Tesla CEO Says Sales Staff E-Mail Was ‘Overzealous’

Elon Musk, the billionaire who leads Tesla Motors Inc. (TSLA), called an e-mail sent by his sales staff last month “overzealous” and said the wording wasn’t approved by the electric-car maker.

Customers who reserved a Model S sedan and hadn’t completed the purchase got the e-mail in March encouraging them to do so, according to a copy obtained by Bloomberg News. The message said that completing orders would help Palo Alto, California-based Tesla reach a “huge company milestone” by attaining its first profit in the quarter.

The 10-year-old carmaker said March 31 it reached a long- sought goal of turning a profit, causing the shares to soar 16 percent on April 1 and reach a record closing high of $44.34 the next day. The e-mail didn’t affect Tesla’s higher-than-forecast sales and profit, he said.

“Some of our sales folks got a little overzealous and sent out the e-mail,” Musk, Tesla’s chief executive officer, said yesterday in a telephone interview. “As soon as I found out, I put an immediate stop to it. That is not how Tesla operates.”

Tesla booked first-quarter sales of more than 4,750 Model S electric cars. No sale was counted until a vehicle was paid for, delivered and the paperwork filed, Musk said.

“All three of those things must be true,” Musk said. “We had a clear, clean victory in Q1 and I don’t want to sully that with any sense that it was juiced in some way.”

The company named for inventor Nikola Tesla plans to deliver at least 20,000 Model S cars this year. Musk, 41 and Tesla’s largest investor, said people may have gotten the impression “that we were booking vehicles as sold that were not actually sold.”

What Counts

“The only thing that counts is if we’ve sent them the car,” he said. “We are literally bending over backwards and twisting ourselves into a pretzel to make sure that every sale is legitimate.”

North American customers are waiting as little as “two to three months” for their cars, Musk said. That’s less than the current average of five months, including international customers, he said.

Current production is only for U.S. buyers, with assembly for Europe and Asia set for later this year, he said.

The company this week announced a lease-style financing offer intended to boost Model S demand, with Wells Fargo & Co. (WFC) and U.S. Bancorp (USB) providing qualified customers with 10 percent of the purchase price and the automaker guaranteeing a minimum resale value after three years. The cars are priced, before a $7,500 U.S. tax credit, from $69,900 for a version with a 60- kilowatt-hour battery pack to more than $100,000 for a high-end sedan with a larger pack for more range.

Tesla fell 1.5 percent to $41.37 at the close in New York. The shares have gained 22 percent this year, topping a 9.1 percent rise in the Russell 1000 Index.

To contact the reporters on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editor responsible for this story: Bill Koenig at wkoenig@bloomberg.net

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