Elon Musk: Wall Street Journal article is incorrect

Iron Man Elon Musk (jurvetson) 2

Any time an EV-maker announces something new, the mainstream press tends to report it as “an effort to boost disappointing sales,” or words to that effect. But when the company in question is Tesla, such assertions aren’t likely to go unchallenged.

This week, Tesla announced a deal with US Bank that will allow it to cut monthly lease payments by as much as 25%, as well as a “happiness guarantee,” which allows buyers to return their Model S within 90 days “if you don’t like your car for any reason.”

The Wall Street Journal characterized the new offers as incentives designed to “lift sagging US sales.” While acknowledging that there is a waiting list for the Model S, with current buyers having to wait until December to get their cars, the WSJ said that year-to-date US Model S sales are down 26% from 2013, citing WardsAuto.

As is his wont, Elon Musk ‏quickly responded with a tweet: “Article in WSJ re Tesla sales is incorrect. September was a record high [worldwide] and up 65% year-over-year in North America.”

He also took exception to the implication that Tesla is discounting the price of a leased Model S. “Lease price improvement is due to US Bank deal. It is *not* a discount. Revenue to Tesla is unchanged,” Musk tweeted.

SEE ALSO: Tesla says New York Times Model S review is “fake”

So, who (if anyone) is right here? According to InsideEVs, Tesla’s September 2014 sales are indeed up over 65% compared to September 2013, so it seems misleading to say that sales are “sagging,” or “declining,” as the WSJ claimed. However, as several media outlets have pointed out, the two parties may not be referring to the same numbers. The figure cited by the WSJ was year-to-date sales, which are indeed down compared to 2013.

However, it’s worth pointing out a couple of things: First, Tesla does not release monthly sales figures, so both WardsAuto’s and InsidesEVs’ figures (which do not agree) are only estimates, and we’ll have to wait until November 5, when the company makes its quarterly report, for a definitive figure. Second, Tesla has only one factory, and it needs to produce slightly different vehicles for different markets. Some months it may produce more cars for the US, some months more for Europe, etc. The company has opened several important new markets this year, including China and Japan, so it won’t be surprising if US deliveries slow down, and the waiting list grows. What really matters is not how many units are being delivered, but how many new orders are coming in. 

The WSJ also said that “leases represent a substantial share of Tesla sales,” which seems highly unlikely, as Tesla only began offering retail leases in the second quarter of 2014 (the financing program, which began in April 2013, is not a lease, although it does include a guaranteed buyback clause).

As so often happens, the tide of media spin swamped the nugget of news in Tesla’s announcement: the California carmaker is offering buyers a better deal at little or no cost to itself (does anyone really think many buyers are going to return their Model S?), and, as it turns out, reaping yet another crop of good publicity as well.

 

Source: Wall Street Journal, Elon Musk, InsideEVs, Forbes
Image: Jurvetson (flickr)