Thursday, June 14, 2018

The Tesla Brand

Tesla is a wildly popular brand. Today, it's stock is up 1.98%, trading at $351.60 per share despite continuing to return an earnings per share loss. 

So what is behind such a successful brand? First, there is Elon Musk, a highly successful serial entrepreneur. He cofounded Zip2, which was acquired by Compaq for $340 million and Xcom, an online payment company that merged with Confinity to become PayPal. PayPal was purchased by eBay for $1.5 billion. Then there is Tesla and SpaceX and Neuralink and SolarCity and OpenAI and the Boring Company. Behind SpaceX, Tesla and SolarCity is Elon Musk's vision to reduce global warming, create a more sustainable energy future and reduce the risk of human extinction. 

I admire Elon Musk for the following reasons. He has a positive vision for humanity. He is willing to take big risks. He is a successful entrepreneur. He is a great salesperson and marketer. He is also smart and creative about financing. He is an American success story. And what he is doing is good for the world. He demonstrates what I believe America should be all about. He so inspires me that I want to be a part of his continued success. 

I started following Tesla from the very beginning. While I admired its roadster and its Model S, I really couldn't afford either. I vowed to buy the more affordable Model 3 when it came out and I was one of the very first to order it online at 12:01 am on the date it was first available in 2016. I received it two weeks ago. I love it. 

If I am honest with myself and put my consumer behavior hat on, here are the reasons I bought a Tesla:

  • I wanted to support Elon Musk and his vision.
  • I wanted to do my part to reduce carbon emissions and global warming.
  • I really liked the notion of driving a car with an electric engine that goes from 0 to 60 miles per hour in 4.7 seconds.
  • The car definitely has the "cool" factor. The salesperson at the Tesla delivery station warned me that I would be a celebrity for awhile. (Definitely a marketing pitch aimed at status and the ego.) While I have not found that I have achieved celebrity status, I have given 20 friends rides in the car and more are waiting for the opportunity to do so. And lots of people have asked very specific questions about the car. I like being an expert. I also like being perceived to be an early adopter, even if I am only that on occasion.
  • I believe the car says these things about me (whether it does or not): I am progressive. I am environmentally conscious. I have good taste. I am successful. I can afford nice things. So, I believe the car signals a lot about me. And it is an extension of my self image. Frankly, it really feels like "me" to me. While I really enjoyed test driving the Model S, the Model 3 feels even more like "me" because of its elements of pragmatism, value and understatement (relative to the Model S).
  • And here is what makes me love the car (some of which I did not discover until after I took possession of the car, having purchased it sight unseen).  It is really, really fun to drive. It is aesthetically understated and beautiful. I love its lines, inside and out. It is very well conceived and designed. It is functional. There is a larger than average amount of storage space in the front and back trunks. Its user interface is intuitive. With a home garage charger, it is easy to keep its battery mostly charged most of the time. I will never have to fill up at a gas station in the winter again. The sound system is amazing and I love its Pandora-like radio stations. With an all-glass roof and big glass windows it feels expansive and spacious. It has every modern amenity. It has a fully autonomous driving mode. I just absolutely love to drive it.

So, regarding brand benefits, Tesla is delivering at multiple levels - beauty/aesthetics/self-actualization, shared environmental and social values, social status, excitement/fun, comfort and even basic transportation. At least for me, this brand has a winning combination of brand benefits. 

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