Leaning on Elon as Controversial Tweets Hurt Image
When the general public gives Elon Musk any thought, it’s usually because they saw him on a “Big Bang” TV show episode or voicing himself on “The Simpsons.” Some folks know he runs a space endeavor called Space X, which put a Tesla in space orbiting the earth one year ago. Others know he has been the driving magic behind Tesla Motor Company.
However, the road he has traveled in the past 3 years has been anything but magical. The amount and type of headlines Musk generated were not all beneficial to the company’s image. Some odd Tweets, along with picked fights and rude comments he shared with the world tarnished his previously sterling reputation. WIRED magazine put Musk on its cover this month for topping tech news in 2018 with his controversial behavior, with the headline, “Dr. Elon and Mr. Musk: Life Inside Tesla’s Production Hell.”
A large part of 2017 was extremely taxing and expensive for Musk and his companies. Many thought he was having a meltdown over the lack of production of the Model 3. Tesla fell behind production targets by 6 months or more. Then Musk revealed he had gone through a month of severe depression before having a burst of optimism and stamina. Along with a huge fine to the SEC over a stock tweet about taking Tesla private, the company lost $1.5 billion in the first nine months of 2018. Musk worked the assembly line days on end, sleeping at the factory. It paid off. But it didn’t come easy, and it still is no cakewalk for Musk. January was a dark month for sales of the Tesla Model 3.
According to InsideEVs, Tesla sold 6,500 Model 3s in January of 2019. Compare that to sales of 25,000 the previous month. A reduced government rebate subsidy and bad publicity caused quite a dip, to be sure.
But as recently as 11:05 am, February 5th, 2019, Musk tweeted again:
Model 3 starting cost now ~$35k (after ~$8k of credits & fuel savings) http://Tesla.com
It didn’t take but a few minutes for people in the Twittersphere to respond, including Michael Hiltzik of the LA Times who wrote:
It’s incorrect to imply that the list price of any Model 3 is now only $35,000.
As it happens, Musk and Tesla weren’t really claiming that anyone could buy a Model 3 for $35,000. That figure is their calculation of the cost to a buyer after two factors are netted out. One is the federal government rebate, which is now $3,750 per Tesla vehicle. That’s legitimate to include in the price calculation, since it’s paid directly to the buyer.
The other factor is much more dubious. Tesla calls it “gas savings”— in other words, its judgment of how much less the buyer will spend on gasoline during the putative six-year life of the Tesla, compared with a standard gas-fueled car.
Hiltzik went on to explain, Musk defended his claim of a $35,000 cost, also via Twitter, by observing that “both prices [i.e., before and after incentives and gas savings] are shown right next to each other & lower price is *actually* the real apples to apple cost vs a fuel car.”
Yet there’s a big difference between “price” and “cost,” and also between “price” and “value.” The $35,000 is the cost of ownership, or the value to the customer — not the price, which Tesla lists as $42,900 for the entry-level, midrange, rear-wheel-drive Model 3. (That’s the price after the $1,100 cut.)
Although it might be some creative marketing on Musk’s part, the sales in Europe and China remains upbeat, producing real hope in the workers and the Board of Directors at Tesla.
read more at latimes.com