The original business plan of Tesla automobiles was to rely on word of mouth, innovative design, new product alternatives and not to spend millions on advertisement. Hidden in that business plan was a challenge to the automobile and energy industries to build better sustainable products. The result is producing one of the most profound transformational product innovations in the history of the transportation industry.
The business plan does not prominently address the issue of climate change, even now as the auto industry tries to catch up, there is no marketing by Tesla to compare their product to the new products of the other auto manufacturers. Instead, suddenly there is a tremendous advertising bonus to Tesla in the niche marketing of electric vehicles. Now in play is a time lag in product and infrastructure development. Tesla has every auto manufacturer playing catch up, some by just a few months, others by years of getting products to consumers.
So, for all the nay-sayers and short sellers of Tesla, the old guard automobile industry is spending millions of advertising dollars to persuade us all that we should increase the use and development of electronic vehicles. What a coup! Tesla spends no money to market their product and the competition spends hundreds of million dollars to change attitudes about electric vehicles and increase sales of electric vehicles. This phase of the business plan (whether intended or not) has the auto industry without enough vehicles in production to sell, leaving Tesla in the driver’s seat for the next few years.
Yet it just might not be for the next few years, although Tesla will see a trend in losing market share from their initial 100% of electric vehicles produced to less than 50%. Let us remember Tesla was 100% of the initial zero EV market, but if EV’s are all the autos produced and Tesla falls to 50% of those 7 million annual total auto sales that is an enormous difference in growth of Tesla’s vehicles on the road. Tesla is not only ahead in the short term, but also positioned to thrive for the long term.
Is the business plan brilliant or just lucky? Well, it is such a significant demonstration of revolutionizing a product through innovation, that it borders on genius. Take a social movement for instance in this case climate change, take something an individual can personally do to help, such as buy a car, something that can benefit others, as well as benefiting the air we breathe, the ground we walk on, and the future of the planet. Meanwhile create a product that is of the highest quality, with a vision of being affordable to all, that relies on word of mouth, which is: supported by a new infrastructure of charging stations, that then rides the results of a marketing wave as the rest of an industry tries to catch up. It is a heck of a story, and it is not over yet. Just look at the explosion in in the electrification of our daily lives, electric bikes, electric farm equipment, electric home and garden products, electric planes, trains, and semi-trucks. The possibilities seem endless, generations to come will reap the benefits of the electrification revolution. It is truly remarkable and just might be genius.
