Tesla’s New Crisis Management Tactic as NHTSA Launches Investigation

[Editor’s note: Reader Kim May pointed us to this story of the latest crisis management tactic being employed by Tesla Motors as it fights for acceptance among regulators and the public.]

Electric carmaker Tesla Motors has been under (pardon the pun) fire since YouTube video of one of its vehicles engulfed in flames at the side of a Washington highway went viral. CEO Elon Musk has been conducting quite the crisis management campaign, skillfully inserting his talking points regarding safety into interviews and public statements over and over again, but while that works wonderfully in the court of public opinion, the National Highway Traffic Safety Administration has entered the picture and changed the game.

You may recall that the NHTSA just took a ton of heat for it’s poor handling of the entire Toyota unintended acceleration mess, so the regulators are in no mood for games. What’s Musks’s plan? Bloomberg’s Angela Greiling Keane & Jeff Plungis report:

Chief Executive Officer Elon Musk said yesterday on his blog that the company made a software adjustment to its Model S sedan so it won’t ride as low to the ground at highway speed, reducing the risk of battery packs being punctured and catching fire after hitting objects in the road. His remarks preceded a National Highway Traffic Safety Administration statement that it would investigate the Model S over two such fires.

Should regulators reject the software fix, they may order Palo Alto, California-based Tesla to install a thicker barrier of aluminum or a stronger metal in the Model S’s undercarriage. That would be much more costly and undermine Tesla’s claim to sell the safest U.S. car, one priced from $70,000 to more than $100,000.

It’s critical that Musk, and Tesla as a whole, do as much as possible to protect the reputation of their vehicles as safe. Of course, if that means that they actually need to be physically made more safe, then that’s an issue that cannot be ignored simply to keep publicity positive. It should be interesting to see how Tesla handles the NHTSA investigation, and whether Musk can maintain positive buzz, and prevent too many stumbles, as he faces the hurdles involved in pushing new tech through the cautious approval processes of regulatory bodies.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com

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