The Real Problem With Tesla's Test-Drive Debacle

Last week, New York Times reporter John Broder decided to give Tesla's (NASDAQ: TSLA  ) Model S Sedan a test drive from Washington, DC to Boston. The Times had already conducted a test drive in California last September that was relatively positive. Broder was motivated to give it a shot on the East Coast because Tesla had just installed charging stations that made the trip possible.

The results -- sad to say -- were not encouraging for Broder. He never made it to Boston.

What went wrong
The Model S Sedan had an estimated 265 miles per charge, and the charging stations were 200 miles apart. In theory, this should have given Broder enough energy to make it safely to each charging station.

In practice, however, it was a different story. The car's range display began falling quicker than it should have been when entering New Jersey. Attempting to eek out all the miles he could, Broder significantly reduced his speed -- he was going 54 miles per hour in a 65 zone -- and turned the heat off inside the car. This is especially important to note, as it was around 30 degrees outside at the time.

Given these changes, Broder made it to the second charging station in Milford, Connecticut before running out of juice.

The problems continued, however, that night and into the next day. When Broder parked the car for the night, it said he had 90 miles of range left -- which was more than he needed. When he awoke the next morning, however, the range dropped down to 25 -- likely due to the cold weather. Eventually, this led to him needing to get towed.

When the story hit the presses, the stock dropped3%.

Was it really Tesla's fault?
No sooner had the Times story been published, however, than Tesla CEO Elon Musk had pointed out three errors Broder had committed which made his trip more difficult than it should have been.

Among those errors, which Tesla was able to monitor because of agreed-upon tracking logs of the car's behavior, were: the car was not fully charged at each station, Broder had gone above the speed limit, and he had entered Manhattan during rush hour.

Bloomberg also published several tweets by Musk, stating: "NYTimes article about Tesla range in cold is fake," and, "Vehicle logs tell true story that he didn't actually charge to max & took a long detour." 

In the end, one analyst following the company said the problems were likely due to operator errors in charging the car. It seems to me that the "long detour" Musk referred to was -- embarrassingly -- when the car had to be towed.

But here's the real problem
Even if we give Tesla the benefit of the doubt, the entire incident points out how long Tesla has to go before its Model S -- or any other electric car -- can be a viable option for the average American.

Consider: Even though Tesla pays for the charge at their installed stations -- these charges take about an hour. In order to obtain ideal mileage, certain restrictions need to be taken, like lowering one's speed, and turning off the heat; though it's never fun to be in, getting caught in rush-hour traffic could pose serious problems for drivers.

It's completely understandable that the first big electric car company would have issues like this. But it's also understandable that these kinds of restrictions -- plus a price tag that's north of $50,000 -- give the average American driver headaches.

I have no doubt that Tesla will eventually address these concerns -- improving its technology, educating its drivers, and building out charging stations. But it's important for investors to realize where Tesla is on the innovation curve below.

Source: Technology Adoption Life-Cycle by Infrae.

Right now, Tesla is in the Techies stage, and probably making inroads into the Visionary crowd. In order for an investment to really pay off, however, it needs to eventually reach the Pragmatists. That's not to say the company won't make it. Elon Musk is one innovative guy. But investors need to be aware of where the company is before jumping in headfirst. 

And even if the company does make progress on these fronts, a looming question remains: Will Tesla be able to fend off its big-name competitors? The Motley Fool answers this question and more in our most in-depth Tesla research available for smart investors like you. Thousands have already claimed their own premium ticker coverage, and you can gain instant access to your own by clicking here now.


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  • Report this Comment On February 13, 2013, at 3:10 PM, TMFCheesehead wrote:

    As a quick update, I was wrong in saying that the long detour was because of the car being towed. It's been reported that it had to do with an extended period in Manhattan instead.

    Brian Stoffel

  • Report this Comment On February 13, 2013, at 3:35 PM, F2JP wrote:

    When someone driving an ICE vehicle on a long trip and makes all of these human decisions;

    1) Goes on a long trip without filling the tank all the way before leaving.

    2) Doesn’t fully fill it at fuel stops.

    3) Neglects to fill it at an overnight stop.

    4) Takes a detour adding extra miles.

    Do we blame the driver or the car when he runs out of gas????

    The New York Times Article was an obvious attempt to sensationalize for the sake of an agenda and ratings at Tesla's expense .

    Clearly Common Sense Did Not Apply……

    The Times Article, This Article, and the Bandwagon Brigade all seem to be a bit desperate.

    The timing, as with all the other short interest desperate attempts to stave off their inevitable losses, tells all. (RE: Bricking, etc.)

    This trip was taken at a time when the Supercharger placement between DC and Boston is incomplete. Within a few months the Supercharger placement should be more like 100 miles with the posibility for others to be added later.

    Your article claims that it takes an hour to get a 150 mile charge. That is incorrect. It takes 30 minutes.

    HMMMM: Maybe the internet isn't ready for prime time if it allows you to make 2 errors in one article????

    This stunt will only prove to be a blip on Tesla’s path to Success.

  • Report this Comment On February 13, 2013, at 3:59 PM, SDSupercharger1 wrote:

    Thanks for the thought provoking article--i especially like your technology life cycle adoption graph. However, after giving this article some thought I would like to comment on some of your conclusions. First, I agree with the F2JP above who makes some valid points about the NYT test drive. Secondly, you are establishing a user principle based on the entire car buying public when obviously, the model S is targeting a subset of this population. You could ask the question why the Porsche Panamera does not have an incredibly high adoption rate--is it because the car is not worthy? Does it only target techies and visionaries. Lastly, this car targets a subset of people who will use it for trips up to 200 miles, and generally fly to destinations beyond that. Those that decide to drive long distance will meticulously plan out their trip. Tesla buyers have achieved up to 425 miles of range when using optimized driving conditions---and currently the car does not have a sleep mode yet which prevents battery depletion when the car is sitting still. Unlike current ICE cars, Tesla will continue to update new features (including sleep mode) that the current owners do not yet have access to. This moves the model S into a unique category. A car that continually adds new features for free over long periods of ownership--amazing concept isn't it? I have driven a model S, and will buy one based on the concept that it is the best car in this price range, not because it is the best electric car.

  • Report this Comment On February 13, 2013, at 5:21 PM, AjitC wrote:

    The certainly makes sense as a second car for a hi end buyer. 95% of the trips are short, within the city. Being able to charge at home is convenience.

    Over time the performance of the car will improve:

    1. Model S weighs about 4,800 lbs, including 1,300 lbs battery package. The car itself weighs 3,500 lbs. There is room to cut weight with improved structural design, stronger Al alloys, etc. Knock 500-1000 lbs over time.

    2. The motor, inverter, control electronics could get efficient. The HVAC uses electrical resistance heating and it may be able to use a heat pump.

    3. Insulation could be improved with light weight foam in the panels. Use laminated insulated glass. heat the steering wheel to reduce heat demand overall.

    4. The aerodynamics have room to improve, starting with the performance wheels, front and profile.

    5. Battery capacity/Kg improves about 7%/year for Li. Disruptive innovations are a possibility, now that there is a lot auto demand.

    Meanwhile, rapid SC deployment 100 miles appart would go a long way in stimulating demand.

  • Report this Comment On February 13, 2013, at 5:33 PM, TMFLomax wrote:

    Great piece as always, Brian. It's funny, one of the reasons why I chickened out on buying shares of Tesla for my real-money portfolio in late 2011 was an interesting part of the company's risk factors: "customers may experience difficulty operating them properly" because they are different from other cars (plus all the other things notwithstanding like charging stations, temperature, etc.). Given this debacle and the fact that even though Musk's outrage doesn't sound quite right, it's quite possible they ARE very difficult to understand... well, maybe I'm not as upset about not pulling the trigger as I thought.

    Oh here's where I admitted I was chickening out:

    http://www.fool.com/investing/general/2011/12/13/why-im-not-...

    Perhaps the techies and visionaries will be enough for now, but I'm still kinda chicken about this one. ;)

    Alyce

  • Report this Comment On February 13, 2013, at 5:54 PM, Mysterymove wrote:

    "...the entire incident points out how long Tesla has to go before its Model S -- or any other electric car -- can be a viable option for the average American."

    Brian,

    Unfortunately, your above sweeping generalization is entirely misinformed as well as misleading. Given that 1) the majority of Americans drive less than 20 miles to work daily and 2) on most days, most cars are only used for work communtes, an electric vehicle (EV) is a very realistic option. A luxury vehicle like the Model S is not a viable option for the average American's budget, but as you point out, there are big-name competitors whom will soon likely offer many less expensive alternatives (as there are now, e.g., Nissan Leaf).

    At this very moment, the technology is in service which makes it entirely possible for most Americans to easily use an EV to commute to and from work and around town on errands without running out of charge. If they need to make longer trips, an ICE vehicle is always available, whether in the form of a rental, car sharing or their own second vehicle.

  • Report this Comment On February 13, 2013, at 9:48 PM, Scriptacus wrote:

    Another slight inaccuracy in your article: "The results -- sad to say -- were not encouraging for Broder. He never made it to Boston."

    Broder was never going to Boston, see quote below.

    "Before I set out from my home in suburban Washington, I informed Tesla that I intended to make a brief stop in New York and that I would spend the night in the vicinity of Milford rather than trying to make it to Boston, which was theoretically possible with a full charge at Milford..."

  • Report this Comment On February 13, 2013, at 10:10 PM, SteveTG3 wrote:

    from this article:

    "Even if we give Tesla the benefit of the doubt, the entire incident points out how long Tesla has to go before its Model S -- or any other electric car -- can be a viable option for the average American."

    The story this week was a test of the Supercharger network, not the Model S. This distinction was pointed out by the Times writer Broder in his blog this week.

    Broder's test is being contested. We will see if any new facts come out.

    As far as reviews of the car, consider this from a review in September 2012,

    "The 2012 Model S, a versatile sedan that succeeds the company's two-seat Roadster, is simultaneously stylish, efficient, roomy, crazy fast, high-tech and all electric. IT DEFIES THE NOTION THAT ELECTRIC VEHICLES ARE RANGE-LIMITED CONVEYANCES."

    (caps obviously my addition).

    Now, you may say I cherry picked some EV fanatics review. The quotation is from the September 30, 2012 New York Times Review of the Model S.

    I've read articles and comments based on the last Friday's NY Times report that imply the Model S is another EV, "another range-limited conveyance"), and EVs are simply for urban use or enthusiasts. This is simply false. The Model S is not another EV. It has 3-4 times the range as other EVs (265 miles per epa compared to typical 70-80).

    It does lose 10-20% range in cold weather using heat. That does not take away from it's vast improvement over other EVs, and vast improvement over paying money on long distance trips.

    All of the public may not be ready for the Tesla EV of today, but that still vastly surpasses all other EVs in 77 with not wind, and it still will work with Superchargers filled in 150 miles apart. Doesn't all the public deserve better than a slew of articles that suggest the Model S is simply another EV? (by the way I recognize this article doesn't go that far, but I do believe it heads in that direction).

  • Report this Comment On February 14, 2013, at 12:32 PM, tokyorush wrote:

    Well, I disagree with the conclusion that there is a long way to go before it is practical for a typical person. I would agree that if you plan to do long-distance driving, it is still a work in progress. For normal driving on a daily basis I can't imagine a more reasonable vehicle. Of course, you do need to learn (as it says in the Model S users' manual) that you should ALWAYS charge overnight when possible, and always maintain a full charge. Also, the reporter decided to charge in normal driving mode instead of range mode, which seems strange for a long-distance trip.

    Nevertheless, I think the article is an honest one for the most part based on his experience and his lack of electric-car knowledge. My ONLY issue, is that Broder's normal beat is the oil industry. Is that a conflict of interest?

  • Report this Comment On February 18, 2013, at 1:44 PM, rhealth wrote:

    Lets not forget, poor people are not buying this car. This means that Tesla owners have other cars, maybe a whole fleet of them. They can take a gas car on a long trip. A single product does not have to solve all of mankind's problems, enjoy the Tesla for what it is (if you have the means, I do not)

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