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Tesla’s Model 3 launch: Brand boost or brand blunder?

by | Jul 27, 2017 | Analysis, Public Relations

All eyes are on Tesla this week as the first batch of its much-anticipated Model 3 rolls out. While the car’s $35,000 price tag promises to expand Tesla’s mainstream appeal, it remains to be seen whether the automaker’s big bet on the Model 3 will be a turbo boost for the brand (and the larger electric car segment), or a disappointing moonshot for a company that has struggled to achieve profitability.

Much more than the advent of a new car, Tesla’s introduction of the Model 3 will be a bellwether for how the company expands its brand and fosters customer loyalty going forward.

With so much at stake, Tesla could have spun off the Model 3 as a subset of its brand, much the same way Toyota launched Lexus as a luxury alternative to Camrys and Corollas. Doing so would have kept Tesla’s high-end persona intact while shielding the company from the threat of a launch gone bad. Instead, they’re betting the house on a smooth launch.

It’s a risky move. Tesla’s early models suffered from software glitches and spotty manufacturing quality, but the small number of cars on the road meant those problems were isolated. Now that Tesla is going mainstream, the pressure is on.

The Model 3’s reliability, battery range and technology will all be under the microscope from day one, along with a charging network that will suddenly be in high demand. Missed expectations could end up thwarting Tesla’s plans for new products like electric vans and trucks, not to mention hurting its stock price.

Complicating the matter for Tesla is the fact that its technology is relatively new, leading consumers, investors and the news media to rightfully hold the company to a higher standard.

We’ve seen this play out in the wake of crashes involving Tesla cars. While a minor accident involving any other make would go relatively unnoticed, the news coverage surrounding Tesla incidents is amplified and share prices react, as we saw earlier this month following a crash in Minnesota.

Even so, nearly 500,000 buyers have taken a leap of faith by putting down $1,000 deposits on the Model 3. The irony is that these early adopters have been kept in the dark ever since reserving their vehicles. Tesla could have been harnessing consumer excitement among these buyers over the past year, but instead they’ve left them to wonder when their cars will be arriving.

Now that the first vehicles are indeed delivering, Tesla has an opportunity (and a responsibility) to reverse course by informing buyers where their cars stand in the assembly line and setting—and meeting—realistic delivery dates. A wave of buyers reneging on their orders due to missed deadlines would be catastrophic for the brand.

Fortunately, it’s not too late to fix the problem. The launch of a website or app that lets buyers track the production of their individual car should be a simple feat for a company whose entire brand is built on technology, and the resulting marketing and media buzz would go a long way in easing concerns.

If Domino’s customers can track the status of a pizza from the time they place an order online to the minute it arrives at the door, then surely Tesla can figure this out.

Tesla made the calculated decision to brand the Model 3 alongside existing models that cost double—even triple—the price. Only time will tell if that was a smart bet, but it’s time for Tesla to begin improving its odds. Winning back the sentiment of the Model 3’s earliest adopters is a logical place to start.

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Aaron Gordon
Aaron Gordon is a partner with Schwartz Media Strategies, a public relations, marketing and digital media firm based in Miami.

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