Tesla’s vehicles are the three top-selling EVs in the US market. Model S has been consistently outselling every competing large luxury sedan for years, and it appears as if Model 3 will similarly dominate the small sedan segment. The company continues merrily producing 5,000 Model 3s per week, and teardowns by two sets of auto industry experts (Munro & Associates and a group commissioned by German automakers) have concluded that the new EV should deliver a healthy profit margin.
Most of this would probably be a surprise to those who get their news from the mainstream media (by which we mean media outlets that do not focus on the electric vehicle industry). These days, the prevailing image of Tesla in national newspapers and popular websites is of a company struggling for survival, led by a flamboyant and unstable celebrity billionaire.
As Peter Forman (aka Papafox), writing in CleanTechnica, explains, this is a carefully crafted narrative, assembled from grains of truth, cherry-picked facts, speculation, innuendo and appeals to peoples’ existing prejudices. For the media outlets that create it, it’s calculated to produce the maximum possible number of clicks. For others working behind the scenes, it’s intended to move the TSLA stock price.
The recent New York Times interview of Elon Musk, which CleanTechnica calls “The Billion-Dollar Tesla Hit Piece,” was a great success for the anti-Tesla crowd — the day after it appeared, Tesla’s stock price dropped by over $30 a share, resulting in “a single-day transfer of wealth of over a billion dollars from Tesla’s investors to the stock’s short sellers.” As Forman sees it, Musk was probably hoping to explain how difficult his job at Tesla has been, considering the relentless negativity of the media. “Instead, he fell prey to what can best be described as a journalistic ambush.”
The interview generated a huge amount of press coverage — despite the fact that it was basically a recap of information that Elon had already discussed elsewhere — and different media outlets spun it in opposite ways. (One headline quoted Elon saying, “the worst is over,” while another quoted him saying, “the worst is yet to come.”)
One of the many commentaries on the infamous interview was an essay from executive coach Jonathan Rotenberg, who sees Musk as belonging to a rare personality group that includes Steve Jobs, Nikola Tesla, and Albert Einstein. According to Rotenberg, high achievers of this stamp are “very intense, deep people who typically think ~1000X harder than most people do about the problems of humankind, and how they can best be of service to humanity over the course of their life.” He adds, “They feel such a profound sense of personal responsibility for their lifelong missions; they often cannot allow themselves to rest if they feel their work is in jeopardy or could have negative consequences for others.”
It’s common knowledge that Elon Musk wants to Change the World. However, those who recently tuned in may be unaware that his master plan to transform the world’s transportation system consists of three phases: three vehicles, and three existentially risky “bet the company” situations, as Elon told the Times.
As Mr. Forman explains, “While conceptualizing the new vehicle and building prototypes, cash needs are relatively low, but as the production line is built and then labor is added, the negative cash flow is at its highest. Finally, after revenues start arriving from the sale of the new vehicles, the cash flow situation improves until we see positive cash flow at Tesla again. It’s been this way for Model S, for Model X, and it will be this way for Model 3 as well, but the scale of Model 3 is so massive that the swings between negative cash flow and positive are much more dramatic.”
The general public, ignorant of Tesla’s master plan, hears about million-dollar losses and assumes that the company is circling the drain. Forman believes that most short sellers must also be falling into this error; otherwise, they wouldn’t be betting so aggressively against the company.
“Unfortunately for Tesla, many shorts are not passive investors,” Forman writes. “The trading by shorts on a regular basis is so huge that regular patterns of manipulating the stock price are regularly observed by investors. The net result is that rallies are marginalized and dips exaggerated. The shorts communicate regularly with each other in online forums such as Seeking Alpha and formulate the next big reason why they believe Tesla’s stock will go down.”
The shorts use the mass media to communicate their prophecies of doom to the public. “When an analyst who is bullish on Tesla appears on a business news channel such as CNBC, that analyst is grilled by the hosts with the short seller themes du jour in a manner that assumes the shorts are right. In reality, the shorts are wrong so often and the staggering losses they experience every year are so consistent that you’d think the media would figure it out by now.”
Alas, in our society there’s a tremendous appetite for “turd in the punchbowl” stories — anything that makes an admired or prominent person or movement look bad is assured of a ready audience. As Michael Barnard writes in another CleanTechnica article, “Tesla and Elon Musk are having a terrible time getting basic, neutral, balanced press coverage. In a normal world, [Tesla’s] string of successes would lead to incredibly positive coverage. But this isn’t a normal world. Media outlets of all types are disproportionately covering every negative story, distorting the narrative around neutral stories and reporting any rumor about Elon Musk they can find.”
Barnard believes that the media Tesla-bashing is being turbocharged not only by short-selling interests, but by anti-electric car PR campaigns organized by supporters of the fossil fuel industries. Before you say “conspiracy theory” and stop reading, let’s point out that the enemies of Tesla fall into several different categories, and there’s no evidence that these groups are working together. However, it’s no secret that there are oil industry-funded groups (yes, including the sinister Koch brothers) working to delay the advent of EVs.
A network of fossil fuel CEOs created an advocacy group called Fueling U.S. Forward in 2016. Two of the group’s leaders were Koch board member James Mahoney and fossil-fuel industry lobbyist Charlie Drevna. The group’s anti-EV efforts included targeted events in black evangelical communities (as reported in the New York Times) as well as faux news articles and YouTube videos. The organization’s disinformation campaign has been documented by Electrek, DeSmog Blog, and CleanTechnica.
Fueling U.S. Forward shut down after a year or so, but the tide of oily FUD continues to flow through Koch-affiliated think tanks and political advocacy groups, including the Institute for Energy Research, the American Energy Alliance, and Americans for Prosperity.
The anti-EV FUD (and many other negative narratives that permeate the media these days) is enabled by the parlous position of the press. “Media outlets are doing what they can to survive,” Barnard writes. “They are laying off seasoned journalists with strong fact-checking instincts. They are laying off fact-checkers. They are laying off editors. They are rethinking how they write headlines. And that means that aggressive and sophisticated PR campaigns…have fertile soil into which to sow their disinformation. The media are desperate for content, desperate for sources, desperate for ‘breaking’ news, and desperate for headlines that sell eyeballs. And Tesla and Musk are big eyeball grabbers.”
While the FUD machine thrives in today’s media morass, it isn’t unstoppable. The click-chasing cynics at Business Insider, Seeking Alpha, and CNBC are counterbalanced by more EV-friendly journalists at Charged, Electrek, CleanTechnica, InsideEVs, Teslarati, the Sierra Club, and, of course, your beloved EVANNEX blog. And when the metaphorical presses roll, The Media isn’t really biased against EVs or Tesla — it’s biased in favor of a good story, preferably one involving somebody’s downfall and destruction. If it bleeds, it leads. Later this year, if Tesla can achieve profitability, it may be the short sellers whose ruination provides the blood sport we can enjoy with our morning coffee.
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