David Sheets
3/31/20
Tesla, Inc: Leading the Charge into the Electric Car Revolution
The Ecosystem
Tesla Inc. has surpassed all electric car companies in sales each year since 2018. You may wonder what separates Tesla’s electric cars from those of its competitors. Specifically, Tesla has an advantage foundationally over competing car companies in that they do not carry the weight of having to create gasoline cars. You can think of this as a head start that Tesla has over competing gasoline car companies that are only recently beginning to create electric cars.
For Tesla, all of their focus and attention is on constructing the best electric car in the market. As Richard Jordan, the President of the Tesla Owners of Connecticut club, put it, “Tesla has built a car from the ground up to be an electric car.”
As Jordan explained, many competing car brands that sell both electric and gas-powered cars are hedging their bets.
“The other car companies are so ingrained in making internal combustion engine car bodies that their building them for dual purpose. If the electric car thing doesn’t pan out, they can still use the bodies to make gas cars,” he said.
“It’s a mindset,” Jordan continued. “It’s just their train of thought, they don’t think of making things super light, more aerodynamic,” he added.
Tesla, from its inception in 2008, is strictly an all-electric automobile company. This means none of their attention in designing vehicles is bogged down by traditional gasoline car considerations.
Richard Jordan referred to it as “the ecosystem” surrounding Tesla as a company. Similar to the reasons consumers are attracted to Apple as a brand, Tesla pulls car owners in with more benefits than just energy efficiency and electricity.
“Not only is it the car that people really like, It’s Tesla as a company,” Jordan said. “They make cars fun to own, the easter eggs, romance mode. The center screen turns into a fireplace and the heat cranks up to 95 degrees.”
“It’s just goofy, stupid shit. It’s the brand, why not have it be fun,” he added.
The Software & Features
It’s not just the goofy shit, either. The fact that the entire car operates on a touchscreen tablet that receives periodic software updates means that the performance and efficiency of your Tesla can improve over time. This is yet another parallel to the atmosphere surrounding Apple products which also receive performance boosting updates to their operating software.
“My car accelerates faster,” Jordan said. “It’s not a placebo effect either, it wasn’t psychological.”
After a software update, Jordan noticed that the car was more responsive to his touch on the accelerator. This makes sense considering these functionalities are determined by the responsiveness of the software in the car. In essence, the Tesla you buy today can improve over time through free, over-the-air software updates.
Professor Kent Golden has also received free performance boosting software updates to his Model 3.
“It is not an exaggeration to say that literally my car is better now than it was two weeks ago, and a year ago. They are continually improving it,” he said.
“It’s weird to think about because we’re used to buying cars that, when you buy it, that’s as good as it’s gonna get. It just degrades after that without an aftermarket upgrade,” he added.
Professor Golden’s Tesla Model 3 has gotten better on a monthly basis since he’s gotten it, including 24 more horsepower added just a few weeks ago. He didn’t have to pay anything for it, he just downloaded an update and now his car has more power.
He also received multiple software updates including features like Self Driving and Smart Summons. So yes, one day his car couldn’t drive itself, the next day it could.
“That’s just part of the experience of owning a Tesla car. They just want it to be the best car possible,” Professor Golden added.
Tesla’s Technological Revolution
“Every once and a while a revolutionary product comes along that changes everything.”
This much was obvious for Steve Jobs as he opened with this remark while unveiling Apple’s first iPhone in 2007. For Jobs, the multi touch glass display on the iPhone and choice to do away with the physical keyboard on smartphones revolutionized personal devices.
Jobs knew he had something special: An innovative take on an existing product at an affordable cost.
The similarities between the beginning of Apple’s iPhone and the emergence of the Tesla electric car are striking. Not only did both companies dive headfirst into industries with bloodthirsty competitors, but they both attacked their rivals from new angles. Both Apple and Tesla lured away consumers with new technologies and affordable benefits that other companies had not yet offered.
It’s becoming increasingly obvious that Tesla, Inc. is emerging as the electric car brand of the future. That much was apparent even before the release of Tesla’s new Cybertruck. The design is oddly simplistic, and yet strikingly futuristic. It’s also controversial.
Twitter users did not hold back on their opinions of the Cybertruck design, with large companies like LEGO even getting in on the trolling.
Yet, Tesla’s intentions with the Cybertruck design may be more well thought out than they seem. A simplistic, mostly metallic, and futuristic look dawns the first Cybertruck. Tesla is trying to make a statement that they represent the future of the electric car, in technology and in design.
The reaction is reminiscent to the initial shock of the design of the first iPhone. Very few buttons, and a software-based operating system controlled by a touchscreen control center.
By catapulting itself into the pickup truck industry, Tesla is entering an entirely new atmosphere with a loyal consumer base. They need a reason to switch from the brands they love. As Tesla may soon find out, now may be a good time to offer something completely new to pickup truck owners.
CarGurus conducted “The 2019 Truck Sentiment Survey” that found that 68% of pickup truck owners believe the vehicles are overpriced, and 70% of pickup truck owners would switch brands if their preferred brand raised truck prices by $10,000.
Additionally, Edmunds data found that there was a 48% increase in price for fully-size, light-duty pickups from 2008 to 2018. The three top selling pickups trucks by Ford, Chevy, and RAM, are all priced over $43,000. To even consider the Tesla Cybertruck, pickup truck owners needed to be wow’d at an affordable price. Starting at a price of $39,900, they got that with the Cybertruck.
Sedan and Crossover owners have also received affordable electric cars from Tesla with the Model S, Model X Crossover, and Model 3. The model three being the most affordable of each starting at $35,000 with a battery range of 240 miles.
Tesla made sure that ditching the gasoline car for one of their all-electric models is affordable whether you drive a sedan, crossover, or pickup truck. According to Experian, one of the big three credit scoring agencies, the average car is now pricedover $34,000 in 2019. This is not far off from the baseline Model 3 Tesla, and there is a strong argument to suggest that purchasing a Tesla will save you additional expenses in the long run.
The Savings & Tesla Supercharger Network
The cost to maintain and charge a Tesla is minimal compared to routinely paying for gas and maintenance in gasoline cars. The U.S. Department of Labor’s U.S. Bureau of Labor Statistics laid this all out in the 2018 Consumer Expenditures. The average gasoline car owner pays $2,109 a year on Gasoline, other fuels, and motor oil. This yearly gasoline expense is far greater than the cost of electricity to charge the Tesla battery. According to PluglessPower.com, driving on electricity is cheaper than gas in all 50 states. Especially when considering that most Tesla owners charge at home where electricity costs are even cheaper than Tesla charge centers.
Even so, the Tesla Supercharger Network pictured below has expanded greatly since its inception, growing from just 8 charging stations in the U.S. in 2013 to 1,130 in 2019. This should alleviate any potential buyers concerns that they may have trouble finding charging stations on long road trips when they can’t charge at home.
Professor Kent Golden from Quinnipiac University owns a 2018 Tesla Model 3 performance version, and can speak to the cost benefits of owning a fully electric car.
“Every year, Tesla owners wind up saving about $1,000 on average, just in fuel savings. Because electricity, especially if you charge at night, is just way less expensive than gasoline. And gasoline is pretty cheap right now,” he said.
Added on to the savings in energy spending is that there’s virtually no maintenance to the car either. “There’s no oil changes, there’s no radiator fluid, there’s no belts, no pulleys. There’s none of that stuff that goes wrong with an internal combustion engine,” Professor Golden added.
Richard Jordan, the President of the Tesla Owner’s of Connecticut Club, has had a Model S for nearly six years and loves the savings in electricity cost, but he also appreciates escaping the chore of going to get gas every week.
“It’s the chore of having to do it. Right now, what is it, 15 degrees outside? Right now my cars charging in the garage. You come home, you plug in and scurry inside. The car will take care of itself,” Jordan said.
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There’s a common thread here intertwined between Tesla and Apple. Both are ambitious technological companies pushing the boundaries of their products and creating new norms.
Tesla is far ahead of its electric car competition for more reasons than just energy efficiency. The brand as a whole is well-rounded, dynamic, and fun to be a part of. Owning a Tesla is similar to owning an Apple product in that it is a personalized, high tech product pioneering an evolving technological revolution that’s taking place on roadways everywhere rather than in our hands.
The unveiling of the design of the Tesla Cybertruck prove that Tesla as a brand is self-aware. They know that they are the future of the car industry, which is why they made a design so strikingly futuristic in its nature.
What is yet to be determined is whether or not competing car brands will ever be able to offer not only a similar product, but a similar attraction to their brand that consumers have to Tesla. Comparable to the pull that iPhone’s have over android, Tesla may have already accelerated too far ahead of their competition to ever be caught. Considering the Cybertruck accelerates faster than a Porsche 911, this wouldn’t be surprising in the least.
David Sheets ICM 513 Content Strategy 