Electric-car maker Tesla (NASDAQ: TSLA) has rather mixed feelings regarding the media. The company is all too happy to tout positive coverage and product reviews, only to turn around and chastise anything remotely negative. Much like the president dismisses critical stories as "fake news," Tesla often calls bad press "misleading."
Consider the episode last month, when Tesla attacked Consumer Reports for predicting that the forthcoming Model 3 would have "average reliability," which in itself is not a bad prediction. Tesla fired back. "Consumer Reports has not yet driven a Model 3, let alone do they know anything substantial about how the Model 3 was designed and engineered," a Tesla spokeswoman told numerous outlets. "Time and time again, our own data shows that Consumer Reports' automotive reporting is consistently inaccurate and misleading to consumers." Presumably, Consumer Reports' prior, more positive assessments of Tesla products are not misleading.
Consumer Reports expects Model 3 to have "average reliability." Image source: Tesla.
That's just one example, and not even the most recent one.
Shame!
Another telling instance came just this month, when CEO Elon Musk reprimanded the media for covering mass firings at Tesla. On the earnings call, Musk did confirm that the firings impacted approximately 700 employees, or 2% of the workforce, but there's still considerable controversy surrounding the firings, as some have speculated that Tesla was retaliating against pro-union employees that have been trying to organize Tesla's Fremont factory for quite some time.
Still, Musk could not have been more blunt (emphasis added):
The other thing I want to mention is that there are a lot of articles about Tesla firing employees and laying off some lines and stuff. These are really ridiculous. And like anyone -- any journalist who'd written articles in this effect should be ashamed of themselves for lacking journalistic integrity. At every company in the world, there's annual performance reviews.
Here's the thing: If your company is going to receive a disproportionate amount of media coverage, it cuts both ways.
Pros and cons
To be clear, investors have to recognize that Tesla absolutely benefits from its media coverage. Despite ongoing build quality issues that somehow still persist to this day, Tesla vehicles represent a significant advancement in automotive design in terms of hardware/software/services integration.
Other automakers can easily replicate the underlying propulsion technology, but the broader auto industry remains heavily fragmented and entrenched. I once asked Musk if Tesla could improve manufacturing (hardware) faster than legacy automakers could improve integration of software, services, and distribution (having to go through franchised dealers), or if rivals could even do so. "It's not within their power," Musk replied.