Tesla Branding Case Study
Tesla is often seen as an “overnight success,” but this impression is far from the truth. Over the past five years, consumers have come to know Tesla, giving the impression that it suddenly burst onto the scene. However, Tesla has been in business since 2003. It took them eight years to sell just a few thousand cars. By that time, most of the founders had left, leaving Elon Musk in charge.
In their ninth year, Tesla launched the high-end Model S. Despite its success, they sold only 100,000 cars over the next three years. Tesla’s journey is a perfect example of long-term perseverance.
People Were Discovering Tesla
The launch of the Tesla Model 3 was highly anticipated. Despite the excitement, Tesla struggled to produce enough cars to meet the demand. Everyone wanted a Tesla, but the company couldn’t manufacture them fast enough. From 2015 to 2019, Tesla’s stock price was highly volatile, fluctuating between $40 and $85. In 2020, everything changed. Tesla’s stock soared, increasing tenfold from $85 to over $900. Elon Musk became one of the richest people in the world.
Nearly twenty years after its founding, Tesla has become one of the most beloved brands.
Tesla Brand Strategy
Tesla’s brand strategy can be mapped out using five elements of strategic thinking:
- Vision: Tesla aimed to shift the car market from gas-powered to electric vehicles. While many other electric car companies failed, Tesla’s cars stood out for their high performance and stylish design.
- Focus: Tesla focused on making electric cars that were different from the norm. They broke the stereotype that energy-efficient cars had to be ugly, slow, and constantly in need of charging.
- Identified Opportunity: Tesla saw an opportunity to change the way people thought about electric cars. They capitalized on the growing consumer desire to do something positive for the environment and created a movement around their brand.
- Market Impact: Tesla took a unique approach by starting with high-end cars to build strong brand desirability. They then moved to produce more affordable models to reach a broader audience, although their cars remained premium items.
- Performance Result: Following the release of the Model 3 in 2018, Tesla’s quarterly sales quadrupled over two years, and their stock price increased tenfold.
Tesla’s strategy has not only transformed the car market but also created a powerful brand that people love. Despite the challenges and slow start, Tesla’s commitment to innovation and sustainability has paid off, making it a true success story.
What Tesla Does Best
Tesla stands out by fully committing to electric vehicles (EVs). While other car companies offer EVs as an option, Tesla focuses only on EVs. This is like a vegan preferring a restaurant that only serves vegan food instead of a steakhouse with one vegan dish. Tesla knows that caring for the environment is a lifestyle choice, not just an option. Other car companies often see their electric models as an extra, usually more expensive and less innovative.
Innovative Marketing
Tesla’s marketing is similar to Apple’s. Elon Musk, like Steve Jobs, uses big events to launch products, speaks as a visionary, and constantly challenges norms. His bold and sometimes controversial tweets also add to Tesla’s brand image.
Simplified and Efficient Engineering
Tesla makes its cars simple and efficient, much like Apple’s products. A regular car engine has about 2,000 parts, but a Tesla engine has only about 20 parts. This simplicity helps Tesla control costs and improve efficiency. Tesla also treats its cars like tech gadgets, regularly updating them with new software, much like how Apple updates the iPhone. This means Tesla cars can get better and add new features over time.
Stylish Design
Tesla places a strong emphasis on style, similar to Apple. They know that expensive cars need to look good. Tesla’s sleek and stylish designs make their cars very desirable. This focus on aesthetics has made Tesla a brand that people dream about owning, even teenagers. By creating high demand