Tesla Up In Arms Against the New York Times

Tesla Motors
Tesla Motors

Elon Musk, the chief executive of Tesla Motors, has called the recent New York Times Review on the Tesla Model S as ‘fake’.

The Tesla boss went on Twitter denouncing the review and defending the carmaker’s highly touted family super saloon all electric car. The review said that the electric car ran out of power sooner than expected when it was driven on one cold winter day. Musk tweeted, “NYTimes article about Tesla range in cold is fake.” He added that Tesla is preparing a blog to detail what actually occurred in the test driver and is now “lining up other journalists to do the same drive”.

For its part, the New York Times defended its review, claiming Musk’s assertions as ‘flatly untrue’. The review was done by John Broder, who test drove the Model S from Washington DC to Connecticut. He said that during the trip the battery charge drained sooner than touted, which then forced him to turn down heating and drive beyond the speed limit. Ultimately, the car did not reach its destination and had to be towed to a charging station.

As for the tweet by Musk, the New York Times in a statement said that the review was ‘completely factual, describing the trip as it occurred. Any suggestion that the account was fake is of course, flatly untrue.” It further added that there was no unreported detour that occurred during the test drive.

Tesla has repeatedly stated that the Model S has a range of 265 miles or 426 km on a single full charge. In some instances, the car firm said that the Model S can run up to 300 miles.

Many industry experts has observed that the range of electric cars lower because of cold weather.

In another move, even Model S owners are organizing to set the record straight regarding the review John Broder did for the New York Times on the Tesla Model S. These concerned Tesla owners would be replicating the travel done from Maryland to Connecticut to show that the vehicles are more than able to complete the trip he couldn’t complete. The counter-review trip would start from Tesla Service Center in Rockville, Maryland and they would pick up several other Tesla Model S owners at the Delaware Supercharger, stopping over at Milford Connecticut SuperCharger to recharge their vehicles to full. The drivers would even be staying at the Groton, Connecticut hotel that Broder was billeted during his trip. The crowdsource trip is replicating the Broder trip as closely as possible.

A Twitter account has been set up so that team members can update one another during the trip. The car’s data logs would also be provided to support Musk’s rebuttal to the New York Times review.

The New York Times review has caused a ripple in the share prices for Tesla, falling two percent since the review came out last February 8. Overall though, the last twelve months have shown that Tesla share prices rise by 23.5%.

The Success and Glitches of the Model S

teslas
teslas

According to the New York Times, the Tesla Model S is a ‘game-changer, comparable to the Model T Ford.’ The vehicle from the Silicon Valley start up has won every 2012 ‘Car of the Year’ award from every conceivable award giving entity, including a unanimous vote from Motor Trend, the first of its kind in the car magazine’s history.

For its part, Tesla is not resting on its laurels, with its new brand spanking facility in California working at full capacity, the company is set to complete its 20,000 order backlog sooner than expected.

It has not been smooth sailing though for the company. There are a still a number of growing pains for a start-up building a car from the ground up using a refurbished production line. While, for a normal internal combustion car glitches can be overlooked, the Model S is not your ordinary vehicle, with much of its design and building under the microscope from start to finish.

Here are just some of the technical issues reported on the Model S:

  • Self-opening locked doors. Some Model S owners reported that they had incidents wherein locked cars suddenly opening, with one even reporting the door ajar. Oftentimes, this occurs after manual remote locking with the FOB key and in the ‘walkaway’ automatic lock mode. In this mode, the car automatically locks itself when it senses the key FOB is away at a distance.
  • Sticking Sunroof. Some Model S owners have reported that the sunroof was difficult in opening, especially when it is controlled remotely with the touch screen. This may either be a mechanical issue.
  • Software Glitches. There is a Model S software update version 4.1 providing for a ‘sleep mode’ to reduce power consumption during non-use or at shut down. There have been a number of reports regarding bugs and glitches, such as panoramic roof, door handles, locking, displays and controls that operate when powering up the Model S. While rebooting the software does away with the glitches, there are some owners reporting daily need for rebooting to address these glitches. Tesla is addressing the issue with a 4.2 software version.
  • Fogged Windshields. Many Model S owners reported poor defroster/defogger functionality during cold or humid conditions. This has been addressed though with a new vent design and retrofit kits are being made available and installation takes an hour.
  • Charge Port Door Malfunction. The charge port door is part of the taillight and in some instances, it does not open properly or close correctly. In some instances, there have been malfunctions on its locking and even jamming of the charge cord. Tesla is addressing the issue.

While these are issues that affect only a few, a greater majority is not suffering any issues or probably some are just accepting the vehicle’s idiosyncrasies.

Fisker Makes Moves

FiskerKarma
FiskerKarma

In an unprecedented move, Fisker Automotive recently hired Joel Ewanick. Ewanick was the former head of marketing at General Motors. His new position with Fisker is Chief of Global Sales and Marketing. The new hire was announced by Richard Beattie, who was the retiring Chief Commercial Officer.

One of the first tasks of Ewanick is to resuscitate the image of Fisker and its U.S. $103,000 luxury plug in hybrid named the Karma. Since last December 2011, issues and incidents have plagued the car and the company, leading to a less than favorable outlook for their product.

When Rusell Datz, spokesperson for Fisker was quizzed on the new appointment, the reply was, “Anytime you start a car company, you’re in for challenge after challenge.”

Before accepting the Fisker post, Ewanick had previous marketing positions at General Motors and Hyundai. His last posting was a bit controversial, as he was ousted last July from GM after he failed to disclose the full cost of the multimillion dollar sponsorship deal with Premiere League club Manchester United. Prior to GM, he held the position of Head of Marketing at Nissan North America for just six short weeks.

In the weeks prior to the announcement, Ewanick was already a consultant to Fisker and will hold the position on an interim basis until a permanent one is found. Ewanick would be directly reporting to Tony Posawatz, the CEO of Fisker. Similarly, Posawatz and Ewanick came fromGM after the former was chief engineer for the iconic Chevrolet Volt.  Both the Volt and the Karma are plug in hybrids, where both operate as electric cars that have engines as range extenders for greater distance travelling.

On other related Karma news, Datz further confirmed the recall of the Karma again, but reiterated that the issues “were small compared to other things that could have happened.” He pointed out that Tesla had also been recalled several times over and even had lawsuits with suppliers. In the end he said, “these problems are nothing new.”

In a formal statement, Posawatz hailed Ewanick’s “wealth of motor industry experience and knowledge to guide us through this interim period.”  The statement further added that the previous experience in marketing the Volt would prove very helpful in allowing Fisker to gain a better foothold in the burgeoning electric vehicle market. Amongst the plans of the company is to build an affordable family oriented vehicle, but this may take some time as the company is seeking additional funds and are sourcing for investments.

Tesla at Turning Point

Tesla Motors
Tesla Motors

The company said in its quarterly earnings announcement that it has achieved a “fundamental turning point” as it transitions itself from a small volume maker of niche electric cars to a company with mass production capacity, able to build and sell 20,000 or more vehicles each year.

This is very optimistic and it remains as a company production target of the company. This is a great jump, as it would be two orders larger than the whole third quarter production of the company. In that same period, the company was able to build just 350 Model S and sell just 250 as well as sell 68 of its Roadsters. All these resulted in gross revenues totaling U.S.$50 million.

The numbers remain small with the production compacted in the last two weeks of the quarter. Tesla in its defense says it is able to build 200 cars per week and at that rate, it would be able to build 10,000 cars in a year. This is the number to make the company cash flow positive and it assumes it sells all those sedans at the projected price of U.S.$57,400. The current price of the Model S is pegged at U.S.$95,400.

The company has spent a great deal of last year upgrading its main factory located in Fremont, California. The former Toyota plant’s retooling is a slow and arduous process and is funded in part by a U.S.$465 million loan from the US Department of Energy and another U.S.$222 million on its follow on offering after the company initially went public.  Another major issue is the multiple suits it is facing claiming that its manufacturer owned showrooms are violative of current U.S. law.

These suits were filed by the auto dealers of America and their respective state associations. Tesla is currently selling its electric cars online and not through franchised independent business dealers. Once bought, the factory delivers the cars directly to the buyer.

In undertaking this practice, two deigned aspects of car purchases are removed, mainly haggling and the buying. The Tesla Stores are educational showrooms where no cars are sold. The dealer groups do not believe this and have lobbied to change state laws as well as prevent the company from opening its stores. The Tesla Stores are viewed as dire threats and the movement has grown to suits filed in four different states.

A different view is being taken by Tesla CEO Elon Musk. He wrote on the Tesla website, “In many respects, it would be easier to pursue the traditional franchise dealership model.” This he said would save the company money and thus broaden its distribution coverage. There is a fundamental problem though, he observed, as the dealers would explain the advantages of battery electric cars while relying on conventional vehicles for their profits and sales.

The purpose of the Tesla stores is to let the public learn about the Model S from product specialists no on commission and learn about electric cars in general. The Model S is very different from any other vehicle that it requires a great amount of education before considering a purchase.  Musk added, “Their goal and the sole metric of their success is to have you enjoy the experience of visiting so much that you look forward to returning again. “

As for laws, Musk adds, “We do not seek to change those rules and we have taken great care not to act in a manner contrary to those rules. “ He views the lawsuits filed as ‘starkly contrary to the spirit and the letter of the law.” One case was filed by a Fisker dealer while the other suit is “an auto group that has repeatedly demanded that it be granted a Tesla franchise.”

The Electric Smart Car Re-engineered

smartcar
smartcar

The 2013 Smart Fortwo ED has new features, such as a larger battery array and an improved motor. There is one aspect of it that would attract the most attention, that is its sticker price.

Counting the federal income tax credit of US$7,500, the US$25,750 sticker price would be reduced to about US$18,250 when the vehicle becomes available to go on sale next spring. Aside from this federal subsidy, there are also state subsidies that can be applied depending on the state where the purchase was made. An example would be California, where its current zero emission program had recently awarded its 10,000th rebate, allowing the purchase price to be reduced a further US$2,500.

For other states aside from California, this sticker price makes the Fortwo ED the lowest priced electric vehicle to made available in the U.S. market. According to Donna Boland, spokesperson for Mercedes-Benz USA, the company did not intend to ‘play games’ and advertise the price to be inclusive of the government tax credits.

Smart USA had brought its electric vehicles to Brooklyn, New York for test drives along the waterfront and around Prospect Park. The borough was also the site for the 2010 test drives for the first Smart car, which was then available for leases, making the event a sort of a homecoming for the vehicle.

Tesla Motors, which had supplied the battery and other components for the MB B-Class EV, was not part of the consortium that had produced the new specifications of the battery and motor for the Smart Fortwo ED. This was confirmed by Heiko Schmidt, Product Manager for Smart during the Paris Motor Show. The battery pack for the upgraded Smart came from Deutsche ACCUmotive, a subsidiary of Daimler who also owns the Smart brand.

The vehicle would have a 17.6 Kwh battery pack with a peak production of 55 kilowatts and is able to produce a maximum output of 74 horsepower in two minute bursts. The motor is a joint venture product with Bosch. The battery can be charged to full using a 240 volt charger in about six hours with an add on price of US$1,300. In three and a half hours, the vehicle would charged between twenty and eighty percent with a travel range of ninety miles according to the company’s engineers. This range though still has not been confirmed by the Environmental Protection Agency.

The overall feel of the vehicle is that is quick at acceleration due to an available 100 pound feet of torque with a manufacturer estimated acceleration of zero to sixty miles per hour in eleven and a half seconds. This is a marked improvement from its predecessor, but also quicker than the standard combustion engine Fortwo. The top speed is at eighty miles per hour when tested at the Brooklyn area during a stop and go session.

The interior design of the Smart is not a far cry from the standard vehicle, with its battery pack mounted under floor allowing for a little storage space. There are two dash mounted instruments that resemble tachometers that provide information on the vehicle’s charge and power demand. Other add on features include paddles mounted behind the steering wheel that control the deployment of the regenerative braking system. The vehicle is extra quiet save for a bit of motor whining and better handling for those wanting a small compact compact vehicle with a very small carbon footprint.