It's all really been kind of silly. Negative headlines have swarmed the interwebs pointing to the "danger" of Tesla Motors (NASDAQ:TSLA) Model S battery fires. But a closer look at the numbers reveals very little merit to these concerns. And now the electric-vehicle manufacturer is stepping up to the plate in an aggressive public relations attempt to calm the storm.
The passionate CEO who won't back down
If you haven't yet become familiar with Tesla CEO Elon Musk and his enthusiasm for his company's mission, here's your chance. In a company blog post, the CEO spoke up on Monday night in passionate defense of the company's vehicle.
Sure, new technologies should be held to a higher standard, Musk acknowledged. "However, there should also be some reasonable limit to how high such a standard should be, and we believe that this has been vastly exceeded in recent media coverage." Not holding back, Musk laid out the facts:
How Does the Tesla Model S Fire Risk Compare to Gasoline Cars?
Since the Model S went into production last year, there have been more than a quarter million gasoline car fires in the United States alone, resulting in over 400 deaths and approximately 1,200 serious injuries (extrapolating 2012 NFPA data). However, the three Model S fires, which only occurred after very high-speed collisions and caused no serious injuries or deaths, received more national headlines than all 250,000+ gasoline fires combined. The media coverage of Model S fires vs. gasoline car fires is disproportionate by several orders of magnitude, despite the latter actually being far more deadly.
To address what Musk calls the "onslaught of popular and financial media seeking to make a sensation out of something that a simple Google search would reveal to be false," Tesla has organized an aggressive plan to douse these fiery headlines.
First, Tesla immediately rolled out a software update that will give the car higher ground clearance at highway speeds. This will help the company address the two fires that resulted from the Model S driving over debris on the highway. Even more, the company plans to deliver a software update in January that will "give the driver direct control of the air suspension ride height transitions."
Second, Tesla has asked the National Highway Traffic Safety Administration to open an investigation of the fires.The request is not out of worry, Musk stated, but to combat "a false perception about the safety of electric cars."
Finally, Tesla has amended its warranty policy to cover all Model S fires except when an owner "actively tries to destroy the car." Musk said the adjustment to the warranty policy was made to "reinforce how strongly we feel about the low risk of fire in our cars."
This isn't the first time Musk has spoken up strongly in defense of the Model S. After the first fire, Musk's blog post on the matter even contained a hint of sarcasm: "For consumers concerned about fire risk, there should be absolutely zero doubt that it is safer to power a car with a battery than a large tank of highly flammable liquid."
In the company's response to the third fire, Tesla didn't even bother saying a word. Instead, it let the driver of the vehicle speak up on Tesla's behalf. In fact, all three drivers maintained enthusiasm for the Model S after their accidents.
The right move
Tesla was in dire need of some aggressive and smart PR. Not only have negative headlines about the fires been splashed around the web, but the massive sell-off of Tesla stock is also sparking negative coverage. In the last month the stock has fallen by about 30%. To be fair, the sell-off can't be put into perspective until investors understand the stock surged more than 500% in the preceding 12 months.
While shortsighted investors look to these headlines and Musk's response as short-term drivers of the stock price, the important takeaway for Foolish investors is that Tesla's CEO is making a smart move by trying to get the concern out of the way early on. If this is a legitimate issue, it should be addressed now -- while the technology and design elements are still young -- not when Tesla brings its lower-cost, third-generation vehicle to market.