Tesla is by far one of the most successful companies in modern history. They popularized fully electric cars and created a sustainable energy revolution!
In this case study, we are going to discuss-
- How Tesla disrupted the automotive industry and became the world’s most valuable car maker?
Let’s dive deep into it-
Commander-in-chief
If Barack Obama won the US presidency in 2008 on the audacity of hope, then Elon Musk has built his career on the audacity of hype. The fast-tweeting, pot-smoking, rocket-launching new age entrepreneur is not just selling cars but a ticket to the future!
Elon has garnered a cult-like fan following over the years. People think of him like an alien who is here to rescue this planet! (PS: I’m one of them :P)
When the leader is so famous, the company gets a lot of fanfare which never hurts, eh?
I had so much to write about Elon that I made a separate case study on him, check it out – https://getontrack.in/2020/05/12/elon-musk/
Cars
A Tesla is exactly what people in the 80s thought a car in 2020 would look like.
It’s futuristic, runs on electricity, provides complete safety, makes no noise, and is crazy fast.
And, when all of this comes wrapped in a super cool car like the Cybertruck, what more would anyone want?
Teslas are state-of-an-art and as tech-savvy as one can get. A Tesla car is a tech product as much as a car. It gets better with regular software updates. So, in a way, Tesla appreciates over time, this makes buying a Tesla even more lucrative! This is in contrast to gasoline cars that lose their value heavily over time!
Consider a Tesla as an iPhone on wheels, who would prefer a tin can over it?
Also, features like Summon, Ludicrous mode, and Autopilot just make people go gaga! These features might not be of use to many people but they sure make Teslas super cool and appeal to their audience(young adults)! The internet is filled with people going crazy about these wild Tesla features! These features become a talking point in the Tesla fan community and people eagerly wait for updates!
For any company, having something that their customers can talk about endlessly is very important as you always want to keep the buzz around your products alive!
Also, do you know that the new Tesla Roadster will be the fastest production car ever made! This is a galactic nut kick to the makers of gas-fed hypercars who have been trying to out-race each other for decades. And, Tesla just came and left all of them in the dust!
As of now, the only thing that remains in favor of gasoline cars is their starting price! The cheapest gasoline car in the world costs around $3500! (Tesla Model 3 starts at $39,990)
Branding
In my opinion, Tesla is the only company that has the potential of becoming a bigger brand than Apple!
Tesla has branded itself as a company of the future which is here to make this planet a better place to live! Tesla is not just a car company, it’s a step towards the world’s transition to sustainable energy. When a product is aligned with values that people associate with, the brand develops a cult following.
Tesla’s greatest tool is its hype machine, it shows people a dream (next car) and then makes that dream a reality (car living up to its expectations). As a result, one after another, with each product launch, the hype around Tesla products keeps on increasing exponentially.
People get excited about Tesla’s product launches as they would get for Apple’s product launches.
Just like the case of Apple, where people are not looking to buy a smartphone, they are looking to buy an iPhone. EV enthusiasts are not looking to buy an EV, they are looking to buy a Tesla!
Do you know? Model 3 had ‘biggest one-week launch of any product ever’, 325,000 reservations for a new car in the first week.
Tesla as a brand has positioned itself in such a way that when other companies launch an EV, they are trying to compete with Tesla. The equation here is not “Tesla against all car companies”, it’s “all car companies against Tesla”. And, when a new company shows some future EV promise, it’s labeled a “Tesla killer”.
We have to understand that when a whole industry is trying to compete with one company, that company has already won! This generally happens in the case of industry creators. Apple created its own industry, thanks to Steve Jobs. And, so did Tesla!
So the first mover’s advantage will always be on their side!
I wonder if, in the future, when we’re old and Elon Musk is dead and the company is passed on to someone else if it will turn into a “luxury brand” and ride on the glory of Elon Musk by overcharging its products without any new innovations. Sorry, Tim cook.
I really hope Elon Musk comes out and says he’s not human and is immortal!
Please, I don’t want to see the same thing that’s happening to Apple, happen to Tesla!
Strategy
Reputation first, Profit second. Tesla’s mission is to accelerate the world’s transition to sustainable energy And to achieve this, Tesla came out with a very simple strategy –
- Change the preconceived picture of an EV from boring, ugly, and slow to Cool, sexy, and super fast!
- Prove that EV can not only compete with gasoline but also beat it in every possible domain!
- Make gasoline cars obsolete, disrupt the whole automotive industry and create a sustainable energy revolution!
1997 General Motors EV1 
1997 General Motors EV1
Tesla launched the Roadster(2008), a high-performance, premium, and sexy electric sports car to break the “mass EV image”(slow, boring and ugly) which was created by cars like the GM EV1. This allowed them to pave a path for future electric vehicles by showing that EVs can be something completely different than what people think.
The Roadster(2008) was capable of doing 0-60mph in 3.7 seconds with a 245 miles range on a full charge! Though successful in all those aspects, it wasn’t the car that Tesla could use to prove that they were going against the proven big guns in the global automotive world.
To prove that, came Tesla model S and X.
Model S and X did not just compete with the best, they beat the best, even the ones with double, triple the price tag! This was very important for Tesla as living up to the expectations is what keeps the hype going! And, when it comes to Tesla, the hype train must keep going!
Also, thanks to Franz von Holzhausen, the chief designer at Tesla, Tesla cars were made to look a bit conventional so that people can associate with them.
Wait, not you, Cybertruck!
But, with a starting price of $69,420 and $79,990, Model S and X were not mass-market vehicles! For Tesla to disrupt the whole industry, it had to appeal to the masses!
Here comes Tesla Model 3!
The only way to disrupt the whole industry was to attack at its heart, the $35,000-$50,000 segment.
This is where the main market lies. Tesla knew if they conquered this segment, everything else will fall in place!
With a starting price of $39,990, 0-60mph in 3.1s, 353mile range, Model 3 lived up to all the expectations and the result?
Tesla was once mocked by the whole world. Electric cars against gasoline, are you kidding me?
But, started from the bottom now we here! Now, every major car manufacturer sees Tesla as a big threat and EV’s as an inevitable phenomenon!
Tesla has successfully disrupted the whole industry, created a sustainable energy revolution, and proved that EV’s are the future!
“First they ignore you, then they laugh at you, then they fight you, then you win!”
Mahatma Gandhi
Human Resource
“It’s not the tools you have faith in, tools are just tools, they work, or they don’t work. It’s the people you have faith in or not.”
~Steve Jobs, Apple
An organization is only as good as its employees. And when we talk about Tesla, the employees are the best any organization can get!
Tesla is a hot-spot for young job seekers. People want to be at Tesla because they want to make a change, they want to work at a company where their work can make an impact.
An opportunity to work at Tesla makes youngsters jump out of their skin because Tesla embraces innovation far more than any traditional automaker. It has become an ideal workplace for engineers who are hungry to explore their limits!
A job at Tesla is known to be very demanding, It’s a big company but it still works like a startup.
Where legacy automakers try to keep the company structure heavily segregated. Musk encourages blurry lines between departments. Meetings are informal, engineers communicate freely. Each employee is encouraged to think like the chief engineer/designer and view the product as a whole.
Anusha Atluri, a second-year M.B.A. student at Carnegie Mellon University’s Tepper School of Business, spent the summer as an intern on Tesla’s Model 3 assembly line in Fremont. Partway through the summer, Ms. Atluri spotted a way to tweak a step in the manufacturing line that she thought might speed up production. She put together a PowerPoint presentation for the rest of the team and, encouraged by the response, she suggested following up the next week with management to discuss implementing the change.
“They were like, why not just try it tomorrow?” she said. The process changed the next day, and within a week the line was running more efficiently, she said. (Source: https://www.wsj.com/articles/tesla-is-the-hot-spot-for-young-job-seekers-1543150801)
When an intern suggests a change and it gets implemented overnight, why would anyone want to work anywhere else? When a company cares about what you have to offer, when your opinion matters, you are elated, you feel good!
This is in contrast to any major company where you have to go through a long process before anything new gets implemented as radical ideas create risk.
Employees are willing to work 100-hour weeks because they share the company’s vision and are excited to work towards it. This intense work culture is actually among the reasons why many applicants consider the electric car maker as an attractive place of employment, as revealed by data from Handshake.
When you have thousands of people working together for hours every day to achieve a shared goal, that’s when a company makes a revolution, that’s when a company makes an impact! That’s when you pull off a Tesla!
Read Elon’s mail to Tesla employees asking them to work harder than ever!
“If you have two boxers of equal ability and one’s much smaller, the big guy’s going to crush the little guy, obviously. So the little guy better have a heck of a lot more skill. That is why our standards are high…They’re high because if they’re not high, we will die.”
Elon Musk
This is only part 1 of the Tesla case study!
Continue reading Part 2. Don’t miss it, it’s even better!
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What is your opinion about Tesla, tell us in the comments section!
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Way cool! Some extremely valid points! I appreciate you writing this write-up and the rest of the website is also very good. Marilyn Jonah Gamages
You produce quality content, congratulations on this
You produce quality content, congratulations on this