What makes Elon Musk’s Tesla such a Powerful Brand?
Why has Tesla survived and grown its stock value despite its unimpressive financial results?
Why has Tesla survived and grown its stock value despite the financial results? The great level of admiration for the company and its founder plays a big role in the perception of buyers, investors, and the general public. The great quality and design of their products is an industry-standard for electric vehicles.
Just like the famous song, “the sound of silence,” from Paul Simon, you know that a car is a Tesla because of the complete absence of engine noises. While making a 136-billion US dollar name in one of the most competitive industries in the world, Tesla is a synonym of corporate responsibility, environmental awareness, and a search for perfection. It has captivated millions of people who follow the evolution of the company as if it were a soap opera. Tesla has millions of fans without selling a million cars.
What actually makes Tesla stand out as one of the most reputable, reliable and revolutionary brands in history even though the numbers in terms of their economics tell a different story?
This is where the power of the Brand Tesla and The Brand Elon Musk come into play. It is the image and brand that Elon Musk and Tesla have created for themselves as somewhat of a disruptive, revolutionary and futuristic player in the automobile industry that has made them stand out and be the powerful, influential brands they have become.
Right from naming the company, Tesla made sure the world could associate them with the brilliant and eccentric inventor Nikola Tesla. This is where Tesla’s journey of branding itself as a revolutionary and disruptive automobile company started.
What is so appealing about Tesla?
Hundreds of companies have been dismantled or decided to merge after showing the numbers that Tesla presents every year. It is either a miracle or a sign of corporate stubbornness. The truth is that despite their massive losses and average performance according to their quarterly predictions, Tesla is worth more than the biggest car manufacturers on the planet. No other car company can do this; ask Volkswagen after the infamous “dieselgate.”
As of February 2020, Tesla is valued at a staggering $136 billion. The numbers it generates do not justify the $136 valuation. In its most recent financial statements, Tesla reported that it lost $745 million in 2019 and sold only 367,500 vehicles, which is a number in the low end of their estimated target sales for 2019.
At $136 billion, Tesla is worth more than Ford, General Motors and Nissan combined together although, the 3 aforementioned companies sell almost 14 million vehicles annually, a sum that is incomparable with Tesla’s 367,500 for 2019.
The world’s largest automobile conglomerate Volkswagen sells more than 11 million vehicles annually and earned more than $13 billion in 2018. However, it is only valued at $95 billion compared to Tesla’s $136 billion. Hence, you can clearly see what powerful branding can do to a company even when a company’s output is no where near that of the majority of its industry rivals!
Just like Apple, especially in the days of Steve Jobs, people want to know what happens with the company. The public can relate to Tesla’s vision for the future. It is not only about selling cars and making money, but to build cars in a way that pushes innovations and lowers the cost with every model. That is the complete opposite of the automotive industry.
This vision was shared by Musk himself 18 years ago, and it was genius. It embodies the spirit of the company “Our cars are not affordable yet, but soon will.” By making this future directed promise, Tesla gained a massive and trusting fan base who want them to succeed and offer electric cars as a realistic alternative.
While still far the current reality, Tesla is slowly becoming a company of the “people.” The general public believes that Tesla will be able to lower the cost of battery cells and help with climate change. It is an urgent need, and Tesla is leading the way.
The image above clearly shows how Tesla is becoming a company of and for the people with people lining up to put deposits on a new Tesla car in the same manner Apple customers line up for hours to buy Apple Iphones.
What actually makes Tesla so valuable?
As Josh Ong from the Forbes says Tesla is not just an automobile company, instead it’s a ‘Vision for the future’, Tesla and Elon Musk are brands that excite people, give them hope about the future. Both Tesla and Musk have become brands that are known as much for their ideals as for their products.
Furthermore, as Richard Waters from the Financial Times reports that, in keeping with his ideals for a ‘Vision for the future’, Elon Musk’s Space X has recently completed a test that takes it closer to becoming the first private company to take astronauts to into orbit. Again, Space X adds even more power for Elon Musk as a revolutionary, futuristic and disruptive changemaker and all of this adds up in making Musk and Tesla uniquely powerful even without massive profits in terms of sales.
Mostly, Tesla has become a company for and of the people especially with its immaculate customer service, as Musk regularly tweets to users complaints and has created a strong social media presence to the extent that he is probably one of the rare CEO’s of his stature who is also an influencer. This helps in building a credible reputation and gives a more intimate personalised experience for Tesla’s customers, which is one of the reason why Tesla is so popular and is valued at a mammoth $136 billion even though the company spends zero dollars in advertising itself as John Koetsier has stated in Forbes.
Electric cars for every budget
Their plan is appealing to the masses, and although not everybody can afford a Tesla Model S today, the company is working every day to improve technologies and lower the price tag with every new model. Tesla looks forward to becoming an option for middle-class families while saving the planet. They are also very proud of having such a vision, which constitutes a great strategy and an even greater brand.
Even though Tesla has lost a competitive advantage as many manufacturers now offer electric vehicles with a different price range, it is the perception of the public that makes Tesla stocks much more valuable than their equity. As previously mentioned these figures seem to be irrelevant and do not affect either Tesla or Musk. Companies that sell twenty times as many cars and show billions in profits have a lower stock value than Tesla.
Tesla Products brand themselves to combine beauty and performance
Mass production of electric vehicles existed before Tesla. Whether in small volume or poorly designed models, not appealing to buyers. Tesla changed the entire industry by creating beautiful vehicles, with state-of-the-art technology and performance. Instead of making hybrid or electrical versions of their existing vehicles, as a side, not a very profitable business, Tesla is competing with some of the most reputable models hand in hand.
Teslas are not only an option on the market of electrical vehicles; they are now an option on the market of ALL vehicles. Potential clients are now deciding between a fuel-powered Mercedes or BMW or a 100% electrical Tesla.
Elon Musk- The BRAND
The personality of Elon Musk is printed in everything Tesla does. The company uses closeness as a strategy and often, Musk responds to tweets and articles that criticise the brand. A person who is trying to conquer space-traveling does not have time to attend someone uncomfortable with Tesla’s navigation system. However, Musk does. He not only responds but puts a dozen engineers on the matter to resolve it. Some customers have even said that Elon Musk called them on the phone after they tweeted a complaint about the car.
Above are some examples of Elon Musk’s unique Twitter engagement with Tesla customers. This truly gives a unique and more intimate experience to present Tesla customers and potential customers. This helps in creating the Brand Tesla, which is a “Brand for the People”.
Using humour to face the adversities- Another Branding Masterclass
Facing problems immediately and putting a smile on both owners and fans, is part of Tesla’s branding. The company embraces adversity, and while being serious about their engineering challenges, they always have an ingenious and humorous answer for everything. This allows them to create an intimate and personalised experience and connect with their customers much better than what other automobile companies might be doing. Again, all of this allows Tesla to create a powerful brand that is successful without actually having staggering sales successes in reality.
The magic of Elon Musk
On this entrepreneurial revolution, where we are led to believe that, with thriving passion and restless efforts, dreams come true, Elon Musk represents the pinnacle of entrepreneurship. Both Musk and his company are willing to fight an industry that is so consolidated that it runs the decisions of prime ministers and international organisations.
The visionary behind Tesla makes people and investors believe that the present and future of vehicles are in their hands. One of the reasons for the skyrocket valuation of Tesla in the stock market, heavily relies on the fact the Musk is the person behind the company. One cannot co-exist without the other. One cannot succeed without the other.
Aside from Tesla motors, he has disrupted industries such as solar power, artificial intelligence, and even space transportation. He is the ‘Richard Branson’ of the XXI century and seems unstoppable in almost every crazy idea he puts in motion. People like him and trust him in every product and company he wants to transform.
His character, judgment, and unique approach to the corporate world gives hope to investors. Where most companies will suffer catastrophic losses on their stock value, Tesla manages to increase its worth, while showing red numbers for hundreds of millions. The personal brand of Elon Musk, the master disrupter empowers everything he touches.
The story of Tesla and Musk’s success highlights how creating an authentic, powerful and revolutionary brand can help an individual or a company truly stand out in a cutthroat and hyper competitive world. This is why branding and being aware of what branding can do is extremely important. Many people and companies might have the same vision for the future but what holds them back from becoming the next Elon Musk or Tesla is the way they brand themselves (unsuccessfully) or at times even worse they don’t even realise how to brand themselves and fall into the trap of being just another average player in the industry.
The secret to an individual or an organisation becoming the next Tesla, Apple, Elon Musk or Steve Jobs is not a secret anymore- Today’s customers are interested in the way you authentically brand yourself/your company and deliver on your promise. That’s what will help you to become SUCCESFULL.
Learn more about personal branding, authenticity and how to stand out in this crowded world at Imagegroup.
