Tesla Closes its PR Department: A Turn in the Wrong Direction

PR professionals and journalists greeted Tesla’s decision to eliminate its PR department with a mix of dismay and distaste. Big mistake, they say. While Tesla’s thin-skinned CEO Elon Musk has complained about media coverage, closing the PR department will open the door to inaccurate and biased media reports about the company.

Some observers wonder if Tesla needs a PR department with its eccentric CEO in the driver’s seat. Musk posts voluminously on Twitter where he has almost 40 million followers and gets plenty of media attention if and when he speaks publically.

Musk at the PR Steering Wheel

Musk would fall short as the only company mouthpiece, says Fred Lambert, editor in chief at Electrek, who first reported the story. Musk can’t possibly answer even a tiny percentage of inquires himself. He mainly responds to Twitter fans who lavish praise on him.

Tesla’s PR team was just a fraction of PR departments of other major auto companies but received more media inquiries. Still, the PR staff managed to correct many media reports and do a good job in promoting the brand. Helped along by the PR staff, Tesla’s share of voice has been extraordinary considering the small size of the company.  Its hefty press presence stems largely from its innovative technology and Musk’s outsized personality and verbosity. Without a PR department to provide background information and fact-checking, media coverage may shrink. More importantly, accuracy of media coverage will likely deteriorate. That will tarnish brand image and probably infuriate Musk.

“Ignoring the press, and thus the public and customers, which is basically what is happening without a PR department, is only adding to something that most Tesla owners would probably agree was already one of Tesla’s biggest weaknesses: communication,” Lambert says.

 Complaints of Media Coverage

Employees who worked in its PR office have either moved to different positions within Tesla or left the company. But the decision to put the brakes on PR was not an accident.

Some PR pros, journalists and other commentators believe Musk eliminated the PR department because he can’t tolerate media criticism. He’s complained that media coverage of Tesla is unfair and inaccurate even while providing little media access. He complained about coverage of Tesla’s September Battery Day event in a New York Times interview, even though reporters could not ask questions after the presentation.

Tesla’s overseas PR team and its investor relations department remain intact, but reporters will have difficulty writing balanced stories with no one to contact at the company.

“Without giving the automaker an opportunity to respond to a rumor, allegation or whatever it may be, we naturally can’t give you both sides of a story, and it doesn’t give the automaker an opportunity to provide any information,” says Sean Szymkowski at Roadshow. “This is now, apparently, Tesla’s choice.”

Driving with a Blind Spot

“Musk thinks the media doesn’t matter. He’s wrong,” writes Lou Hoffman of the Hoffman Agency. Tesla will continue to get media coverage without a PR department but not necessarily the high-quality stories it wants.

When considering high-cost, complex products like a $75,000 Tesla, consumers rely heavily on earned media mentions and reviews rather than paid promotions. The purchase decision is too monumental to be reached by seeing an advertisement.

“Given Musk’s Jobs-like obsession with quality, you would think they would apply the same thinking to communications,” Hoffman says. “But to borrow from auto vernacular, the man has a blind spot.”

Predict a Return to Standard PR

Tesla will ultimately recharge its PR efforts, write Adam Lashinsky and Aaron Pressman at Fortune. Other fast-growing companies initially paid little attention to the media but eventually built solid PR teams, they say. Google had a standoffish relationship with the media in its early days. Walmart had the barest of PR departments, and Steve Jobs at Apple only talked to selected top-tier publications and ignored the rest.

“It didn’t take long for Google to hire an army of professional publicists, who today are responsive to a fault,” write Lashinsky and Pressman. “Apple under Tim Cook conducts PR like any normal company. Walmart, after taking baby PR steps decades into its existence, does the same.”

Bottom Line: Tesla’s decision to shutter its PR department is a mistake that will accelerate inaccurate and unfavorable media coverage and ultimately harm the brand’s image. It’s only a matter of time before CEO Elon Musk corrects the mistake.