Tesla looks to rebound from scathing New York Times review
LOS ANGELES - 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."