Tesla says it lost “hundreds” of orders after New York Times controversy
arstechnica.com
arstechnica.com
Right now is a very crucial time for EVs and Tesla in particular when this popular impression is being formed. If nonsense like "Electric cars don't work in the cold" gains traction, it will be very bad for the industry. And if you think that quote sounds ridiculous, it is exactly the take-away a casual reader would have gotten from that NYT review. Remember, to this day a sizeable chunk of the population still believes Saddam was directly involved in 9/11.
So I say, Musk did the right thing - if you don't defend yourself, you might end up with nothing to defend.
Well, isn't that kind of true? Obviously, EVs work, but the cold weather has a large impact on batteries.
The lesson here is that EVs need to be treated differently to gasoline engines. Once those habits kick in, I'm sure we'll see a few in Siberia.
Misconceptions are quite harmful to progress.
The point here is the claim that EVs don't work in a cold climate, which is disingenuous at best.
What came up was two other hidden factors which were usually ignored (at least by one person - me).
The heater systems for the gasoline cars run on parasitic heating, so does the power brake vacuum generation.
Both need to be artificially generated for EVs, which busts the "slow brake" traffic MPG gain myth that the hybrids perpetuated.
I think you mean waste heat
This is distinct from things like A/C, which place a non-trivial amount of load on the engine even at idle, and often require things like a higher idle speed while engaged.
Everyone knows your gas consumption goes up during winter, so everyone just puts gas in more often. Everyone who lives in colder climates know to plug in the block heater otherwise your car won't be moving anywhere in the morning.
EVs have some great benefits, unfortunately they're not a silver buttlet and you still have to take care of them. You just take care of them in a different way than ICE cars.
Something like this would have done wonders, compared to the mess they created: "We are sorry that x writer had a bad...however we still believe that our car is ...... As always our engineers will keep working on improving the batteries even more and educating our users...
Customer: "Waiter, there's a fly in my soup."
Waiter: "But that's impossible, I've seen the recipe and fly is not an ingredient."
The biggest thing I've learned from serving customers is to approach complaints and challenges with the humility that hey, they just may be right. It is a mark of inexperience and immaturity to go on the offensive from the perspective of "stupid, bad customer, misunderstanding my product/service again."
(And I know that the reporter is not necessarily a customer, but as a reviewer, he represents their potential buying interests and should be treated as such.)
If I were the editor in chief of this publication, I'd definitely be investigating this to find out what happened. If what's been alleged turns out to be true, the reviewer is a POS and should be fired, blacklisted from the business of reviewing automobiles or any other products for that matter, and publicly called out for being a liar.
A journalist's sole contribution to society is his word. If that word becomes worthless, he needs to shift into a different line of work.
http://wheels.blogs.nytimes.com/2013/02/14/that-tesla-data-w...
Lies, damned lies, and statistics. The data pulled from the car indicated to Musk that the reviewer was sabotaging the review. The counterpoint was that all of the supposed instances of "fabrication" were either user error, Tesla's customer support error, or normal use.
For example, Musk claims that the author was deliberately driving in circle in a parking lot to run down the battery. The author claims he circled the parking lot a couple of times to find the unlit charging station in the dark (a claim since corroborated by third parties visiting the location).
> "If I were the editor in chief of this publication, I'd definitely be investigating this to find out what happened."
The NYT investigated this incident, and they found that the original author was imprecise in his notes, but that the claims against the vehicle were fair and accurate.
> "If what's been alleged turns out to be true, the reviewer is a POS and should be fired, blacklisted from the business of reviewing automobiles or any other products for that matter, and publicly called out for being a liar."
Unfortunately, most of the internet (HN included) were calling for all of the above without investigating the allegations.
I think more damage was done in this assertion than anything else in the whole drama with the exception of the flatbed. Here is Musk making a big point of travelling half a mile and raising the profile of a minor issue - making people think that half a mile is of considerable importance for the vehicle. 'It's not fair, he (slowly) drove half a mile to kill the battery' translates neatly into 'driving half a mile will kill the battery'
Personally I'm surprised that more wasn't made of the incredibly long time it takes to 'fuel' the car. Long trips are simply not an option if you've got to sit for an hour for them to rechange - at a 'supercharger', no less. And if the supercharger is in use, that becomes two hours. With such long wait periods, it is entirely normal for a person to think "well... maybe 45 minutes will do... or perhaps 30"
I'm just saying generally, if it is proven that a journalist intentionally manipulates a product review, that should probably be the end of his career. As I stated, a proper investigation is always important before any action is taken.
No, in fact several people who are prominent in the field of the use of data in journalism have written long essays on how this episode shows that data is subject to interpretation. It's very clear that Elon Musk looks at the data and sees one thing, and that the writer sees another; Those of us who have some degree of training in the field and little emotional attachment can look at the data and see that much of it is not particularly relevant to either story.
That said, the car reviewer was an idiot for not plugging the vehicle in overnight; although Tesla should have emphasized that in their instructional materials.
And Musk made his hole deeper with his whole "going for the throat" attitude. I mean, is that how he's going to react to a customer complaint?
Potential comedy gold though ...
Customer: Excuse me, I've had some minor problems with the windshield wipers, they stick a bit when ...
MUSK: I. WILL. DESTROYYYYY YOUUUUUUUU!!!!
A journalist's sole contribution to society is his word. Perhaps talk to a journalist some time.
Yes, journalism often involves research, editing, and countless other tasks, but the end product, is the writing that is produced as a result of those processes.
As far as holding a journalist to his word, I stand by it. If a journalist holds an opinion that is wrong or simply unpopular, that doesn't necessarily mean that he's untrustworthy, but if it's a grossly misinformed opinion, it might make him look like an idiot. I don't advocate firing a person for writing about an unpopular or wrong opinion, but if someone intentionally makes a false claim, it's definitely a consideration.
The sole contribution of the journalist is the value that the reader extracts from his writing. In the highly specific example of a person writing a product review, his ability to give an honest assessment of the product is obviously the most significant concern.
In a more general sense, honesty is extremely significant in nearly every sort of non-fictional publication. As you said, there are some cases where fact-checking is either unimportant, or outright impossible, I didn't mention it because that's the sort of thing that should be taken for granted.
This is overly idealistic. For example, journalists are quite adept at massaging public opinion for vested interests, often without the reader being aware that this is happening.
Exactly. And further to that point it's the golden rule. He who has the gold rules. The NYT has the audience and the ear of the public. That's the gold.
"mark of inexperience and immaturity"
The test for this of course if anyone after this experience would follow the same path as Musk did (Musk or someone simply knowing about this). If the answer is "no" then a lesson was learned which dovetails with "inexperience".
Tesla has lost money every year for the past four years, and lost $400 million in the most recent calendar year. NYT made $160mm in after tax profit last year.
NYT market cap is $1.3bn.
Tesla market cap is $3.9bn.
attention is gold, and gold is gold. perhaps tesla is trying to make sure they have an explanation for when they miss sales expectations - blame any sales shortfall on the NYT.
http://www.youtube.com/watch?v=-3fO_OHpyYw
Musk deserves all that he gets. He overplayed his position.
Maybe this was too early for a NYT treatment.
If it's too early for a NYT review then it's too early for anyone.
1. I didn't see any explicit signs pointing to the supercharger. Admittedly, the glare from the headlights could have obscured a couple of those, but at 25 seconds, there doesn't seem to be any reason for the driver to turn at that point.
2. It's completely unlit. The nearest lighting is on the other side of the parking lane. The gas pumps have plenty of light. That alone makes it hard to find, especially if you're not sure what you're looking for.
3. The car in the video had to make 2 specific turns to get to it. Again, the gas pumps are immediately in front of you, and have signs pointing to them.
For example, all of the coverage of on Iraq not having WMDs may have actually ended up strengthening associations between the two. Somehow the "not" gets lost for a portion of the population. (Similarly autism & vaccines, Obama & Kenya, and a million other myths.)
Here's an interesting paper about the phenomenon: http://www.psychologicalscience.org/index.php/publications/j...
It's a long paper, but this picture shows a list of ways you can help prevent spreading the myth when you refute it: http://psi.sagepub.com/content/13/3/106/F1.large.jpg
For example: Obama said multiple times and with multiple supporting documents that he was born in the US, yet I still encounter people that say that those were all fakes, and that Obama, his staff, and the media are trying to cover up the real story. When they are pointed to these facts they point back saying it's a conspiracy. In this situation first you have to prove that the people talking are not conspiring to deceive the listener, which is much harder to do than just to disprove a myth itself once a trusted source is doing so.
Edit: In terms of this contravercy, I was left with the impression that NYT did not act in good faith and neither did Tesla. I do not believe we will ever know exactly what happened since the circumstances were very specific. However, this definitely left a sour taste. The impression that I got is that Tesla will fight any negative press, whether it is objective and impartial or not, and they will fight dirty. For a moment do s/Tesla/Ford/g in everything you have read about this story and then ask yourself if you would still buy a Ford after that.
Musk didn't defend the biggest issue: The drop in charge and reported range at the overnight stop. He glossed over it completely, instead focusing on the .6 mile "circle."
A better example might be the hysterical fear of nuclear power that our country developed after Chernobyl.
I'm just a bit taken aback, because that's such a ridiculous and idiotic view to hold. It's almost as stupid as believing the holocaust didn't happen.
At the time of the war, as many as 70% (!) of Americans believed that Saddam was responsible for 9/11, and since then the number has slowly declined to the mid-20s (with a weird period where the number increased around 2007). For a falsehood that, as you say, is ridiculously unsupported.
http://usatoday30.usatoday.com/news/washington/2003-09-06-po...
http://rawstory.com/news/2007/Poll_41_of_Americans_believe_S...
http://www.cbsnews.com/2100-501863_162-3253552.html
http://themoderatevoice.com/121921/ten-years-later-belief-in...
http://en.wikipedia.org/wiki/Saddam_Hussein_and_al-Qaeda_lin...
The ridiculousness degree to which the American public grasped onto this false belief eventually led to the meme that 20% of Americans will believe any old thing. http://www.huffingtonpost.com/2010/08/24/one-in-five-america... And of course: http://www.theonion.com/articles/poll-1-in-5-americans-belie...
I could understand if average Americans thought that Saddam might have some minor relationship with Al Qaeda, but even that's a stretch. Saddam was barely a Muslim, let alone an extremist. As long as you didn't live in Fallujah, Iraq used to be one of the more religiously tolerant countries. The only reason the Iraqi flag had "Allahu Akbar" on it is because he wanted to gain the sympathy from his neighbors during the Gulf War.
I guess I'm just disappointed.
"Tesla expects to deliver 20,000 Model S cars this year. Right now, with its production line just getting into gear, it takes time for Tesla to fulfill its orders. As a result, there is a backlog of reservations.
"Tesla said 15,000 cars were reserved at the end of last year, below its expectation that it will deliver 20,000 cars this year. The company added 6,000 new reservations in the fourth quarter, which makes the 20,000 target look achievable.
"However, Tesla’s numbers suggest that a few thousand reservations were canceled in the fourth quarter. (Update: The Tesla spokeswoman Shanna Hendriks later said the company had 1,500 cancellations in the fourth quarter). Many customers were in line but pulled out when it became time to make a substantial down payment in cash."
http://dealbook.nytimes.com/2013/02/20/teslas-earnings-indic...
Investors looking at basic customer appeal issues like that seem to think that Tesla Motors stock may not have as much upside as it appeared to have before the fourth quarter financial results were announced.
I'm not sure from the article, but it sounds as though Tesla had 15,000 2013 orders by Q3 2012. Then, during Q4 2012, they added 6,000 orders for 2013, and had 1500 people unable to pay their 2013 down payment, which would leave their 2013 orders at 19,500. This is 500 cars short of Tesla's projected 20,000. If these 500 were all Roadsters, wouldn't the projected 2013 sales shortfall be around $5 million?
It's odd that they report so many people placing orders, then balking at the down payment. It's an odd item to be reporting, I don't know if other auto manufacturers report this. Maybe they should require the down payment at an earlier point in their checkout process, to remove these superfluous tire-kickers from the corporate statistics? It's got to be embarrassing to announce that ~8% of your customers decided to cancel at the last moment.
Isn't this normal in that business? People back out of car purchases all the time. Cold feet, financing falls through, better deal elsewhere, etc. I don't know what percentage is business as usual, but 8% doesn't seem high.
I do agree that it's an odd thing to report.
That's because it's the dealers who handle down payments for most auto manufacturers (in North America, at least). There's an arm's length relationship between the dealers and manufacturers. Tesla sells its own cars and would therefore have direct access to this data.
I could be wrong, but if those include people who just put down $5k to hold their spot in line years before the car was released, then 8% isn't surprising at all.
I know at least one person who decided not to go through with the purchase for reasons that have nothing to do with Tesla or the ability to pay the down payment.
But in that article, they mention 1500 cancellations, while Musk is only attributing "a few hundred" to the NYT article. That makes it sound like he's compensating for the baseline cancellations they were having at the time.
The NYT article did highlight a major problem with electric vehicles: when you get the batteries really cold, their reported charge can be non-reflective of their actual range.
I never leave my Jeep overnight and wake up to seeing the gas gauge report only half of what is actually in the tank. If this was a thing that was possible, Jeep would be back to their drawing boards figuring out how to fix it, not chiding a reporter for pointing it out.
I hope everybody following this read the NYT reporter's response: http://wheels.blogs.nytimes.com/2013/02/14/that-tesla-data-w...
The difference between the two situations is the number of places that you can refill the tank. Diesel drivers (in the US), have similar concerns to the electric car driver.
Diesel, AFAIK, is better of in the sense that you can drive farther without refilling.
Also, for both petrol and diesel, customers can somewhat reliably estimate how far a tank will carry them. Part of that is experience, but for now, I have the impression that Tesla, with all its electronics, cannot even break even with 'normal' cars at that single measure.
They are working hard on refill speed and refill locations and I expect they are working hard on their battery control systems to improve remaining range estimates. I think they need all three to create a viable mass market product.
Diesel drivers have the advantage of their fuel being quite portable once you've found a source. The energy input required to move a diesel truck 100mi. is still pretty portable if you get a ride, no tow required.
An EV has to be _moved_ to a charging source; it's very hard to bring energy to the EV in the quality/quantities required.
Cold weather pilots never let their aircraft sit outside for too long if they intend to fly within the hour since the fuel starts to gel. They plug in to the hanger if a power source is available or keep the engines running (although that's rather expensive these days). That doesn't mean those aircraft are in any way inferior to their warm weather counterparts.
The system is fundamentally different. Different is not inferior. Different means it can't be treated the same way as a fossil fueled vehicle.
FYI... The batteries do have heaters to improve efficiency, however that too drains power so a glance at the manual (and some common sense) would have told him to leave it plugged in. A bit like having to run a diesel engine a bit to make sure the fuel won't turn to gel in the lines.
I'm not sure if deliberately sabotaged the test drive, but I do think there's some driver naivety (negligence?) at play.
My point is that EVs take a different type of preparation than fossil fuel engines and it's neither fair nor productive to expect them to behave 100% identically. But it seems a lot of people are deliberately missing that point for some reason and focusing on the fact I brought up aircraft.
We are not talking about small differences in use, what is not being disputed is the large drop in range from parking overnight in cold weather. This is a big deal to northern climate folks. This is not a characteristic of gas or diesel.
Going further, I fully charge at home, leave for work, work a longer than average day, then get in my car to go home. Cold isn't only at night. I can see problems and I'm only commuting 40 miles to work (almost all highway).
So a Tesla can fly, eh?
Look, I'm getting tired of explaining this over and over to people who are deliberately being obtuse, but the whole point of bringing up aircraft was to illustrate that different types of fuel require different care, especially in cold weather. And with that care, those engines are able to function in cold weather just fine. This was the refutation of the ridiculous assertion made above that "EVs don't work in cold weather".
Regardless of fossil fuel or electric, cold weather requires additional preparation and planning to get to a destination in whatever type of vehicle you choose... As many people who've had trouble starting their ordinary gasoline car after a frosty morning would attest to.
I wish I never made the original post.
That's it. I'm done.
In the case of the EV, it's leaving it plugged in and in the case of ice, it's adding de-icer to the fuel. You just care for it differently. Arguably the EV still is a slight advantage since traditional engines still need to be warmed first whereas the EV can just start and go as long as it was plugged in overnight since the heater pads on the batteries will make sure it won't drain too quickly. Can't keep a fossile fuel engine running all night like that.
> "We did actually get a lot of cancellations as a result of The New York Times article. It probably affected us to the tune of tens of millions, to the order of $100 million, so it's not trivial,” Elon Musk, the chief executive, said on Monday.
“I would say that refers more to the valuation of the company. It wasn't as though there were 1,000 cancellations just due to The New York Times article. There were probably a few hundred."
"Probably" a few hundred? Can't he be certain how many car orders have been canceled? And in what time period, and how long of time period, did these cancellations take place? And how does this rate compare to other periods in time? And if he's going to claim that the impact was non-trivial, then why leave so much fuzziness in the interpretation of how much was lost in direct car sales and how much through a loss of valuation?
The use of data, as it did in his rebuttal to the NYT, would help his case here. But in this interview he sounds like someone just throwing out rumors he heard from someone in the finance department.
Also, there is probably a feeling that some would-be orders were not placed because of the article. Quite hard to quantify that.
To reach $100 million in canceled sales, 1000 Roadster orders or 2000 Model S orders would have to be cancelled.
If a few hundred meant 300 cancelled orders, then their losses would be limited to between $15-30 million.
So the 2 sentences reflect a disparity of at least 700 cars. I wonder if someone is trying to confuse the 1500 cancellations in Q4 with the cancellations caused by the NYT article. 1500 cancellations would represent around $100 million in cancelled sales, and this was announced at about the same time as the NYT article.
http://www.teslamotors.com/models/options
There's also tons of up sell items and tesla is discounting all the listed prices by the $7500 tax credit you are entitled to for buying an EV.
Like tokenadult comments, some cancellations occurred before the NYT article.
In any sort of 'high dollar' purchase like this there is a certain percentage of buyers who, after time, get cold feet. There are also people who clearly speculated that having a spot in line with a reservation could be arbitraged for a quick gain.
People who run businesses are quite careful to distinguish between the 'sales funnel' and 'sale commitments' and 'booked sales.'
As more and more cars get out there, there will be a more likely chance of 'knowing' someone who has one (within a degree or two of separation) and so a more durable 'consensus' of whether or not they are worth the expense will surface. I wouldn't panic as long as their book to bill ratio is > 1.0 but once they catch up, things will get interesting.
https://twitter.com/edmunds_test/status/306067589589774336
The Twitter conversation is ... interesting!
BSOD in an electric car, what will Musk say this time?
The thread says that pressing both the steering buttons reboots the software(Read: The whole car).
This is purely WTF!
I think like motorcycles of yesterday electric vehicles need a reserve, something that does not register in range calculations. Something that lets you heat or cool the cabin, something that gets you by that oops moment, detour, or just bad luck. That and better software for representing range and to top that off, forcing the car's dynamics to always favor range and make people choose otherwise.
The current breed of cars favors the enthusiast, the problem is that they aren't the only ones with money to buy.
They do have a reserve. The reserve doesn't figure into range calculations. You can heat or cool the cabin. You can have an oops moment, you can have a detour.
What you can't do is allow the car to discharge, then give it much less charge than is needed for your journey, and then ignore the obvious warnings ("You want to drive over 60 miles. You only have enough charge for 30 miles. A good idea to keep charging.") and drive away knowing that you don't have enough energy to get to your destination.
Huh, he's talking about HIS OWN QUOTE about "hundreds of millions lost", he has to GUESS what he himself meant? He doesn't know _exactly_ what he meant when he said they were "affected" "to the tune of tens of millions, to the order of $100 million." He has to hazard a guess "I would say that refers mostly" about his own quote?
I guess he did say "probably" in the first place. Yes, he's just making shit up.
The more he goes, the less trustworthy he seems.
I will say that anyone who cancels an order for a bleeding-edge car based on an article like this is a moron. You, more than likely, don't want such a person as a customer. They'll bitch and complain about anything and everything and be nothing but collective pains in the ass.
I've been in complex hardware manufacturing before and I can say that, almost without fail, the customers who would flip on you based on forum posts, hearsay or such articles/reviews are a total waste of your time. They were just looking for a reason not to buy and found it. Good riddance.
How can an article that is NOT the result of a rigorous scientific evaluation process be used for anything other than entertainment is beyond me. At best one could call it a potentially interesting "unverified data point" and move on.
Furthermore, the factory they run to build the entire thing is just incredible (http://www.youtube.com/watch?v=qvPosSzUGVI).
I used the recent 10% drop to significantly add to my TSLA position. Please - continue doubting TSLA, shorting it and selling the stock - you're doing me, and other TSLA investors a great favour.
I always hate it when prices on stocks I want go up - it means I can't buy anymore :(
Well, only if it's good PR. Because if a CEO would rather tell the truth and suffer negative consequences because of it... they're not really qualified to be CEO then.
When you're running a company with investors' money, you'd better be more mature and intelligent about things than worrying about who's "right" and "suffer the consequences". Because you don't come across as professional, you risk coming across as unhinged.
and herein lies the problem with Corporate America
I'd buy that stock.
There may be an issue with that particular car, the journalist could be bias or the battery may just not perform well in cold weather. It’s hard to tell without additional testing.
I don’t see why all the focus is on who said what. Just re-run the test a few times to try to repro. That’s what I’d do if someone had an issue with a piece of code I’d written.
Charge your car faster than you can fill it with gas? Yes please ;-)
But, as for cold, Tesla apparently have lots of Scandinavian customers who live in very cold places and they seem to do okay. I have no idea how to say "My car died in the cold" in any of the Scandinavian languages, so I can't search for reviews.
This also backfired on Musk, IMO, as more potential buyers learned about Tesla's weak points.
Tesla goes straight for the jugular, and considering I'm a nobody I don't know what they would do to my reputation online, because of my 5 min of unwanted fame.
Still too expensive for me for a depreciating asset, but I now think the S far less toy and far more reasonable car that's not so great for road trips, but CAN do it.