Less News is Bad News for Tesla Motors

Tesla Roadster in the Dark

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

    As the person primarily responsible for public communication at Tesla, I would like to offer a different perspective. In one notable way, have actually taken our transparency with customers up a notch by inviting our customers to drive one of our latest prototypes as part of our durability testing. There is no better way to share the latest details with customers than to invite them into the process. So far over 40 customers have driven the car and the number increases every week. True, this activity may not be obvious to the public (although it is described in blog posts by our customers on our site) but at this point in the program working with our customers takes a higher priority than publicity or promotion. Our customers are also sharing their experiences with each other on a members-only part of our website, where they are sharing the details of their rides – good and bad.

    The work that is being done now is a broad range of activity related to durability, testing/validation, refinement and supply chain readiness. We need more time to make sure the cars we put into our customers hands are reliable and durable. It really is that simple.

    One other thing that might contribute to the perception that we are not being as open as we used to be is that with all of the engineers heads down and working hard on the final steps before production, I have pulled back from the vast majority of media opportunities that used to take up some of the time of our engineers and executives. As a result, we have participated in fewer public forums, interviews and events. This is the right thing to do right now. I look forward to the near future when we are able to re-engage more fully in these types of activities.

    In the meantime, I’ll just spend my Saturday nights posting on blogs and watching rainy Formula One races.

  • Gerald Shields

    I don’t care about the Roadster though it’s clear the Roadster needs to sell. Telsa must ship this car and stop backtracking the date! What about its promises concerning Whitestar?

  • Robert Freeman

    While we can all dream about owning a Roadster the vast majority of us are waiting on a viable middle class vehicle. Frankly Whitestar is our ‘great white hope’… unless of course Phoenix beats you to the punch. At this point I’m so sick of waiting I will buy the first decent electric available… can Tesla represent?

  • mal

    Given that you can’t even be bothered to read the Tesla blogs to discover that the range has now been confirmed at 245 miles, why on earth are you calling for the company to waste time keeping you even more (mis) informed?

    http://www.teslamotors.com/blog4/?p=60

  • Insider

    Any one that has real experience in the auto industry knows that building a prototype is a joke compared to launching a reliable production vehicle. Just look at their team, no one with REAL product development and execution experince in the auto industry. Why because they think that can do it better. Just read all the of Elon Musk’s comments on his blog from last year. Notice that he hasn’t been flapping his jaw lately. Tesla is the second example of where he and his companies overpromise and way underdeliver. SpaceX is example #1. This is what happens when you have naieve VCs and inexperienced people. The primary goal of Tesla is to IPO and for all of these guys to cash out. The only thing stopping them is competent management. Look at all the turn over in their senior mgt team. Look at how many positions are unfilled and have been open for the past 11 months. Those of us that have the requsite experience know better than to go to this particular startup that doesn’t have the humility to listen to people who know better. What else would possess any company to put out a press release saying that they will begin delivering full production vehicles to customers less than 1 year from building their first and only prototype? http://www.teslamotors.com/media/press_room.php?id=224
    Only celebrities and people that own 5 other cars would do something like that. I’ve worked for Toyota and 2 of the Big 3, and none of them can do that because, as Tesla is now figuring out, vehicle development and manufacuring ramp up is not for rookies. Eberhard was a clown, talk is cheap, results do matter. The VC’s pushed him out, if they were any smarter they would have canned him a year ago. Wrong person for the job. I’m all for electric cars and the roadster looks great. I have years of experience with electric and hybrid vehicles but right now Tesla still doesn’t not have what it takes to be a real player. I can tell you right now the 220 customers that were promised a 2007 Tesla Roadster won’t have their cars until May 2008 at the earliest, although there will be a couple of deliveries so that Tesla can keep the hype up. The other 300+ that have placed orders don’t know any better. I talked to alot of them at Pebble Beach this year. At least the customers who have been demanding their car or deposit returned are letting those in the back of the order line move up. Are the VC’s pissed? You bet. If there really was postitive information to report, Siry and co. would be yapping up a storm. But the facts always rule. The transmission issue and durabilty issues are just the 2 of the 200 other significant customer issues that must be resolved.

  • MAT

    The overall poor attitude, skepticism & cynicism offered up by Insider are so telling. The holier than thou, know it all, it can’t be done, attitude, from the person who has “worked for Toyota and 2 of the Big 3,” clearly demonstrates why companies like that can’t get this kind of thing done. His (or her) rants of, founders just wanting to cash out in an IPO are absurd. None of these guys need any more money. Anyone who has a Tesla on order certainly isn’t thrilled with the delay(s), but if so many people were canceling, then the rest would all be moving up in the delivery schedule. So far, that’s not happening. You may be an “insider,” but please do us all a favor and keep your negative can’t do attitude away from Tesla. You may be a perfect employee for the main stream auto club, but no “insider” need apply for any position in San Carlos. Cockiness and pessimism won’t bring this vehicle to market. Vision, faith, perseverance, (and yes) a little more time, will.

  • The Other Martin (not Eberhard

    The Enron experience was quite disturbing – it was a gung-ho company that convinced its employees to buy in to the Enron faith, while its executives destroyed it from the inside. So it’s possible that Insider’s negative perspective is accurate. But I certainly hope he is wrong.

    I’m not a car guy; I’m a transportation guy – over twenty years as a transportation engineer with a state department of transportation. I don’t believe the majority of people in the U.S. are willing to live in densely packed urban areas and rely solely or mostly on public transportation. Most of us want our own vehicle to drive, and that’s the case around the world as living standards improve.

    So I sincerely hope Tesla Motors can pull it off. I was amazed to read on one of the blogs recently that Martin Eberhard came up with the electric car idea and approached Elon Musk in 2004, with a startup automotive company as a result. That’s yesterday in terms of developing something as complex as a new electric car. So they probably did attempt to go to market too soon. They probably should have given themselves a few more years, raised more money and hired more people. Maybe some of them are just hoping to make it big enough to sell the company and retire. However, their openness/transparency causes me to hope for the best. I’m in the process of reading “Undaunted Courage” by Stephen Ambrose – the history of the Lewis and Clark expedition of 1804 to 1806. The men involved in that venture knew they were making history and were committed to it. My sense is that the Tesla folks know they are making history and are committed to it. I hope they succeed.

  • Outsider

    Isn’t Lotus a car company? As I recall, GM once owned Lotus for the purpose of speeding up the development process on many vehicles.