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What is Tesla really selling? Exploring the Tesla Experience.

What is Tesla really selling? Exploring the Tesla Experience.

7 minute read

Tesla is in the business of selling electric cars, right? Let's dig deeper. An electric car is indeed one of the products you can buy from Tesla. But if that's all you wanted, an electric car, you could buy a cheaper one that would provide you with adequate utility. Yet, consumers aren't willing to wait 3+ years for the Nissan Leaf or Chevrolet Volt to be delivered. Have you heard that Swedish automaker Volvo will only produce hybrid or fully electric vehicles from 2019 onward? Most of us probably haven't.

Have you ever met a Tesla owner? They love their car. They're obsessed with it.

If you took a Nissan Leaf off the market tomorrow, I doubt many drivers would notice even though it is the world's best-selling electric car since 2010. Now imagine Tesla went out of business tomorrow. There would be a huge outcry among a large segment of the population, Tesla drivers and non-drivers alike. Obviously, Tesla drivers would be disappointed that they might not receive servicing, but it's more than that. Have you ever met a Tesla owner? They love their car. They're obsessed with it. They'll go out of their way to pick you up and give you a ride. They'll show off all the gadgets. And how quiet it is. How the car refuels it's batteries while breaking. But other electric cars can do most of this stuff, too. So what's so special about Tesla?

For us unfortunate muggles who don't own a Tesla, the brand still has a meaning. It is desirable. It gives us a sense of hope. Inspiration. A new-age way of doing business. Tesla tells the story of a maverick start-up led by one of today's most admired self-made billionaires who set out to disrupt one of the most powerful established industries. Tesla set out to demonstrate that luxury, sustainability, excitement, and driving belong in the same sentence. Tesla invites consumers to join this elusive group of rebels by selling its brand of attainable luxury, aesthetically pleasing masculinity, and dynamic climate action. Tesla successfully turned itself into a lovemark, which is basically a brand that consumers will make sacrifices for.

So, what makes Tesla different? The Tesla experience reaches beyond the carport. Elon Musk took a page right out of Steve Jobs' marketing book. At the peak of the Steve Jobs era, Apple owners loved their devices for their slick looks, intuitive design, and status appeal. To date, I am envious of how seamlessly Macbook, iPhone, iPad, iPod, iWatch, or AppleTV integrate. The Apple experience is enhanced with futuristic retail stores, world-class service by Geniuses, and proprietary software. In this all-encompassing ecosystem, you're hard-pressed to find many Apple owners complain about anything but the hefty price tag.

 Tesla aspires to become the one-stop shop for the luxury-indulging eco-warrior.

Tesla aspires to become the one-stop shop for the luxury-indulging eco-warrior.

Tesla aspires to become a similar one-stop shop albeit on an exponentially larger scale. In the world envisioned by Elon Musk, you travel down highways lined by Superchargers stations and automatically activate your smart garage door upon turning down your street. You've partnered with SolarCity to retrofit your neighbours' houses with solar shingles that feed into your stack of Powerwalls and allows you to sell excess power into the grid. Of course, you control all this from your mobile device - anywhere, anytime. You'll feel like the king or queen of your castle. You get to stick it to Big Oil and ever-rising utility bills. Now you get to feel good about your investment decisions, show the world that you can indeed make money while saving the planet, and looking damn good while doing so. You have become luxury-indulging, start-up backing, new-age eco-warrior. In a sense, you, the consumer, have become a product of Elon Musk's imagination.

You have become luxury-indulging, start-up backing, new-age eco-warrior. In a sense, you, the consumer, have become a product of Elon Musk's imagination.

As creepy as it may sound, this Big Design thinking is what sets Tesla apart from other inventors and first-movers in the cleantech space. The first electric vehicles were built in the mid-1800s and actually operated at a commercial scale into the early 1900s. Even the Toyota Prius has been in the North American market for nearly 20 years. Solar shingles have been commercially available since 2005 with heavy-weight Dow Chemical entering the market in 2010 and exiting only months before Tesla's grand announcement. Even the Powerwall isn't a ground-breaking invention by any means. Since its launch in 2002, Calgary-based Eguana Technologies has sold more home batteries than Tesla.

These companies all struggled when first entering the market as they sold novel, even revolutionary, products to consumers who didn't know how to incorporate them into their lives. Tesla learned from their challenges and time their market entry better. However, Tesla isn't just selling a line of seamlessly integrating gadgets that are visually more appealing than their competitors'. In another page taken out of the Apple-playbook, Tesla is building a cult around its leader, fueling consumers' desire for technology as a status symbol, and finding a way to fit its products into consumers' lives by re-imagining how we interact with our biggest investments. This is what Tesla is really selling:

The promise that you, the new-age, eco-conscious consumer, can desire and enjoy a holistic, luxurious, and exclusive living experience.

As the likes of Whirlpool and General Electric shift towards smart appliances, as Canadian smart thermostat producers Nest and Ecobee experience tremendous growth, as regulators and utilities are waking up to the idea that the cheapest new source of power is energy efficiency, one could take this a step further and envision Tesla's connected living experience as a platform for a swath of new products and services in a similar fashion to as iOS or Android as the main platforms for any mobile-based offering. Fintechs could offer financial products to grow your income potential through energy production and storage. Consumer goods companies could tailor their offerings based on the usage patterns of your appliances and deliver these right when you walk in your door. Security tech firms could alert you of any suspicious activity in your home while you're away. I'll leave it up to your imagination to envision where your company or next start-up could fit in this brave new world of connected living.

Connected everything.jpg

Please share any idea you may have in the comment section below or feel free to reach out to me in person. I would love to hear your thoughts on my first blog piece. Check back soon for my second take on Tesla. I'll explore whether electric vehicles really are a slam dunk for the environment and profile some cool new technologies from Canadian entrepreneurs. Thanks for reading!


Dam it! Or not?

Dam it! Or not?

Welcome to Phil G's New Economy Blog!

Welcome to Phil G's New Economy Blog!