Tesla’s Love-Hate Relationship With the Media Makes No Sense — The Motley Fool

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Electric-car maker Tesla (NASDAQ:TSLA) has moderately blended emotions concerning the media. The firm is all too completely satisfied to tout constructive protection and product opinions, solely to show round and chastise something remotely unfavorable. Much just like the president dismisses important tales as “fake news,” Tesla typically calls unhealthy press “misleading.”

Consider the episode final month, when Tesla attacked Consumer Reports for predicting that the forthcoming Model three would have “average reliability,” which in itself just isn’t a nasty prediction. Tesla fired again. “Consumer Reports has not but pushed a Model three, not to mention do they know something substantial about how the Model three was designed and engineered,” a Tesla spokeswoman instructed quite a few shops. “Time and time once more, our personal knowledge exhibits that Consumer Reports‘ automotive reporting is constantly inaccurate and deceptive to customers.” Presumably, Consumer Reports‘ prior, extra constructive badessments of Tesla merchandise usually are not deceptive.

Top view of a red Model 3

Consumer Reports expects Model three to have “average reliability.” Image supply: Tesla.

That’s only one instance, and never even the newest one.

Shame!

Another telling occasion got here simply this month, when CEO Elon Musk reprimanded the media for overlaying mbad firings at Tesla. On the earnings name, Musk did affirm that the firings impacted roughly 700 staff, or 2% of the workforce, however there’s nonetheless appreciable controversy surrounding the firings, as some have speculated that Tesla was retaliating towards pro-union staff which were attempting to prepare Tesla’s Fremont manufacturing facility for fairly a while.

Still, Musk couldn’t have been extra blunt (emphasis added):

The different factor I need to point out is that there are lots of articles about Tesla firing staff and shedding some traces and stuff. These are actually ridiculous. And like anybody — any journalist who’d written articles on this impact must be ashamed of themselves for missing journalistic integrity. At each firm on this planet, there’s annual efficiency opinions.

Here’s the factor: If your organization goes to obtain a disproportionate quantity of media protection, it cuts each methods.

Pros and cons

To be clear, buyers have to acknowledge that Tesla completely advantages from its media protection. Despite ongoing construct high quality points that by some means nonetheless persist to this present day, Tesla automobiles symbolize a major development in automotive design by way of /software program/companies integration.

Other automakers can simply replicate the underlying propulsion expertise, however the broader auto trade stays closely fragmented and entrenched. I as soon as requested Musk if Tesla might enhance manufacturing () sooner than legacy automakers might enhance integration of software program, companies, and distribution (having to undergo franchised sellers), or if rivals might even achieve this. “It’s not within their power,” Musk replied.

Model X outside of a service center

Integrating gross sales and repair has its benefits for customers. Image supply: Tesla.

The hype round Tesla automobiles has pushed investor sentiment for years, and that investor sentiment in flip drives up share costs and permits Tesla to conduct capital raises at extremely favorable phrases, the newest of which occurred earlier this yr. Secondary choices are priced based mostly on market costs, and Tesla wants appreciable quantities of capital to fund its manufacturing ramps and the enlargement of help infrastructure like service facilities, shops, and Superchargers. The firm additionally performed a junk bond providing in August.

Tesla remains to be my largest holding, even after I lately offered some shares in an effort to rebalance my portfolio. Still, Tesla must recover from its infantile method to the media and settle for that amplified protection and a focus has each ups and downs. Besides, the corporate has way more essential issues to deal with.

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