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Interesting article, but mostly wrong. The article claims: > The point isn’t to sell a lot of roadsters, it’s creating a brand. > The low production volume al

by gizmo 14y ago

Interesting article, but mostly wrong. The article claims: > The point isn’t to sell a lot of roadsters, it’s creating a brand. > The low production volume also gives the company a chance to learn how to run a car factory on a small scale. So the article claims that the primary reason to start with an expensive sports car is to build a brand, and that technical and practical concerns are less important. This is absolutely 100% wrong. There's absolutely no way Tesla could have started with a mass production car for the general consumer, exactly for the reasons everybody already knows. You have to build a factory. You have to learn from mistakes. You have work out the kinks in the design, and so on. This takes time. The first Tesla model was mostly hand-assembled because that was the only option. As a consequence of that the car model is very expensive and low volume. And as a consequence of that the car has to be a sports car, because the high price low volume model doesn't make sense otherwise. Creating a sports car also makes building a brand easier -- but that's just a nice side benefit. Nothing more. So the article gets the causality wrong.

mixmax 14y ago
I don't claim in the blogpost that technical and practical concerns are less important, on the contrary. I even write that in the article, but maybe it isn't clear enough. My argument is, condensed, that in order to build a mass produced car you need a brand and a factory that will churn out cheap working cars. Since you can't realistically go from 0 to fully working mass production you need to take it in steps. So you start on a small scale with the roadster, step it up with the model S. and so on. Of course the first models were hand assembled, but that's the first step on the long road to mass production. Also, I think you severely underestimate brand value. There's noway Joe average would choose a car he's never heard of instead of a brand he knows. If you look at the statistics it's amazing how many people stick to one brand in cars, without even considering the viable alternatives.
- nickff 14y ago
  If you haven't read "The Innovator's Dilemma" and "The Innovator's Solution", you really should, because the Tesla strategy is straight out of those books.
- gizmo 14y ago
  You certainly do seem to claim that. You say "the point [...] is to create a brand", and a few sentences later you say "also [technical reasons]". That to me looks like a clear distinction between primary and secondary reasons. Secondly, you say that focusing on the brand like this is part of Tesla's "ingenious strategy". However, as I pointed out in the previous post, all of the strategy you covered follows directly from constraints Tesla had. So Tesla's strategy of building a Roadster first is completely straightforward. Tesla does have an ingenious strategy, though. For instance they are working on Free Charging Stations, they have unique showrooms and they are willing to license their technology to some of their competitors. I don't think any of those things are straightforward. So there is a lot to say about Tesla's ingenious strategy, but their expensive-cars-first strategy is not the ingenious part.
incision 14y ago
>So the article claims that the primary reason to start with an expensive sports car is to build a brand, and that technical and practical concerns are less important. I didn't read it that way at all. The writer says it's more important than selling a lot, but it's hardly an exclusive statement. You seem to be reading an awful lot into it. >And as a consequence of that the car has to be a sports car, because the high price low volume model doesn't make sense otherwise. There are other high price/low volume segments in vehicles. >Creating a sports car also makes building a brand easier -- but that's just a nice side benefit. Nothing more. That seems like quite an understatement. They didn't just need to build Tesla as a brand, they needed to build the concept of fully electric vehicles beyond golf carts and buses. >So the article gets the causality wrong. Not really. The article spends 1162 words discussing a number of things, of which branding is just one. You chose to quote just 37 of them and provided your own assumptions to flesh out an argument that doesn't necessarily exist and certainly wasn't the focus of the piece.

by gizmo 14y ago

mixmax 14y ago

I don't claim in the blogpost that technical and practical concerns are less important, on the contrary. I even write that in the article, but maybe it isn't clear enough. My argument is, condensed, that in order to build a mass produced car you need a brand and a factory that will churn out cheap working cars. Since you can't realistically go from 0 to fully working mass production you need to take it in steps. So you start on a small scale with the roadster, step it up with the model S. and so on. Of course the first models were hand assembled, but that's the first step on the long road to mass production. Also, I think you severely underestimate brand value. There's noway Joe average would choose a car he's never heard of instead of a brand he knows. If you look at the statistics it's amazing how many people stick to one brand in cars, without even considering the viable alternatives.

nickff 14y ago
If you haven't read "The Innovator's Dilemma" and "The Innovator's Solution", you really should, because the Tesla strategy is straight out of those books.
gizmo 14y ago
You certainly do seem to claim that. You say "the point [...] is to create a brand", and a few sentences later you say "also [technical reasons]". That to me looks like a clear distinction between primary and secondary reasons. Secondly, you say that focusing on the brand like this is part of Tesla's "ingenious strategy". However, as I pointed out in the previous post, all of the strategy you covered follows directly from constraints Tesla had. So Tesla's strategy of building a Roadster first is completely straightforward. Tesla does have an ingenious strategy, though. For instance they are working on Free Charging Stations, they have unique showrooms and they are willing to license their technology to some of their competitors. I don't think any of those things are straightforward. So there is a lot to say about Tesla's ingenious strategy, but their expensive-cars-first strategy is not the ingenious part.

incision 14y ago

>So the article claims that the primary reason to start with an expensive sports car is to build a brand, and that technical and practical concerns are less important. I didn't read it that way at all. The writer says it's more important than selling a lot, but it's hardly an exclusive statement. You seem to be reading an awful lot into it. >And as a consequence of that the car has to be a sports car, because the high price low volume model doesn't make sense otherwise. There are other high price/low volume segments in vehicles. >Creating a sports car also makes building a brand easier -- but that's just a nice side benefit. Nothing more. That seems like quite an understatement. They didn't just need to build Tesla as a brand, they needed to build the concept of fully electric vehicles beyond golf carts and buses. >So the article gets the causality wrong. Not really. The article spends 1162 words discussing a number of things, of which branding is just one. You chose to quote just 37 of them and provided your own assumptions to flesh out an argument that doesn't necessarily exist and certainly wasn't the focus of the piece.