Tesla Fights Back -- and Wins

Investors pushed shares of Tesla Motors (NASDAQ: TSLA  ) higher by 6% on Tuesday, marking the stock's biggest single-day gain since Nov. 5, when shares of the electric-car maker spiked 8%. This was a refreshing change from a week ago. If you remember, Mr. Market punished the stock last week after a New York Times reporter published a negative review of the company's all-electric Model S sedan.

For those who missed out, here's a brief recap. Tesla CEO Elon Musk publicly accused John Broder, a longtime reporter for the Times, of writing a "fake" account of his recent test drive of Tesla's new zero-emissions car.

Broder's article, "Stalled Out on Tesla's Electric Highway," detailed how the battery-fueled Model S failed to deliver on its certified range of 265 miles per charge. Broder blamed freezing temperatures for the loss in battery charge during his drive from Washington, D.C., to New York.

Here's where things got interesting. As is standard with all media test-drives, Tesla activated what it calls detailed vehicle logging. In this case, Tesla's vehicle logs revealed that Broder "worked very hard to force our car to stop running," according to a published account of the ordeal that Musk wrote.

When details matter
To further support its defense, Tesla made the vehicle logs public last week in a report on the company's blog. Here's one of the more incriminating details from Tesla's records of the test drive:

"Cruise control was never set to 54 mph as claimed in the article, nor did he limp along at 45 mph. Broder in fact drove at speeds from 65 mph to 81 mph for a majority of the trip and at an average cabin temperature setting of 72 F."

Musk wraps up the blog entry by asking the Times: "Please investigate this article and determine the truth."

Margaret Sullivan, the paper's ombudsman, answered Musk's plea in an article published Monday in the Times, titled "Problems With Precision and Judgment, but Not Integrity, in Tesla Test." In her response, Sullivan admits that Broder took "imprecise notes along the journey" and that he was unaware that Tesla was running vehicle logs of his trip. Oops. Maybe next time Broder can test-drive honesty.

Collateral repair
All things considered, Tesla once again emerged from this setback victorious. In fact, at the time of this writing, the stock is up 16% year to date. Not to mention that the company continues to get positive press out of this PR nightmare.

A reporter for AllThings D recently joined six Tesla Model S owners on the same road trip that Broder took in the vehicle. Best of all, the AllThings D reporter live-tweeted the nearly flawless results of the car's performance on their drive. If we've learned anything from this it is: Don't mess with Tesla.

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Near-faultless execution has led Tesla Motors to the brink of success, but the road ahead remains a hard one. Despite progress, 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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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 21, 2013, at 11:05 AM, pondee619 wrote:

    "The measure of a man's real character is what he would do if he knew he would never be found out."

    Thomas B. Macaulay

    "he was unaware that Tesla was running vehicle logs of his trip".

    We now know of the real character of Mr. Broder and, by extention, the New York Times. All the news that's fit to print, (and, if we know you are watching, true).

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