Tesla: 4 Reasons Why It’s Ahead of Its Time
By: Tej Sharma
Tags: Unique, Auto Industry, Innovative, Tesla, Software

Tesla, Tesla, Tesla. It seems as if this is all anyone has heard over the past few years. Now, why is that?

Source: New York Times

What if, right now, you were asked to pick your ideal dream car? Your answer would probably be a Lamborghini, Ferrari, or any of the other luxury car brands we’re so used to hearing.

But, is it fathomable that many of us would answer — Tesla? According to a study conducted by AutoWise analyzing Twitter data to see which cars Americans most often described as the vehicles of their dream, the Tesla Model S was the desired “dream car” for drivers in 20 states.

With a Tesla, you get so much more than just a car — you get an experience. So what makes them different? It all boils down to the company’s innovative business model. Through an analysis of their business model, it is evident that Tesla is doing at least four things better than competing automakers.

Value Creation for Customers

First and foremost, Tesla’s approach to building cars is to develop software on unique hardware. This allows the company to continually improve on its cars’ software as necessary and brings many new innovative functionality and features to the car. This is why Telsa is often compared more to Google or Amazon than a traditional automaker. This software-centric business model is in direct contrast to the conventional auto industry model, where the product is the same from the moment you buy it.

The real undisputed benefit, however, is that driving a Tesla means no more expensive gas. With 100 miles using 34kWh (about 100 MPG) and electricity costing an average of $0.12/kWh, the yearly cost to drive a Tesla Model S 15,000 miles is $612. Compare that to the Toyota Camry and an average gas price of $2.40 per gallon. At 15,000 miles per year, the Camry will cost $1,200 — almost double what the Tesla Model S costs.

Not only this, but standard cars depreciate the second they leave the lot. According to a recent study, the Tesla Model 3 retains almost 90% of its value over three years, which is inherently better than the 48% value retention, which is seen on average in other electric vehicles.

Furthermore, by charging your car electrically, you can have your car ready to go each morning and never have to stop again to refuel at the gas station. Forget standing in the cold or smelling gasoline fumes — it is as simple as plugging in your car the night before and unplugging it in the morning with a full battery.

Simplistic Buying Process

Without a doubt, buying a Tesla is not like buying other cars. Although there are Tesla stores, they are not dealerships. There is no office to sit down and wait for a salesperson to negotiate pricing like you’re familiar with.

Instead of selling you the car, Tesla Stores simply exist to give customers a place to see sample vehicles and get more information. This format entirely removes the stereotypical sales-pitch that often comes with a car dealership; the employees working in the Tesla stores are not trying to sell you a vehicle — they’re there to educate you.

Having a place to educate consumers about Tesla vehicles is useful, especially in an ever-changing auto industry. With hybrid and electric vehicles moving toward the forefront, more and more people seek information on how they work and the benefits of driving one.

The process to purchase a Tesla is simple. It starts by visiting their website, picking your desired model, selecting your desired add on features, placing your deposit, and finally scheduling a pickup for the car. It’s almost as simple as purchasing any other product online.

Social Media Based Marketing

Over 95% of consumers looking to buy a car use digital channels to research automobiles. Social media is the most popular and effective medium for consumers to discover reviews and the opinions of peers and influencers. It is used as a virtual showroom where you can see the latest products on the market and what’s on the horizon.

Tesla has mastered this marketing medium through its CEO, Elon Musk. Although Tesla does advertise in the conventional sense, more awareness is brought to the company through Musk. When he is not teaming up with Youtube Star PewDiePie to host his Meme Review and rating memes with Justin Roiland — co-creator of Rick and Morty, he is constantly interacting with the community, primarily through Twitter. Through this, not only does Musk present his opinion and views, but he also provides updates about his companies directly to the community.

This approach does not always work as CEOs are still hesitant about using social media for business because they have to choose their words carefully and avoid controversy. However, this method appears to work for Elon Musk as it allows people to buy into his vision of the future. Whether it’s eco-friendly electric cars, smart solar panels, smart batteries, or private space exploration, he has mastered a medium to spark intrigue and innovation in a world dominated by social media.

Mission Statement

As follows, Tesla’s mission statement is to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible. Tesla has attached themselves to going green to reduce global warming, which already presents them with an inherently broader demographic than the standard gasoline automaker.

Through this, customers are incentivized to own a car that creates no pollution, eliminates visits to gas stations, and is truly green. To stay competitive in their industry, traditional automakers have started to provide similar alternatives. These alternatives are seen through a growing range of electric vehicles — while these are not necessarily software vehicles like Tesla — usually the cars you’re used to, but fitted with electric motors.

There is so much more to talk about when it comes to Tesla as they are such a unique and cutting-edge company, but these four main things are essential to Tesla’s innovative business model. It’s safe to say that these four factors have contributed well to Tesla’s outstanding success these past few years.