From Broder To The 2018 Tesla Short Seller Storm To Today — What A Long, Strange Trip It’s Been


Cars

Published on March 2nd, 2019 | by Zachary Shahan

March 2nd, 2019 by Zachary Shahan 



Dead car rolling. Will not sell. Tesla will never produce it. Tesla will be bankrupt before a customer gets one. Demand is all dried up. Depreciation will be horrible. No one will want another. (All claims made years ago about the Model S.)

Some of the most interesting shifts in our lives come through odd luck — or fate if your brain works how mine does. Believe it or not, I didn’t plan to land in the career of “blogger” when I went to college in the year 2000. (I don’t think the term even existed back then.) One odd life twist after another, though, and I was blogging professionally. I think I started to really treat it as a career when a CNBC representative reached out asking to interview me in CNBC’s London studios for a series they were doing in coordination with the Harvard Business Review titled “Energy Opportunities.” It was in 2011 and I had just been seriously blogging for about a year. The way the email read, it seemed like they wanted to interview me, but that honestly didn’t seem to make sense to me so I assumed it was simply poor wording in the email and they wanted me to suggest solar experts who they could interview for the series. After responding that I would try to think of some people and send the suggestions, the representative made it clear that they actually wanted to interview me. (Well I’ll be darned.)

I had never written an article about Tesla back then. My focus was solar energy, climate science, and related topics — not electric cars. In fact, the first article of mine that Elon Musk ever tweeted was actually an article about solar energy that I wrote for ABB’s blog. (I’m not sure how he ran across it, but my hunch is that he found it on reddit after someone posted it there.) Eventually, I got into electric vehicle coverage. Previously working hard to promote bicycling, mass transit, and sustainable development as the director of a nonprofit focused on those topics, I knew to a painstaking degree how hard it was to get people out of cars, and I realized a rapid switch to electric transport was critical if we were going to prevent runaway climate catastrophe. Also, it turned out that learning and writing about electric cars became more interesting than writing every day about a technology that just sits on your roof for a few decades generating electricity. (There’s not very much exciting consumer interaction with solar panels after you buy them.)

Anyway, this story was supposed to start with John Broder, so let’s get to that. While I had been writing about Tesla a bit beforehand, it was the John Broder–Tesla “incident” that really propelled me into this topic. I’m one of those people who’s just a sucker for injustice stories. I get morally irritated by unfair attacks, smears, cheating, and the like. Who actually knows what happened with the John Broder/New York Times test drive of a Model S using a nascent Supercharger network? I presume only Broder really knows. But the reporting, which happened to come from a guy who normally covered oil and climate stories, was clearly messed up. Whether on purpose or by accident, Broder drove in circles for a while looking for a Supercharger before he inevitably killed the battery. There were other issues as well, but that one stood out. Anyone who has driven a Tesla a lot knows how easy it is to spot Superchargers. his accounting of the story just didn’t make sense as far as I could tell, and it basically slammed Tesla in consumers’ eyes at a very early and delicate phase of its life. It seemed wrong.

In the end, Elon Musk’s/Tesla’s last blog post about the coverage started like this: “The New York Times reversed its opinion on the review of our Model S and no longer believes that it was an accurate account of what happened. After investigating the facts surrounding the test drive, the Public Editor agreed that John Broder had ‘problems with precision and judgment,’ ‘took casual and imprecise notes’ and made ‘few conclusions that are unassailable.’

“We would like to thank Margaret Sullivan and The New York Times for looking into this matter and thoughtfully considering the public evidence, as well as additional evidence provided on background. A debt of appreciation is also owed to other media outlets, such as CNN, CNBC, and Consumer Reports, who repeated The New York Times test drive at normal highway speeds and comfortable cabin temperatures without ever running out of range.

“But, most of all, we would like to thank our customers, who rallied immediately to the defense of Tesla and the electric car revolution, sending hundreds of heartfelt letters of support to The New York Times in the space of a few days! Entirely of their own volition, several customers spent the past holiday weekend recreating the Broder test drive route and showing that it can be done easily using the Tesla Supercharger network on the East Coast. You guys are awesome!

“The bottom line is that the Model S combined with Supercharging works well for a long road trip, even in a cold, snowy winter.”

As has been the case in so many instances, Tesla owners and fans had to set the record straight on some misleading reporting. You could say they saved Tesla’s ass. They and Elon Musk, who has a tendency to stand up for himself when he feels he or his companies are unfairly attacked.

A few days later, Elon noted that Tesla might have lost $100 million in sales from that New York Times coverage. (For some perspective, TSLA was trading at around $35 a pop back then.)

So, what ever happened to John Broder? I don’t recall seeing his coverage of Tesla after that. Well, after what I presume was good coverage of other topics, he eventually became an editor at the New York Times. “John M. Broder joined the editorial board at the start of 2018,” his profile there notes.

Interestingly, the New York Times has never come around and gotten positive about Tesla from what I’ve seen. In fact, reporters there covering Tesla are openly, blatantly, and I have to say often conspiratorially sliming Elon Musk on Twitter. One of our writers last summer called an article about a call with Elon Musk “the billion-dollar hit piece.” You could call it Broder × 10.

I seldom look at tweets from the $TSLAQ crowd, since it gives me the same gross feeling I get from reading threads dominated by Donald Trump supporters, and there are too many instances where my brain wants to explode out of my skull looking at the misleading statements and insinuations, but I have seen enough that I’ve honestly been shocked at what reporters at some of these outlets, including the New York Times, say on Twitter.

To be absolutely frank: I just find the New York Times coverage of Tesla over the years to be depressing. It lacks so much context and seems to go so far out of its way to smear a person and a company working so hard to do so much for society. The newspaper does tremendous political reporting, so it is all the more upsetting. I do wonder how many people buy into the “fake news” nonsense Trump pushes specifically because they know how bad non-political reporting, like reporting on Tesla, can be.

But this story is not really about the New York Times or Broder. It is about the bigger picture of Tesla coverage and analysis — from newspapers and Wall Street analysts. So let’s move on.

I’ve pointed out several times before that there are people who have been predicting Tesla’s imminent demise for over a decade. (See our Tesla Flashbacks series.) That is, they were predicting Tesla’s bankruptcy more than a decade ago and they still are today. They are sometimes published in major media outlets (again, outlets I hugely respect for their political reporting, but have to sadly say are horrible at covering cleantech topics from everything I’ve seen). These people are taken seriously. And they have built a growing legion of like-minded critics and Wall Street short sellers. Yes, despite being wrong for over a decade, it appears their community and their messaging has grown. Nonetheless, they and their new colleagues are indeed convinced today that Tesla is doomed and will finally collapse. Many of them believe it. They find any little potential weakness in Tesla and they make it seem fatal. After two profitable quarters that they claimed would never happen, after bringing a car to mass production that they said Tesla could never mass produce, after offering a $35,000 Tesla Model 3 that they said would never arrive, after outselling all other luxury autos in the US and nearly all other sedans (despite being much more expensive), after topping customer satisfaction surveys for years, these critics continue to ignore their past mistakes in reporting and analysis and think everything will “turn around for them” any day.

Impossible. Just a stunt. Can never be produced. Vaporware. Fraud. Will never be built. $35,000 — Pffff! You just made me spit up my drink.

It is odd. It is often confusing. How can you be so wrong for so long and continue along the same path? How can you be so confident in your analysis when it has been incorrect so many times before, including in recent months? A phrase from Scooby Doo comes to mind — “And I would have gotten away with it too, if it weren’t for you meddling kids!” It seems to those of us bullish about Tesla that these short sellers and critics are the evil villain reciting that line yet again. It seems that, to them (if they aren’t purposefully trying to manipulate things for short-term profits), they feel like they are the heroes who will eventually meddle and then see Tesla crumble. (How they see that as a positive eventual victory is one of the baffling parts of it all, but I assume they genuinely think Elon Musk and Tesla are somehow defrauding the world — despite all the happy owners, happy investors, and astonishing accomplishments of the company despite the obvious challenges.)

I recently wrote a long piece about Jim Chanos. As one of the most vocal and revered critics of Tesla, I found it astounding while going through old comments of his that he was so wrong for so long yet continues to express a bearish opinion on Tesla (though, much less frequently and less visually these days). Is he genuinely just a manipulator looking to make a buck or a billion despite the societal consequences or has he genuinely thought for years on end that Tesla will collapse any day? Do critics like this truly swallow the incorrect assumptions and forecasts from not that long in the past, find a way to rationalize why they were wrong, and keep the overall thesis intact in their minds? I can’t say. True understanding and motives are hard to determine in this world.

The 2018 short seller storm was something to behold. Amazing. Shorts and their enablers in major media outlets were absolutely convinced that Tesla couldn’t make it to the end of 2018 without raising financing. They absolutely would not acknowledge Elon Musk’s repeated assertions that the company would show a profit at the end of the year. They asked the same questions over and over in different ways — demonstrating inherent disdain for Tesla’s forecasts and statements — and Elon eventually broke. He couldn’t handle the implied insults any longer and lost his cool. The media went wild. It was “reporting” gold, and it “proved” the critics were right.

Except it didn’t. Tesla ended up making a profit in the 3rd and 4th quarters and never had to raise more financing.

Did any analysts or reporters go back and correct their own false claims and smears? Only a few did. Most of them seemed to explain it away as some sort of magic and kept on keepin’ on. (The funny thing is: Either they were fundamentally wrong about Tesla and its finances or they got tricked by some unforeseen magic and financial maneuvering. Either way, there should be some kind of self-reflection there. Instead, Tesla hitting its forecasts and being right about the financing is somehow flipped as yet another sign Elon Musk is evil and Tesla is doomed. At least, that’s how I read their arguments.)

Tesla held a press call this week to share details and have a Q&A about the $35,000 Model 3 and changes at the company that are being made to continue streamlining, cutting costs, and doing what it can to “accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible.” Tesla continues to do what it has done for more than a decade — try new things, go with what works, take some risks, and streamline parts of the business to become more efficient. Yet again, the critics see all such changes as some form of evil smoke & mirrors, or even outright fraud. They claim another “gotcha” about one thing after another. For those of us who have been following the company for years, it all becomes a case of “the sky is falling” or “wolf, wolf!” Even if they ever have a point, they’ve lost so much credibility from being wrong so many times that there’s no opening for an honest, level-headed discussion. Who has actually been right most of the time in the past decade? Why should anyone buy into the idea that everything Elon/Tesla does is nefarious? Why should people now think it’s illegal or bad for a company CEO to share information and thoughts about his company on Twitter or with reporters? It really gets into a Fox News/Trumpist-type realm where you’re not supposed to believe what you see or hear (hat tip to Rudy Giuliani × 2 … or × 10).

This week was another surreal point in time for the Tesla story. The core target of Tesla for the past 13 or so years was achieved. Tesla unleashed ordering for its $35,000 Model 3. Even before this pricing, the car took 7% of the global EV market last year and outsold numerous cars half its price. But this is clearly the big milestone — $35,000. This is essentially what Elon Musk wrote in 2006 Tesla was working toward. As impossible as it might have seemed to critics back then and along the way, it is here now. Tesla did it. Almost two decades of planning and hard work led to the target, led almost exactly where Elon Musk expected it would. The Supercharger network Broder tested worked and grew. The cars have been loved by owners more than any other cars are loved by their owners. Demand has grown like gangbusters. Tesla has won over numerous gearheads, race car drivers, BMW & Mercedes loyalists, Honda Civic hypermilers, and more. Yet several Tesla reporters at major media outlets look up and see disaster, catastrophe, the end of days. Lifelong critics wag their fingers and scream (sometimes with glee) that the sky is falling. Really this time.

What a strange world this is.

Keep calm and charge on. The future is … now.

 
 

 

Tags: New York Times, Pravduh, Tesla, Tesla Flashbacks, Tesla Model 3, Tesla Model S, Tesla short sellers, Tesla shorts, Tesla stock, tesla superchargers, Tesla Supercharging


About the Author

Zachary Shahan Zach is tryin’ to help society help itself (and other species). He spends most of his time here on CleanTechnica as its director and chief editor. He’s also the president of Important Media and the director/founder of EV Obsession and Solar Love. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, and Canada. Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in. But he offers no professional investment advice and would rather not be responsible for you losing money, so don’t jump to conclusions.



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