Tesla is now the most valuable American car brand with a market cap of over $ 100 billion – and more valuable than Volkswagen, This is all the more impressive when you consider that only eight years have passed since the introduction of the Tesla Model S, Tesla currently only offers three models and is only really present in a few markets.
Daniel André Langer
Daniel Langer is CEO of the brand consultancy Équité and a worldwide sought-after expert for the luxury industry, among others he works for Ferrari. He is also the author of several books on luxury marketing, gives lectures and gives management seminars. equitebrands.com
For a comparable market capitalization, Volkswagen needed almost a century, a conglomerate of many brands from Skoda to Audi to Bentley. So it’s no wonder that VW boss Herbert Diess recently made an internal fire speech and warned that the company must become faster. This is not the only concern. Fear is widespread on all executive levels of traditional car manufacturers.
But surprisingly, car managers underestimate Tesla still and many don’t really understand what makes Tesla a threat. Even fewer have a recipe to keep up in the future. Whether in Munich, Stuttgart, Paris, Turin, Detroit, Seoul, Shanghai or Tokyo, the large and well-established auto companies are unable to keep up with the technology change. The distance gets bigger. While everyone is busy rebuilding your corporations, practically no other brand can use Tesla’s real recipe for success.
Millennials want to consume luxury without remorse
The incredible brand value is not only fueled by the pioneering position in electrification and digitization. The recipe for success is deeper. In my view, Tesla is the brand that best manages to be attractive to young target groups. The so-called millennials, i.e. consumers who are currently between 20 and 40 years old, have become the most important group of buyers for cars worldwide, especially in the luxury segment.
Yesterday’s concepts are not relevant for this young target group. This is felt by the established luxury brands, which are flocking to buyers in many countries. Because unlike the older buyers, millennials want to consume luxury without regrets. This means that young consumers choose the brands whose value system they can identify with.
Tesla is the only car brand that positions itself over the value system
The problem of many established luxury brands: The existing brand definitions are usually insufficient to survive in the future. Those who only define themselves through supposed competencies have no chance. Because competencies are simply expected. What is much more important are emotional brand components and values. Customers want to know why a brand does what it does. The brand is only relevant if it is clear and meets consumer expectations.
Here Tesla does everything differently. From the start, Elon Musk made it clear that he was concerned with much more than simply selling cars. Tesla’s mission is to accelerate the use of sustainable, environmentally friendly mobility. The brand thus helps to make the world better. This goal differs from all other brands. It elevates Tesla to a different level than the competition brands and appeals to fundamental consumer values. Tesla is the only car brand that positions itself clearly and distinctly across the value system.
Former innovation leaders have become marginal figures
Beyond that Elon Musk managed to take away the original core competence of the established brands: innovative strength. For many young consumers, the existing luxury brands have mutated from technology leaders to slow corporations from an old time. In all technology-driven topics such as acceleration, digital interfaces, electrification, battery technology, connectivity or autonomous driving, the previous innovation leaders have become marginal figures and are running desperately behind.
This is fatal: Our research has shown that the most interesting for luxury buyers are those brands that are considered innovative and influential. Brands that have a cool factor and define the zeitgeist. Many of the existing luxury brands are no longer perceived as innovative. This is fatal in the luxury sector.
When Tesla recently introduced the polarizing cyber truck, many long-established car managers supposedly knew that the radical new car was so different that nobody would buy it. The reality is different: At the moment more than two hundred thousand orders the Cybertruck could become the most successful new car in the category on the all-important US market. The recipe: the latest materials, a radically different design and the world’s leading electrical technology make the cyber truck a symbol of a new generation. In contrast, the electric cars of the established providers cannot be seen in the street scene. A clear warning signal.
With a clear value system, technology leadership and bold products, Tesla has become the most relevant and innovative luxury brand for many millennials. It is a new value-based interpretation of luxury that is more relaxed, relaxed and at the same time technology-driven. In California I like to call it “barefoot luxury”, unpretentious with clear values.
Providing a brand with values is one of the most important tasks today. Most companies have clear deficits here. This is how the former hunters became hunted. Many of the classic brands not only have to catch up technologically, they also have to ask themselves about brand values. Only then will the leading brands of the past be the leading brands of the future.
The change has never been faster than today. The massive increase in value of Tesla speaks volumes in less than a decade. A wake-up call for the boardrooms. Action must now follow.
Daniel Langer is an expert in the luxury industry and writes as influencers for manager-magazin.de. As with the other opinion leaders, his opinion does not necessarily reflect the opinion of the editors.