Musk and Tesla are doing much better than headlines suggest
Three dark-arts PR issues intersect for Tesla and Musk
Tesla and Elon Musk are having a terrible time getting basic, neutral, balanced press coverage. They’ve achieved enormous results in ramping up the Tesla Model 3 production faster than almost any new model car in history, they are outselling their competitors massively in North America and Europe, they still have hundreds of thousands of $1,000 pre-orders for the Tesla Model 3 (more than any car ever anywhere), Teslas continue to win raves from teardown analysts and test drivers, its autonomous features continue to be the best of any production vehicles, its market capitalization is 10 times what it was 5 years ago, and the Model 3 itself is on track to soon be the fifth or sixth best selling car in the USA of any make, model, or price point. In a normal world, this string of successes would lead to incredibly positive coverage.
But this isn’t a normal world. Media outlets of all types are disproportionately covering every negative story, distorting the narrative around neutral stories and reporting any rumor about Elon Musk they can find. As the chart shows, news sentiment is often negative despite the incredibly positive results. It doesn’t take much reading of Musk’s actual tweets or Tesla’s actual results to see the massive disparity between how Tesla and Musk are portrayed and what they are actually doing.
Why is the media getting Tesla and Musk so wrong right now? There are three major problems which have led to this situation:
- PR campaigns attacking electric cars funded by the Koch brothers and other elements of the fossil fuel industry
- PR campaigns attacking Tesla funded by firms which are shorting TSLA stock
- Media revenue, cost and competition challenges
Let’s start with the Koch brothers
During 2015, their network of fossil-fuel CEOs worked together create and fund an advocacy organization with $10 million USD in February of 2016. The organization launched in August of 2016 as Fueling U.S. Forward.
One of the two primaries in the group, James Mahoney, is a Koch company board member, has been a Koch Industries executive for over 20 years, and is a long-time confidant of the billionaire brothers. The other, Charlie Drevna, is a long-term lobbyist for the fossil-fuel industry, with positions as Distinguished Senior Fellow at the Institute for Energy Research and as a board member of the American Fuel & Petrochemical Manufacturers.
This is not a particularly surprising development, as the Koch Brothers and their network have been funding disinformation campaigns for decades. They have been funding legislation-twisting groups, Libertarian think tanks, and climate-change denial groups in order to advance their vision of the USA and the world. While they talk about liberty and freedom, oddly, everything they do is directly in aid of Koch Industries’ bottom line, and as one of the two biggest privately held firms in the USA with an annual revenue of $100 billion, it’s a big bottom line.
The EV efforts included targeted events in black evangelical communities, documented extensively in the New York Times. They have also purchased space in major journals pretending to be articles and YouTube videos designed to spread disinformation. Some in the EV- and cleantech-oriented press as well as watchdog groups such as DeSmog Blog have spent a fair amount of time documenting the disinformation in the inserted articles and video after video that Fuel U.S. Forward released.
The organization lasted for a little over a year, shutting down in October of 2017, but Koch-funded attacks on electric vehicles continue through Koch network-affiliated think tanks like the Institute for Energy Research and its sister organization the American Energy Alliance and through political advocacy groups like Americans for Prosperity. These groups have been funding anti-renewables and climate-change disinformation campaigns globally, with their money washing up on the books of Australian right-wing lobbying groups such as the IPA.
These are sophisticated and connected PR organizations, a large part of whose efforts are to insert their version of reality into press outlets of all types.
What about TSLA shorters?
In April of 2018, TSLA became the most shorted stock in the USA, with almost $12 billion in short positions held by investors.
Here’s a collection of headlines related to shorters from different months in the last year from different outlets.
- Tesla short-sellers lose $2.5 billion in tug-of-war
- Tesla’s Stock Success Has Cost Short Traders $3.7 Billion This Year
- Cumulative Tesla Short losses now at 18 Billion?
- Tesla Short Sellers Lost Nearly $2 Billion In A Few Days
- Tesla (TSLA) shorts have lost $2 billion in June as stock continues rise
- Tesla Has The Largest Short Position Of Any Stock Followed By The FAANGs
So, they have a ton of money invested and they keep losing it. But what does this have to do with why media outlets keep saying bad things about Tesla? Well, the report What to Do When Short-Sellers Attack from an organization devoted to the PR industry has some good insights.
“‘Short sellers have historically been some of the savviest media folk around,’ says Elliot Sloane, president of New York’s Sloane & Company. ‘They are always willing to speak to the press and will be very clear about their convictions on a certain company. This is quite different from the traditional large-cap buy side players like Fidelity, which have rules about not promoting their portfolio holdings. The shorts understand the demands of the press and know how to work the system.’ […]
“Adds Ferris, ‘Certain members of the media have made a heyday with professional shorts, and have been used by certain short selling firms to help them feather their nests. The pros are most adept at working their perspectives into stories, or generating stories. After all, they know that a negative story, or one with negative or questioning overtones, often has a deleterious effect on market price, and properly timed, can create a windfall for the short seller.’”
Recently, Elon Musk pointed out the links between one of the most aggressive of Tesla muck-raking journalists, Linette Lopez of the Business Insider, and Jim Chanos, one of the most aggressive of Tesla shorts.
Business Insider and Seeking Alpha are both business- and investment-oriented sites which have a strong anti-Tesla bias in their reporting. And one of the most prominent Tesla-bashers at Business Insider has been clear about her relationship with one of the strongest of the Tesla-shorters.
As another Twitter user recently highlighted, 100% of Business Insider’s many Tesla articles from reporter Linette Lopez since November 2017 have had negative headlines. They are often dramatic in language, sensationalistic, and insinuate poor morals and even criminal intent.
Personally, I have found Musk’s tweets to be reasonable and fairly mild-mannered. I try to read them all when controversy erupts and have found his tone to be reasonable and his use of Twitter well within bounds. I read all of the tweets around the Thailand rescue for example and found all but one to be reasonable, humble, full of praise for the rescue team and grounded. For that one definitely inappropriate tweet which was in response to personal attacks, Elon Musk quickly offered a full and complete apology to the person he attacked, to his companies and to the employees of his companies.
But the media reacted as if he’d had a meltdown, a thread of attack which continues today with headline after headline questioning his sanity. Shorters’ PR campaigns are feeding that line of attack to press organizations time and again.
But why are the media falling for it?
This is the age of the internet. Anyone who reads this is reading it on a screen of some sort. Legacy media has been gutted, with newspaper after newspaper folding, most recently the incredibly significant Village Voice. There have been a variety of successful and unsuccessful attempts to shift to non-paper formats, a shift which puts them up against new competitors without any print legacy costs. Advertisers all went to Google. The 2008 economic downturn was a nail in the coffin of a transforming media landscape. They are now competing with clickbait, listicle, and aggregator sites for eyeballs. They are competing with Facebook, YouTube and now Medium. They are competing with CNN, MSNBC, and Fox News.
Media outlets are doing what they can to survive. They are laying off seasoned journalists with strong fact-checking instincts. They are laying off fact-checkers. They are laying off editors. They are rethinking how they write headlines to compete with clickbait.
The bean counters are quite reasonably trying to keep their businesses afloat. And that means that aggressive and sophisticated PR campaigns such as the Koch brothers and the shorters have fertile soil into which to sow their disinformation. The media are desperate for content, desperate for sources, desperate for breaking news, and desperate for headlines that sell eyeballs.
And Tesla and Musk are big eyeball grabbers and have been for 5 years as this Google Trends graph shows. A publisher I work with regularly told me that anything with Tesla or Musk in the headline is likely to perform better than average, providing anecdotal confirmation for this.
And there is also the old and well-proven adage that if it bleeds it leads. While I find that headlines about shorters losing billions more lighten my mornings, they are still negative headlines. In the 24/7/365 news cycle in which we find ourselves, it’s necessary for media to fill the headlines and airwaves with something, and fear, uncertainty, and doubt sell better than sunshine and puppies.
As one tiny example of how little critical thinking goes into modern press articles, I spent some time recently reviewing a series of articles on magnesite as a CO2-sequestration mineral. A geochemistry conference’s PR group had done a press release about a presentation by a Canadian researcher. They had sent it to the useful media outlets and aggregator sites. It made 25 sites or so, which isn’t bad for a nerdy science thing.
And virtually none of the sites put the effort in context. The vast majority just pushed the content as they received it. Few reached out to the study author for additional insight. The ones that changed the press release at all just wrote some words around direct quotations of the content. They all repeated the false overstatement in the original press release headline which wasn’t in the body of the release. It was sloppy, disheartening journalism by sites devoted to science journalism about global warming, one of the most important topics facing us today.
And so, here we are. Two different groups with billions and billions at stake are pouring money into disinformation campaigns at a time when media is facing the twentieth year of an existential crisis that doesn’t appear to be ending. Well funded fear-mongering PR machines are taking advantages of the vulnerabilities of the press and other media and Tesla and Elon Musk are at the intersection of their attacks.
Which is part of the reason why taking Tesla private would have been a good idea. That would have eliminated the shorters’ motivation to continue to attack. Unfortunately, the trio of issues will continue to deliver overly bad press on a regular basis now that Musk and the Tesla board decided to keep Tesla public.