
Okay, I’m going to be honest right up front — I admire the company Tesla and love its cars. I’m thrilled by the sleek, sexy design and quiet operation of the Tesla Model S each time I see one on the road. From the day their first car was announced to today, I believe they have done a lot of things right from both a product and corporate perspective. As of September 2014 the stock is up over 60% year to date, so the market appears to believe so too. I don’t own a Tesla yet, but I will. What’s just as interesting to me, however, is their brand — what it stands for and who carries the torch.
Every time I think about Tesla the company, the brand attributes that come to mind are bold, cutting edge, not backing down, revolutionary in both design and creating change in the world — and this is all because of CEO Elon Musk. In a TED February 2013 interview, he says what drives him is, “what are the things that need to happen to make the future an exciting and inspiring one?” And this vision rubs off on the Tesla brand. Whether by design or by chance, Elon Musk has become Tesla’s brand warrior, and like a knight defending the fair lady, he is true to his mission and never backs down. He defends, protects, and represents the brand at every turn, and does so in a way that is consistent with Tesla’s values and mission.
According to Tesla, their goal is to accelerate the world's transition to electric mobility with a full range of increasingly affordable electric cars. It’s a big statement that requires progress on many fronts in order to come to fruition. There are technical, political, eco-system, scale, cost and adoption issues to name just a few. In a gutsy but shrewd business move that is consistent with the brand, a step toward adoption and eco-system took place in June of this year, when Tesla announced that they would not initiate patent lawsuits against anyone who, in good faith, wants to use their technology. In Musk’s blog post of June 12, 2014 he writes, “Tesla Motors was created to accelerate the advent of sustainable transport. If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal.” Peter Thiel, Musk’s PayPal co-founder, has a mantra: that tech should be more ambitious and solve big problems. I would say that Elon Musk feels the same and makes this the touchstone of the Tesla brand.
In 2013 there was a good deal of negative press from automobile publications to the tech press, about the Model S sedan bursting into flames after running over debris. Without missing a beat, Musk jumped to defend the company and car, and to rectify the situation. In an October 2013 TechCrunch article, Musk quotes statistics that he says point to the fact that you are 5 times more likely to experience a fire in a gas-powered car than a Tesla. His supporting math consists of the following data — over 150,000 car fires per year for gasoline powered vehicles, which means one vehicle fire for every 20 million miles, as opposed to one fire in over 100 million miles driven for Teslas. This equates to the “5x” figure. He refused to grovel or back down, and instead relied upon facts and stood his ground. Tesla also adjusted the air suspension so that the cars do not automatically lower themselves as much at highway speeds. Now all Teslas are outfitted with a triple underbody shield and Musk committed that Tesla would, upon request or as part of normally scheduled auto service, retrofit the shields, free of charge.
Musk is also battling hard on a few other fronts:
Distribution — There is resistance in some states to Tesla selling its cars directly to consumers through its company-owned stores rather than through independently-owned dealerships. Tesla has faced dealer issues in Georgia, New York, New Jersey, Pennsylvania, Ohio and Missouri where the respective Automobile Dealers Associations have appealed to state authorities to prohibit Tesla’s initiatives to offer direct sales of new cars outside dealer networks. Musk is defending Tesla’s position with vigor to overcome this direct sales obstacle.
The Model S battery's cold-weather performance — New York Times' John Broder criticized the vehicle battery's cold-weather performance, which he said resulted in the car being towed after it ran out of juice. Once again, Musk was the public face and Tesla produced vehicle logs disputing Broder's account, which the New York Times eventually acknowledged. Broder's trip also was recreated several times without any issues.
Romney and Palin — They called Tesla a “loser” for taking a $465 million dollar loan from the Department of Energy in 2010. Musk didn’t forget the slight and Tesla paid off its DOE loan with interest last year.
Scale — In order for Tesla to fulfill the vision of “carrying the species beyond hydrocarbon reliance” they need to be able to build batteries for a large volume of cars. In a brilliant move Musk induced 5 states (CA, NV, TX, AZ, NM) to vie for the hosting of a $5 billion “Gigafactory” that will make lithium ion batteries for Tesla's all-electric automobiles. We now know that McCarran, NV is the winner. The pay-to-play opportunity expects the chosen state to absorb about 10% of the cost of building the factory, along with providing tax breaks and incentives, in return for a multi-billion dollar investment and the creation of around 6,500 manufacturing jobs.
Musk kept the pressure on the bidding states throughout the process. In order to keep the construction timeline on target while continuing to entertain bids from CA, TX, NM and AZ, Musk quietly directed Tesla to break ground in June in three separate sites in NV. It would appear that Musk had already concluded that NV was going to be the final choice given the financial incentive package NV was offering compared to the other states.
In addition to providing scalability for Tesla’s auto manufacturing needs, the Gigafactory supports three other Musk strategies: (1) It removes dependency on overseas suppliers for a critical (indeed, probably the most critical) component for Tesla vehicles; (2) it enables Tesla to supply state-of-the-art batteries to other electric vehicle makers, breaking down a major barrier to his vision of broadening and diversifying the EV market; (3) it creates a supplementary revenue stream for Tesla, potentially subsidizing vehicle prices to increase demand for their electric vehicles. (There may also be a role for Gigafactory products and technology in offline power storage related to services provided by SolarCity, another Musk enterprise.) This kind of integration provides the Tesla brand more visibility and a broader reach.
Musk’s actions are bold, his profile grows larger every day, and his persona is intertwined with and defines the Tesla brand. In a 2012 Esquire article, Elon Musk is described as “A rich man trying to inspire a change in national consciousness. It is not enough for him to inspire Americans; he needs somehow to stand for them — to stand for more than himself — if he wants to restore this country's explorer's heart, its willingness to endure risk.”
Elon is a man betting on and creating the future, and Tesla is coming with him.
Every time I think about Tesla the company, the brand attributes that come to mind are bold, cutting edge, not backing down, revolutionary in both design and creating change in the world — and this is all because of CEO Elon Musk. In a TED February 2013 interview, he says what drives him is, “what are the things that need to happen to make the future an exciting and inspiring one?” And this vision rubs off on the Tesla brand. Whether by design or by chance, Elon Musk has become Tesla’s brand warrior, and like a knight defending the fair lady, he is true to his mission and never backs down. He defends, protects, and represents the brand at every turn, and does so in a way that is consistent with Tesla’s values and mission.
According to Tesla, their goal is to accelerate the world's transition to electric mobility with a full range of increasingly affordable electric cars. It’s a big statement that requires progress on many fronts in order to come to fruition. There are technical, political, eco-system, scale, cost and adoption issues to name just a few. In a gutsy but shrewd business move that is consistent with the brand, a step toward adoption and eco-system took place in June of this year, when Tesla announced that they would not initiate patent lawsuits against anyone who, in good faith, wants to use their technology. In Musk’s blog post of June 12, 2014 he writes, “Tesla Motors was created to accelerate the advent of sustainable transport. If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal.” Peter Thiel, Musk’s PayPal co-founder, has a mantra: that tech should be more ambitious and solve big problems. I would say that Elon Musk feels the same and makes this the touchstone of the Tesla brand.
In 2013 there was a good deal of negative press from automobile publications to the tech press, about the Model S sedan bursting into flames after running over debris. Without missing a beat, Musk jumped to defend the company and car, and to rectify the situation. In an October 2013 TechCrunch article, Musk quotes statistics that he says point to the fact that you are 5 times more likely to experience a fire in a gas-powered car than a Tesla. His supporting math consists of the following data — over 150,000 car fires per year for gasoline powered vehicles, which means one vehicle fire for every 20 million miles, as opposed to one fire in over 100 million miles driven for Teslas. This equates to the “5x” figure. He refused to grovel or back down, and instead relied upon facts and stood his ground. Tesla also adjusted the air suspension so that the cars do not automatically lower themselves as much at highway speeds. Now all Teslas are outfitted with a triple underbody shield and Musk committed that Tesla would, upon request or as part of normally scheduled auto service, retrofit the shields, free of charge.
Musk is also battling hard on a few other fronts:
Distribution — There is resistance in some states to Tesla selling its cars directly to consumers through its company-owned stores rather than through independently-owned dealerships. Tesla has faced dealer issues in Georgia, New York, New Jersey, Pennsylvania, Ohio and Missouri where the respective Automobile Dealers Associations have appealed to state authorities to prohibit Tesla’s initiatives to offer direct sales of new cars outside dealer networks. Musk is defending Tesla’s position with vigor to overcome this direct sales obstacle.
The Model S battery's cold-weather performance — New York Times' John Broder criticized the vehicle battery's cold-weather performance, which he said resulted in the car being towed after it ran out of juice. Once again, Musk was the public face and Tesla produced vehicle logs disputing Broder's account, which the New York Times eventually acknowledged. Broder's trip also was recreated several times without any issues.
Romney and Palin — They called Tesla a “loser” for taking a $465 million dollar loan from the Department of Energy in 2010. Musk didn’t forget the slight and Tesla paid off its DOE loan with interest last year.
Scale — In order for Tesla to fulfill the vision of “carrying the species beyond hydrocarbon reliance” they need to be able to build batteries for a large volume of cars. In a brilliant move Musk induced 5 states (CA, NV, TX, AZ, NM) to vie for the hosting of a $5 billion “Gigafactory” that will make lithium ion batteries for Tesla's all-electric automobiles. We now know that McCarran, NV is the winner. The pay-to-play opportunity expects the chosen state to absorb about 10% of the cost of building the factory, along with providing tax breaks and incentives, in return for a multi-billion dollar investment and the creation of around 6,500 manufacturing jobs.
Musk kept the pressure on the bidding states throughout the process. In order to keep the construction timeline on target while continuing to entertain bids from CA, TX, NM and AZ, Musk quietly directed Tesla to break ground in June in three separate sites in NV. It would appear that Musk had already concluded that NV was going to be the final choice given the financial incentive package NV was offering compared to the other states.
In addition to providing scalability for Tesla’s auto manufacturing needs, the Gigafactory supports three other Musk strategies: (1) It removes dependency on overseas suppliers for a critical (indeed, probably the most critical) component for Tesla vehicles; (2) it enables Tesla to supply state-of-the-art batteries to other electric vehicle makers, breaking down a major barrier to his vision of broadening and diversifying the EV market; (3) it creates a supplementary revenue stream for Tesla, potentially subsidizing vehicle prices to increase demand for their electric vehicles. (There may also be a role for Gigafactory products and technology in offline power storage related to services provided by SolarCity, another Musk enterprise.) This kind of integration provides the Tesla brand more visibility and a broader reach.
Musk’s actions are bold, his profile grows larger every day, and his persona is intertwined with and defines the Tesla brand. In a 2012 Esquire article, Elon Musk is described as “A rich man trying to inspire a change in national consciousness. It is not enough for him to inspire Americans; he needs somehow to stand for them — to stand for more than himself — if he wants to restore this country's explorer's heart, its willingness to endure risk.”
Elon is a man betting on and creating the future, and Tesla is coming with him.