepa Seetharaman in Detroit)

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Comments (3)
Bryansix wrote:
What is indisputable is that Broder set out to make the car look like a failure and during his attempt he did not fully charge the battery between stops. Nobody in their right mind would do that. 99% of the time these cars will be used on commutes which means they get charged every night.

Feb 25, 2013 8:51pm EST  --  Report as abuse
CentaurZ wrote:
Musk did not say that Tesla lost $100 million in sales due to the Times article. He said that Tesla stock lost $100 million dollars in market capitalization due to the Times. This seems to be due to a misunderstanding of a Bloomberg interview with Musk broadcast this morning. At first the interviewer assumed that Musk was referring to sales. When he realized this, he made it clear that he was referring to the value of the company’s stock. This Reuters is another example of the news media mangling a person’s words and drawing incorrect conclusions.

Feb 25, 2013 11:12pm EST  --  Report as abuse
brotherkenny4 wrote:
Broder lied. Great job there, NYT. Your reporters lie just like everyone elses.

Feb 26, 2013 11:38am EST  --  Report as abuse
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