Less News is Bad News for Tesla Motors

Last week, Tesla Motors announced another delay in the delivery of its all-electric sports car. In a letter to customers, interim CEO Michael Marks announced that the Tesla Roadster will now ship in 2008, with the first 50 vehicles arriving during the first quarter and another 600 units during the remainder of the year. Originally Tesla had planned to release the Roadster this summer, then pushed the launch to the fall. To balance the bad news, Marks also announced that the Roadster’s range was back up in the neighborhood of 250-miles-per-charge. Earlier this year, then-CEO Martin Eberhard had revised the Roadster’s expected range downward from 250 miles to roughly 200.
When you’re an electric vehicle company that hasn’t yet delivered an electric vehicle, all you have is your credibility. EV manufacturers like Zap! lost theirs long ago, but Tesla is different, primarily because the company has been unusually transparent about its development process and longer-term plans. Eberhard’s range revision last spring is a good example. In it, he did what few technology executives ever do: he publicly acknowledged that his product would not work as initially-promised, explained the issues, and took responsibility.
But recently Tesla has seemed less forthcoming. Last month, Eberhard was hastily replaced as CEO, a move that hinted at potential problems in the Roadster’s development process. Tesla attempted to put the best face on the management change, but it’s still not clear why the company chose to install a interim CEO rather than waiting until a permanent candidate was available. Nor is it clear why Tesla is now pushing the Roadster’s launch to 2008. Marks’ letter offered few details, focusing instead on range improvements and other “positive developments” in a way that seemed to divert readers away from the fact that the car will not ship on time.
Few people are able to afford a $100,000 electric sports car, but many believe strongly in the promise of electric vehicles. Tesla has become a symbol of that promise partly because the company made us feel like insiders (even co-conspirators) in the EV game. Past communication from the company’s execs and employees was so frank and detailed, it was hard to dismiss their claims. Until the company puts production vehicles on the road, Tesla’s biggest challenge could be to maintain open and honest disclosure about what’s going well—and what challenges remain.
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Darryl Siry
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Gerald Shields
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Robert Freeman
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Insider
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The Other Martin (not Eberhard
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Outsider
