Most of the world knows who Elon Musk is. He has sold flame throwers, underground roads, the hyper loop, and affordable electric cars. Actually, strike that last one. Tesla isn't selling as many of those as it boldly proclaimed it would, and it's lack of growth and sales has made something clear. Tesla has an image problem.
Electric cars have long been considered too expensive and too expensive to bother. Out of all of the attempts made in the field, Tesla has had the best run. However, even despite the lowering of the price for it's model three to a more competitive 35,000.00(USD), there are concerns that the sales for the vehicle has plateaued. Between it's limited manufacturing capacity which limits it's ability to deliver, and it's limited charging points, Elon Musk may be right that it is time for a raise in capital, but analysts may be looking at the wrong issue.
The company needs an aggressive campaign to show why people should buy their cars which are ultimately more expensive to buy, and more inconvenient to run. Instead of focusing on solely the green aspects, they could capitalize on the fact that electricity prices are more stable than gas prices, so it makes for easier budgeting in consumer households.
They could also alter their sales strategy to revolve more around leasing instead of sales which will ultimately boost sales as after a lease the used car will be a more competitive price encouraging more people to buy it .
As more people buy them, more people and places will see the need for charging points in the domestic United States, and as sales pick up and more consumers buy they can use the profits to expand production and lower the price of the Model 3.
The bottom line is that while operational changes have been made at Tesla, two consecutive quarters in the red with slipping share prices has shown more aggressive measures are required to boost investor confidence and sales. Mr. Musk is correct that he needs to raise capital, but I don't think he should put it all towards expanding manufacturing. He can build all the cars he likes, but he needs to change his products image in the minds of the public, and a new pricing strategy combined with an aggressive campaign emphasizing the benefits of owning a Tesla will do just that.
Mr. Musk needs to focus on selling his dream, or it will just another trend come and gone in the automotive industry.
Read the article at the link below:
https://www.wsj.com/articles/tesla-reports-loss-amid-stuggles-delivering-model-3-cars-11556141829?mod=hp_lead_pos6
I like how you showed that this article talks about the promotion, pricing and product aspects of the marketing concept. If Musk works on the brand management and promotion you suggested, the pricing of these cars could be more accessible or less of an issue for consumers.
ReplyDeleteWow you covered a great deal in your blog! Great analysis of the article. Musk pretty much has everything laid out for him. He just needs to execute on the tasks at hand. Brand management and promotion being priority.
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