Tesla CEO Fires Back at NY Times Review of Model S

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Published February 13, 2013

| FOXBusiness

Investors were fleeing Tesla (TSLA) stock earlier this week in response to a critical review of its new Model S sedan. Now the company is firing back to defend the Model S and its line of electric vehicles.

The New York Times published a review over the weekend that detailed the writer’s difficulties in making a trip from Washington, D.C., to New York. It perhaps struck a chord with investors who are concerned that Tesla’s electric vehicles won’t gain widespread adoption until fast charging stations become more common.

The review also trumpeted the biggest concern among consumers—that electric cars may not be worth the trouble for long-distance trips.

When plugged into a household electrical socket, a Tesla car will gain only five miles of driving range for every hour of charging. Tesla covers the cost of charging its cars at one of the company’s Supercharger stations, which will provide enough power for 150 miles of driving in 30 minutes. The vehicle option required to use these stations costs an additional $2,000.

Jefferies (JEF) came to the defense of Tesla, issuing a research note earlier this week that indicated the issues published by the newspaper were likely a result of “improper charging protocol.” The note also suggested the majority of Model S users have been “very impressed.”

Jefferies raised its price target for Tesla stock to between $36 and $45, reaffirming a buy rating and expectations of in-line earnings. Model S delivery times are narrowing, the research note added, and the company’s focus will be on securing new reservations.

The stock sunk on the negative review and some confusion Monday over Tesla’s earnings release date. Shares fell 2% on Monday and 1.38% a day later, recovering a bit Wednesday to settle at $38.45 a share.

John Broder, the New York Times reviewer, planned to drive a Model S from the nation’s capital to a charging station in Newark, Del., and then another 200 miles to a station in Miford, Conn. His car, which was provided by the company, had an 85 kilowatt-hour battery and an estimated range of 265 miles on a full charge, based on its rating from the Environmental Protection Agency. Under ideal conditions, Tesla estimates that the car could travel up to 300 miles.

The report reflected poorly on the performance of the Model S, which lost available miles remaining quicker than the miles Broder traveled. The car’s battery also lost two-thirds of its charge over a cold night. Broder eventually had to call a tow truck when the car shut down, and the car’s parking brake wouldn’t disengage without power.

Tesla has said that extreme cold weather can push a car’s range down by 10%.

Broder concluded that the cold weather and other factors, such as using the car’s climate control, drained the battery much more than expected.

But here’s the twist: Tesla claims to have data that refutes the writer’s claims.

Tesla chief executive Elon Musk took to Twitter to defend the Model S, referring to the review as a “hit piece.” He also said the company provided suggestions for best results and claimed Broder ignored those suggestions.

“I think this was a deliberate attempt to gain a picture of the Model S being put on a flatbed truck,” Musk said in an interview with FOX Business’ Melissa Francis.

Musk, also the co-founder of PayPal, said data retrieved from the vehicle’s logs prove that Border did not fully charge the battery and took a long detour before the car broke down. He added that Broder drove faster than the speed limit and had the heat at 74 degrees.

The company advised Broder that the car needed to be charged at 40% for the final leg of the journey, during which the car shut down, but Broder began the trip at 28% and drove past several public charging stations, according to Musk.

The option to turn on data logging is off by default, but since a much-publicized incident involving BBC’s Top Gear program, the company activates the service on cars given to media.

Broder noted in his article that he made calls to the company seeking advice on multiple occasions. On Twitter, Musk wrote that the company “called to inquire why he was blatantly ignoring our advice. It was like he had no desire for a good outcome.”

He promised a company blog post to detail “what actually happened on Broder’s [New York Times] ‘range test.’ ” Musk later posted a photo of data logs from a previous Times review that resulted in a test range of 300 miles.

During the interview on FBN, Musk suggested that the Times, which said the review was accurate, should investigate the matter. As for motive, Musk said the press has reacted positively to the Model S, and writing an article that reaffirms those sentiments would not get attention.

Motor Trend magazine did name the Model S its “Car of the Year” for 2013. Tesla’s base Model S, the first car designed by the company from scratch, costs just under $60,000. Deliveries of the Model S began in June 2012.

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