How will Tesla Position its Luxury all-Electric Car?
Tesla Motors is scheduling an IPO to raise more capital and complete development of an all-electric car that will eventually sell for $50,000. One issue they need to contemplate is how to position the new car in the marketplace that already has a plethora of environmentally friendly hybrid offerings.
While there is no question that an all-electric car is the next step in green automobiles, it will take some deep thought to position the “Model S” in the market. The most obvious positioning attributes will be the environmental impact and stunning performance. For example, the car will accelerate 0-60 MPH in under four seconds. But once this notion is understood, I suspect that Tesla will need to hang their uniqueness on something else. Other automotive companies have been exploring this area, and when they see an indication of strong demand and satisfied customers, they will jump in swiftly, just like the hybrid market today.
The current Tesla 2010 Roadster has a top speed of 125 miles per hour, a range of 245 miles and gets about 3.5 hours on it’s lithium-ion battery. These specs should carry forward to the Model S. But specs are the functional rudiments of a brand, but not enough to own a unique position in any market. Successful, world-class brands are defined by emotional connections that represent compelling ideas. Think about Nike (“Just do It”), Apple (“Think Different”), Microsoft (“Help people…realize their full potential”), or McDonald”s (“I’m Lovin’ It”) as they separate themselves from competitors. It is not by accident that they are market leaders.
Tesla speaks about driving as an exhilarating experience. The question is whether consumers will believe this claim and be willing to shell out $50,000 to have a more environmentally sound exhilaration. This may not be enough for the portion of the mass market they will target. And BMW may already have pre-empted all manufacturers from owning that position with its The Ultimate Driving Machine” proposition. Depends how you define exhilaration.
For the long term Tesla must find a broader and more compelling positioning for the Tesla brand in order to build a large and growing franchise. If they don’t, they will just become another fringe brand, and not reshape automotive transportation as we know it today.