Tesla has a key strategy that helped it soar past legacy automakers

Tesla Model 3Timothy Artman/TeslaThe Tesla Model 3.
  • Tesla has always pursued a multi-car strategy.
  • A core value is that those cars are Teslas and therefore must be beautiful.
  • Customers have responded and Tesla has built a brand on aesthetics and technology.

With Tesla struggling to overcome what CEO Elon Musk has described as “production hell” on its lower-priced Model 3 sedan — a meager 260 were built in the third quarter versus more 1,500 predicted — it’s easy to think that Tesla is all about this car and only this car.

But even as Tesla works through its Model 3 bottlenecks, it’s on track to max out its manufacturing capacity for the Model 3’s stablemates, the Model S sedan and the Model X SUV, both high-priced luxury cars. The company could produce more than 100,000 in 2017, setting a record and sending a signal that no matter how long it takes to ramp up the Model 3, Tesla’s car business isn’t going to vanish.

This gives us the opportunity to look back at Tesla overall strategy for launching vehicles. Unlike the crop of electric-car startups that appeared around the same time Tesla did — and later faltered, leaving Tesla as the only game in town — and unlike major automakers that propose exotic concept EVs but never get around to actually marketing them, Tesla has long relied on a multi-vehicle plan.

You can’t do it with one car

Tesla Model STeslaThe Model S.

As it stands, Tesla is a four-car company. That doesn’t sound like much, but it has almost single-handedly validated a global market for electric cars. Before Tesla’s ascent, the idea of a one-car EV maker would have been laughable. One of the cars, the original Roadster, has been discontinued, but eventually Tesla will make good on promises to introduce an updated version, and in any case, the company continues to take care of Roadster owners.

Then there are the Models S, X, and 3. And it’s worth noting that not only does the lineup represent a strategy for developing a meaningful EV market — the cars also look terrific. That’s thanks to Tesla’s design chief, Franz von Holzhausen, who, when he was hired away from Mazda back in 2010, was tasked with “building a world-class design competency at Tesla Motors,” according to the company.

Working with CEO Elon Musk, Tesla product architect and the guy with the multi-vehicle idea, Holzhausen has expressed the strategy in physical terms. If you look at Tesla’s post-Roadster vehicles, they are aesthetically unified and self-reinforcing. The cars aren’t especially flashy, but they do collectively express a Tesla look that’s unmistakable.

This is strategy given beautiful physical form, undergirded by Holzhausen’s obvious belief that less is more. Tesla’s luxury cars aren’t larded with luxury clues — the chrome isn’t laid on with a trowel, the curves and lines are smooth and sleek but not dramatic, and the interiors are subdued.

The Model 3 translates these values into a smaller, less expensive package, proving that it can be translated. Effectively, this ups the “Tesla luxury” aspect of the new vehicle and bolsters its Silicon Valley approach to design, which is informed by technology rather than by fealty to the automaking tradition.

An inverted wow!

Model xTeslaThe Model X.

Most luxury cars and well-designed mass-market vehicles aspire to be handsome, stately, and low-key impressive. The wow! factor is reserved for sports cars and supercars and some big trucks. But Tesla has devised its own inverted wow! factor. Whenever I get to borrow and drive one, I get lots of looks, lots of thumbs-up, lots of questions. This can’t entirely be chalked up to novelty; the Model S has been around since 2012, the Model X since 2015.

Rather, Tesla’s aesthetics embody the company’s futuristic attitude and the carmaker’s embrace of a technological adventure, and people respond to that in a more emotional way that you might expect. They don’t drop their jaws as they would if a Ferrari or Lamborghini rolled by. Instead, they nurture of feeling of respect for Tesla’s nerdy ambition to change the world, but to do it without making their cars look like dreary virtue-mobiles.

This reaction has been key to Tesla’s success, which has far exceeded anything the auto industry anticipated. Tesla has created a club of intensely brand-loyal owners. The aura of that club was instrumental in the unprecedented reveal of the Model 3 in early 2016, after which hundred of thousands of preorders for the vehicle were logged. People wanted to do more than bask in the beauty; they wanted to own it. And they were willing to lay down $US1,000 each for the right to take delivery of their car years later.

None of this would have happened if Tesla’s hadn’t made the design of its cars just as important as their invisible battery-electric engineering that made then go. It’s an incredible achievement that proves the oldest of adages in the industry: If you want them to buy, you have to show them the car.

Tesla didn’t just show the car; it made the showing matter in a new way.

Get the latest Tesla stock price here.

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