Yesterday, we reported on a strange article in which Fortune Magazine tried to make the case that Tesla should have disclosed the fatal Model S accident on Autopilot before raising capital through a secondary offering a few weeks after the fact. The publication claims that the accident was material to Tesla’s stock and therefore, it should have been announced when the company learned of the event and not when NHTSA decided it would launch a preliminary evaluation on June 30.

Elon Musk argued against it being material to Tesla’s valuation in an email to Fortune, but now the publication is somehow trying to use a boilerplate statement from Tesla to prove that Musk and the company previously considered the accident a material event, which is not necessarily the case.

The new article today called ‘Tesla Said an Autopilot Crash Would Be ‘Material’ Before Elon Musk Said It Wasn’t‘ doubled down on the publication’s claim. In this new report, the magazine is claiming that a risk disclosure statement in a recent SEC filing from Tesla is contradicting Musk’s claim that the event is not material to Tesla’s valuation:

“But back in early May, Tesla said exactly the opposite of what its founder is saying now in an SEC filing. The company warned investors that a fatal crash related to its autopilot feature, even a single incident, would be a material event to “our brand, business, prospects, and operating results.” The disclosure said that the company may face product liability claims due to “failures of new technologies that we are pioneering, including autopilot in our vehicles,” adding that “product liability claims could harm our business, prospects, operating results and financial condition.”

Fortune attempts to link the timing of this disclosure to the fatal accident:

“The company made the disclosure on May 10, just three days after the fatal autopilot accident, but likely after the company knew about the crash.”

But this is a boilerplate risk disclosure statement which has been part of Tesla quarterly and annual filings for a long time. It is also in this 10-K filing published on February 24 or months before the accident. Fortune either didn’t know this or conveniently left it out of the article.

Now there’s also a problem on how Fortune is interpreting the disclosure. You can read how Fortune dissected it above, but here’s the disclosure in full:

“Product liability claims could harm our business, prospects, operating results and financial condition. The automobile industry experiences significant product liability claims and we face inherent risk of exposure to claims in the event our vehicles do not perform as expected resulting in personal injury or death. We also may face similar claims related to any misuse or failures of new technologies that we are pioneering, including autopilot in our vehicles and our Tesla Energy products. A successful product liability claim against us with respect to any aspect of our products could require us to pay a substantial monetary award. Our risks in this area are particularly pronounced given the limited number of vehicles and energy storage products delivered to date and limited field experience of our products. “

To link this disclosure to the tragic Model S accident is to claim that the Autopilot didn’t “perform as expected” and caused the crash. Fortune is not claiming that in so many words, but it’s the only way for the description to fit and no one is currently claiming that the Autopilot caused the accident – only that the Autopilot was activated during the accident.

@alansmurray Yes, it was material to you — BS article increased your advertising revenue. Just wasn't material to TSLA, as shown by market. — Elon Musk (@elonmusk) July 5, 2016

It has been discussed and we write about it in detail in our report ‘Understanding the fatal Tesla accident on Autopilot and the NHTSA probe‘, but the Autopilot is not meant to prevent an accident like that one and the driver is responsible for monitoring the vehicle and to be ready to take action at all times. Additionally, The initial accident report from the highway patrol clearly highlights that the truck driver “failed to yield right-of-way.”

NHTSA did launch a preliminary evaluation into the accident, but until the results are made public, it wouldn’t be wise to place the blame on Tesla’s Autopilot and therefore to claim that the risk disclosure statement is contradicting Musk’s claim that the event was not material to Tesla’s valuation.

As we mentioned in our last article on this scuffle between Fortune and Elon Musk, the publication participated in the Koch brothers’ multi-million dollar PR offensive on electric vehicles by providing them sponsored articles in the magazine. It appears to be a huge battle between publications fighting for those big Koch/Oil dollars.

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