Fear of Fire the Last Reason to Sell Tesla
By now, if you're closely following every turn of Tesla, you probably heard about George Clooney's dissatisfaction with and sale of his Tesla Roadster. You can read the interview that led to Clooney's statement at esquire.com .
I'm not sure if it was a moment of weakness, arrogance or sheer stupidity, but Muck's response to a customer complaint was a textbook example of how not to handle client criticism: "In other news, George Clooney reports that his iPhone 1 had a bug back in '07."
Setting aside the humor of the tweet, what is the message Musk is sending to current and potentially future customers? Tesla cars may break down or have issues leaving drivers stranded on the side of the road and management will make jokes about it?
What kind of treatment can the average car buyer expect if a high-profile celebrity is blown off as little more than an annoyance to ridicule?
Unless Musk is ready to report that everything is perfect with the Model S, maybe it's caveat emptor for buyers, and don't complain about any problems because you may end up as the butt of a joke. Who wouldn't be upset if they dropped $100,000 for a vehicle and it left them on the side of the road multiple times?
The correct response, if any by Musk, is to apologize for the defects and to try to make it right. If Tesla wants to have more than a snowball's chance against Ford
Any CEO who doesn't take product complaints seriously does so at his own and shareholders' peril.
Speaking of peril, if you've read any of my recent warnings about Tesla's incredibly high valuation, you know I've left zero ambiguity over my thoughts on what direction the share price is headed. The short version is that I believe it's time to take some profits off the table.
But I don't think the reason is because of cars catching on fire. It seems the mere mention of Tesla and fire in the same sentence can drop the share price by $2 or more within minutes. I can find many reasons why the stock should be sold off including lack of revenue, lack of profits or lack of long-term government subsidies to keep the sticker price competitive with gas vehicles, but lack of safety isn't one.