Elon Musk Takes The Wheel

Tesla Model S

Several years ago I agreed to have breakfast with a soon-to-be former senior executive of the nascent Tesla Motors Inc.. The employee chose to leave the then-struggling company whose chairman, he insisted, was not publicly forthright in divulging the company’s shortcomings. He told me that the sales projections weren’t all they were promoted to be, and there were other ethical lapses.

Flash forward to more recent times, and the electric automaker’s prospects couldn’t be rosier, until, of course, last week when a viral video of a Tesla Model S in flames literally caught fire online. Some insisted that the flames were fanned by the oil-driven automakers, but I found no evidence to support this allegation.

Elon Musk

Leading up to what may be a short-lived hiccup for the high-flying company and its brilliant and enigmatic founder Elon Musk, few automakers have garnered the kind of praise that Tesla has. Consumer Reports, the bane of consumer product marketers everywhere, gave the automaker its highest rating in the organization’s history. It wrote in July:

“Slipping behind the wheel of the Tesla Model S is like crossing into a promising zero-emissions future. This electric luxury sports car, built by a small automaker based in Palo Alto, Calif., is brimming with innovation, delivers world-class performance, and is interwoven throughout with impressive attention to detail. It’s what Marty McFly might have brought back in place of his DeLorean in  “Back to the Future.” The sum total of that effort has earned the Model S the highest score in our Ratings: 99 out of  100.”

A month later, the National Highway Safety Administration (NHTSA), gave the Tesla Model S its highest safety rating…ever.  Clarence Ditlow, director of the Center for Auto Safety, an independent advocacy organization, noted:

“Tesla has thrown down the challenge to the industry as a whole. We are a new company and we beat everybody,” Ditlow said. “All the other automakers need to accept Tesla’s challenge and do as well or better as Tesla in NHTSA’s crash test ratings.”

Between Consumer Reports and NHTSA, what more could an automaker want? How about these headlines?

• “A Nervous GM Is Spying on the Tesla Playbook”

•  “Tesla Electric Cars Offered by Hertz at Two Airports” 

• “Tesla’s Suddenly the #1 Car in Norway”

Then, without warning, the “Tesla on fire” meme hit…big time. Here’s a clip of the 30-second video, which just passed 3 million views:

• ABC News asked: “Will YouTube Video of Seattle Car Fire Halt Tesla’s (TSLA) Meteoric Rise?”

• USA Today reported “Tesla stock burned by car fire video, downgrade” 

• The Economist’s Schumpeter blog even weighed with “The fire this time”

To his credit, Mr. Musk took to the Tesla corporate blog to transparently lay out the specific technical reasons that his team believes caused this fire. On Friday, he wrote:

“Earlier this week, a Model S traveling at highway speed struck a large metal object, causing significant damage to the vehicle. A curved section that fell off a semi-trailer was recovered from the roadway near where the accident occurred and, according to the road crew that was on the scene, appears to be the culprit. The geometry of the object caused a powerful lever action as it went under the car, punching upward and impaling the Model S with a peak force on the order of 25 tons. Only a force of this magnitude would be strong enough to punch a 3 inch diameter hole through the quarter inch armor plate protecting the base of the vehicle.”

The reaction to his forthrightness was unanimously positive.

• TechCrunch wrote: “Elon Musk Details Cause Of Tesla Model S Fire, Says It Would Have Been Worse With Gas” 

• CNBC touted: “Elon Musk’s blog post on Tesla Model S fire” 

• And even Reddit weighed in with its consumer-driven dialogue titled “This is how you handle a potential PR disaster. With complete transparency and boatloads of hard work to back it up,” which also lit up Tesla’s Redditt page.

It’s not the first time that Mr. Musk has used his corporate pulpit to silence the naysayers. Remember, that nasty review from The New York Times, which the Tesda founder subsequently called “a low grade ethics violation.?” He again turned to the company’s blog to dispute point-by-point the negative review. He supplemented that with some mainstream interviews to drive the message home, including one on Bloomberg West with Emily Chang.

As I think about the early days of Tesla, at least how it was portrayed to me from a recently resigned executive, I would have to say that the company has come a long way in its dealing with thorny issues. What’s more, it’s refreshing to see this CEO-founder so passionately and so openly take the lead, which bodes well for the company’s road ahead.