Tesla's Musk Apologizes To Investors Over His Recent Behavior

Aug 2, 2018
Originally published on August 2, 2018 8:21 am
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NOEL KING, HOST:

OK. Now we have the story of a big and pretty surprising Silicon Valley apology. Yesterday, Tesla reported that over the past three months, its losses doubled, but the company also bragged that it's now making 5,000 of its brand-new, more affordable models every week. But here was the big surprise. Tesla CEO Elon Musk apologized to investors for his behavior repeatedly. Musk has gotten in hot water lately for his aggressive and sometimes offensive rants on social media. NPR's Jasmine Garsd has the story.

JASMINE GARSD, BYLINE: Tesla's May earnings call was infamously bizarre. This is how an irritated Elon Musk responded to one analyst's question.

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ELON MUSK: Next. Boring, bonehead questions are not cool. Next.

GARSD: In the days leading up to this year's second financial report, there was a lot of buzz - not about the cars, but about Elon Musk. Nobody expected this.

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MUSK: Yeah, I'd like to apologize for, you know, being impolite on the prior call.

GARSD: This comes after a turbulent period for Musk in which he went all Kanye West on Twitter, like last year, when a public transportation blogger called his ideas elitist. Musk simply responded, you're an idiot. Investors have not been amused.

GENE MUNSTER: By acting like that, it does cause some of those investors to question and may not support them, so it makes it harder for them to raise money.

GARSD: Gene Munster works at Loup, a venture capital company that follows Tesla. Munster says investors have reached out to express concern. Public opinion is key to this company's growth.

MUNSTER: Tesla doesn't use regular advertising. They use word of mouth. So the point there is that by him alienating some of his referral network, that can actually have a negative impact on sales.

GARSD: Will Schenk is a huge Tesla fan. He even recently built a Tesla app. A few months ago, he bought his second one, a Model S

WILL SCHENK: No, I love it. I love it. When I first got it, I would just make up places to drive for really no reason.

GARSD: Few companies in the world inspire the fierce loyalty Tesla does. When most owners buy one, they are investing in a vision for the future, a world that runs on electric cars. Schenk, a software company owner, says he bought it because it's just fun, quiet, fast, almost spaceshiplike, but he admits the roughly $160,000 he spent on this car...

SCHENK: I mean, they're just way too expensive. I mean, not everyone is going to spend six figures on a car. I mean, that's, like, a house.

GARSD: Tesla is trying to transition from luxury to mass consumption. The widely anticipated Model 3 is Tesla's cheapest car yet. It starts at about $35,000. It's gotten stellar reviews. In yesterday's call, Musk assured investors that Tesla is now able to produce 5,000 a week, which was largely perceived as defensive. There have been widely reported production delays and missed deadlines.

EDWARD NIEDERMEYER: Unfortunately, I think the fan culture has actually enabled a lot of Tesla's problems.

GARSD: Edward Niedermeyer is a car reporter and author of the upcoming book "Ludicrous" about Tesla. He says brand loyalty, adoration of Elon Musk and his inability to accept criticism has stunted the company.

NIEDERMEYER: You know, it would've done the company a lot more good if early customers had been a lot more demanding.

GARSD: Niedermeyer says the problem with the company is it's so tied to its founder's personality, and Elon Musk seems to have realized that. Yesterday, he sounded polite and brimming with excitement about the Model 3. He was even critical about the company's production issues. And perhaps most importantly, he did something simple - unusual for Elon Musk. He said, I'm sorry.

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MUSK: Nonetheless, there's still no excuse. My apologies for not being polite on the prior call.

TONI SACCONAGHI: I appreciate that. Thank you.

GARSD: As they spoke, Tesla's stock rose in after-hours trading. Jasmine Garsd, NPR News, New York. Transcript provided by NPR, Copyright NPR.