• Tesla is planning to build more retail-and-lifestyle focused “Mega Supercharger locations.”
• This might tempt the company to partner with the Amazons and Starbucks of the world.
• That would be a big mistake.
As Tesla expands its Supercharger network, the automaker intends to up its game, building higher-end, retail-rich locations that CEO Elon Musk has called “Mega Superchargers” but that we’ll call just Megachargers.
CEO Elon Musk has speculatively described them as “like really big supercharging locations with a bunch of amenities,” complete with “great restrooms, great food, amenities” and an awesome place to “hang out for half an hour and then be on your way.”
The move makes sense. Superchargers are currently located through the US and other countries, providing the fastest rate of recharging available to Tesla owners. The station can have varying numbers of charging stalls, however, and they aren’t always located in the best areas for passing the time while a Tesla inhales new electrons, although Tesla typically tries to construct them near retail and dining options.
With more Tesla hitting the road in coming years as more and more Model 3 sedans are delivered (Tesla has about 500,000 pre-orders for the car, priced from $US35,000-$US44,000), additional Superchargers will be needed. Creating stand-alone Megachargers that function sort of like Tesla stores would enhance the ownership experience — and open new opportunities to the company.
At Business Insider, when we heard about the Megachargers, a discussion broke out. Should Tesla partner with Amazon or Starbucks to develop these locations, offering great shopping, food, and above all else … coffee?
Bring on the Tesla Brew
I insisted, “NO NO NO!”
There’s no way that Tesla can blow the chance to create its own coffee. They could call it “Elon’s Blend” — bold, complex flavours, with a hint of, um, musk.
In all seriousness, for Tesla to share its Megacharger commerce might sound great, but it wouldn’t fit with the company’s plan to move toward greater vertical integration, owning not just the entire manufacturing process for its cars but also controlling its brand experience from top to bottom.
A recent example of Tesla’s reluctance to partner for the sake of partnering was the announcement that the carmaker could be working on its own streaming service. There are other instances that aren’t as obvious. Tesla’s audio system is an in-house design, a departure from what most luxury automaker do, which is joined with a well-known premium audio brands such as Bose or Bowers & Wilkins.
The company is already focused on building its own vehicle components, ranging from the guts of its cars — the battery packs and drivetrains — to seats and, of course, software. For a huge automaker, this type of integration can be impractical, but at Tesla’s current size, its business model operates more like Ford’s or GM’s did back before World War II, when near-total vertical integration was an advantage.
An end-to-end brand experience
In this respect, I’m using Tesla Brew as a symbolic bit of humour: it’s not entirely logical for Tesla to give away any branding opportunity that bolsters its existing and future owners’ perception that the Tesla experience is unique, self-contained, and dramatically different from what other carmakers are selling.
The Megachargers, if they’re built, are going to have a significant effect on how the overall Tesla experience is enjoyed. At the moment, the Supercharger network is pretty far-flung.
But Tesla wants to locate more fast-charging stations along the routes owners are likely to travel, so you could end up in a nice retail location just as easily as you could an out-of-the-way venue where there isn’t much to do besides consider some fast-food options.
There’s nothing inherently wrong with that, but Tesla is a premium brand and for the most part, presents itself accordingly. You don’t find Tesla stores in odd places; you find them in upscale urban areas.
Tesla has endured its problems, but marketing isn’t one of them. Musk and his team might not yet have delivered 100,000 vehicles in a full year, but they have delivered almost that — with no advertising whatsoever. In the car world, Tesla ranks with Ferrari in terms of its aspirational aspects, and outside the car world, one thinks immediately of Apple. In the retail realm, Starbucks pops to mind, and that in itself is reason enough for Tesla to avoid putting the Green Siren next to its logo at Megacharger locations.
If you’re a little bit cynical about Tesla, you might argue that the company is much better at marketing than it is at the whole car thing, and you’d be right. However, few people get excited about Ford- or Toyota-branded products that aren’t cars, and even Ferrari-branded merchandise isn’t always coveted, something that Ferrari, now a public company, is trying to change.
Tesla is already a luxury, and with an added high-tech, save-the-planet edge to everything. It’s begun the remaking of transportation. It could now be time to remake coffee, too.
Get the latest Tesla stock price here.
Business Insider Emails & Alerts
Site highlights each day to your inbox.