Straight from Elon Musk
Early last week, Wall Street Journal, Bloomberg and a number of other financial outlets were wagging fingers at Tesla Motors because a Tesla Model S in Seattle, WA caught on fire. Instantly, the value of Tesla Motors stock took a hit – it lost about 12% or $3 million – but I’m not interested in Tesla’s stock price.
I’ve written about Elon Musk before. I’m a great admirer of not only his products but also his innovative marketing (e.g. display rooms in shopping centers, selling direct to customers, battery swaps, etc.). He is not content with the status quo. He strives to push the envelope on every aspect – engineering, marketing, sales – you name it.
But what I want to share with you in this post are the marketing lessons you can learn from how Tesla handled this potential public relations disaster.
Tesla Model S Fire Timeline
The fire happened on October 1st. A number of commuters video-taped the fire and posted it online. The financial circuit – Wall Street Journal,, Bloomberg and many others grabbed the video and begin speculating on the dire consequences of this one fire on the future of Tesla.
Just for a moment, I want you to imagine you were in Elon’s shoes.
Stock price is plummeting.
Your phone lines are melting with the media and stock analysts asking for an explanation.
Current Model S owners are probably wondering if they need to be concerned.
This could turn into a marketing and public relations disaster. Everything you’ve worked for the last decade is being threatened by one fire in Seattle.
How do you feel? What do you want to do? What do you want to tell everyone?
Let’s get back to the timeline. The accident happens on Tuesday, October 1st.
Tesla Motors immediately gets busy addressing the media so it can get the word out as quickly as possible.
On October 2nd Tesla sends out it’s Service Manager along with a “team of experts” to review the damaged automobile
By October 3rd, – just 2 days after the incident – the VP of Sales, Jerome Guillen, reporting directly to Elon Musk, emails the car owner to express his concern about the accident and that he was pleased to hear the car had performed as designed.
Guillen also reviews with the car owner what they have uncovered to date.
On October 4th, Elon sends emails to current Tesla owners and those like me – wannabe Tesla owners. My husband knows that whenever we get a $70,000 windfall, it is already earmarked for a Tesla.
So what did Tesla say?
Well, if you played along with my questions earlier and put yourself in Elon’s shoes, you could imagine Elon may have felt very defensive. He may have – as many other CEOs have in the past – buckled from the pressure. He may have kept his head down. Checked with his attorneys regarding liability and prayed the news would simply blow over.
After all, it was just one accident.
Instead, Elon calmly and in a matter-of-fact tone walks readers through the Seattle scenario – explaining everything. He explains what happened and how, the car’s performance,, what went right and what didn’t. He then shares the email from the car owner and communications of Gullien. Copy of email can be found at the end of this post.
Elon Musk Turns Negative into Positive
Here is how Tesla Motors turned this negative PR into a marketing positive.
1. Immediate Response
They jumped on the situation immediately and pulled out all of the stops by sending people to Seattle to check out the car and to determine what had happened.
Delaying a response from the company would only have extended the life of the story. Better to jump on it and get a handle on it.
2.Clear and consistent Message
Tesla crafted a clear and consistent message and sent the same message to everyone – the media, Wall Street, current owners and potential owners.
Often the messages from a company are not consistent, which creates more confusion and more distrust.
3. Calm and matter-of-fact tone
The company didn’t get defensive or emotional about the situation. Instead, it presented the facts and in so doing put a spotlight on the responsiveness of their customer service is and compared a Tesla Model S to that of gasoline only cars.
Tesla turned a very ugly incident into a win.
Very, very impressive.
The question for you is how can you use these lessons in your business?
For instance, how do you respond when you receive a customer complaint?
What do you do when someone gives your restaurant a negative review on Yelp?
What do you say to the person who left a nasty comment on your Facebook Page?
How will you use Elon’s lessons to turn problems into wins for your business in the future?
Email from Elon Musk
Here is the email I received from Elon Musk, the email from Jerome Gullien and a response from the customer whose Model S caught on fire.
|October 4, 2013
About the Model S fire
By Elon Musk, Chairman, Product Architect & CEO
|Earlier this week, a Model S traveling at highway speed struck a large metal object, causing significant damage to the vehicle. A curved section that fell off a semi-trailer was recovered from the roadway near where the accident occurred and, according to the road crew that was on the scene, appears to be the culprit. The geometry of the object caused a powerful lever action as it went under the car, punching upward and impaling the Model S with a peak force on the order of 25 tons. Only a force of this magnitude would be strong enough to punch a 3 inch diameter hole through the quarter inch armor plate protecting the base of the vehicle.The Model S owner was nonetheless able to exit the highway as instructed by the onboard alert system, bring the car to a stop and depart the vehicle without injury. A fire caused by the impact began in the front battery module – the battery pack has a total of 16 modules – but was contained to the front section of the car by internal firewalls within the pack. Vents built into the battery pack directed the flames down towards the road and away from the vehicle.When the fire department arrived, they observed standard procedure, which was to gain access to the source of the fire by puncturing holes in the top of the battery’s protective metal plate and applying water. For the Model S lithium-ion battery, it was correct to apply water (vs. dry chemical extinguisher), but not to puncture the metal firewall, as the newly created holes allowed the flames to then vent upwards into the front trunk section of the Model S. Nonetheless, a combination of water followed by dry chemical extinguisher quickly brought the fire to an end.It is important to note that the fire in the battery was contained to a small section near the front by the internal firewalls built into the pack structure. At no point did fire enter the passenger compartment.
Had a conventional gasoline car encountered the same object on the highway, the result could have been far worse. A typical gasoline car only has a thin metal sheet protecting the underbody, leaving it vulnerable to destruction of the fuel supply lines or fuel tank, which causes a pool of gasoline to form and often burn the entire car to the ground. In contrast, the combustion energy of our battery pack is only about 10% of the energy contained in a gasoline tank and is divided into 16 modules with firewalls in between. As a consequence, the effective combustion potential is only about 1% that of the fuel in a comparable gasoline sedan.
The nationwide driving statistics make this very clear: there are 150,000 car fires per year according to the National Fire Protection Association, and Americans drive about 3 trillion miles per year according to the Department of Transportation. That equates to 1 vehicle fire for every 20 million miles driven, compared to 1 fire in over 100 million miles for Tesla. This means you are 5 times more likely to experience a fire in a conventional gasoline car than a Tesla!
For consumers concerned about fire risk, there should be absolutely zero doubt that it is safer to power a car with a battery than a large tank of highly flammable liquid.
|Below is our email correspondence with the Model S owner that experienced the fire, reprinted with his permission:From: robert Carlson
Sent: Thursday, October 03, 2013 12:53 PM
To: Jerome Guillen
Subject: carlson 0389Mr.Guillen,Thanks for the support. I completely agree with the assessment to date. I guess you can test for everything, but some other celestial bullet comes along and challenges your design. I agree that the car performed very well under such an extreme test. The batteries went through a controlled burn which the internet images really exaggerates. Anyway, I am still a big fan of your car and look forward to getting back into one. Justin offered a white loaner–thanks. I am also an investor and have to say that the response I am observing is really supportive of the future for electric vehicles. I was thinking this was bound to happen, just not to me. But now it is out there and probably gets a sigh of relief as a test and risk issue-this “doomsday” event has now been tested, and the design and engineering works.rob carlson
|On Oct 3, 2013, at 12:29 PM, Jerome Guillen wrote:Dear Mr. Carlson:I am the VP of sales and service for Tesla, reporting directly to Elon Musk, Tesla‘s CEO.I am sorry to hear that you experienced a collision in your Model S 2 days ago. We are happy that the Model S performed in such a way that you were not injured in the accident and that nobody else was hurt.
I believe you have been in contact with Justin Samson, our service manager, since the accident. We are following this case extremely closely and we have sent a team of experts to review your vehicle. All indications are that your Model S drove over large, oddly-shaped metal object which impacted the leading edge of the vehicle’s undercarriage and rotated into the underside of the vehicle (“pole vault” effect). This is a highly uncommon occurrence.
Based on our review thus far, we believe that the Model S performed as designed by limiting the resulting fire to the affected zones only. Given the significant intensity of the impact, which managed to pierce the 1/4 inch bottom plate (something that is extremely hard to do), the Model S energy containment functions operated correctly. In particular, the top cover of the battery provided a strong barrier and there was no apparent propagation of the fire into the cabin. This ensured cabin integrity and occupant safety, which remains our most important goal.
We very much appreciate your support, patience and understanding while we proceed with the investigation. Justin keeps me closely informed. Please feel free to contact me directly, if you have any question or concern.
|Tesla Motors | 3500 Deer Creek Road | Palo Alto, CA 94304