Is Elon Musk’s Tesla brand success grinding to a halt?
It appears that Tesla, one of the pioneers of the EV (electric vehicle) revolution, is having a tough time. Hardly a year ago, Tesla cars looked amazing set to revolutionize the global automobile industry.
Elon Musk, the mega serial entrepreneur and the CEO of $33 billion electric car company Tesla and the $20bn inter-galactic company SpaceX was in the spotlight for his revolutionary products.
But then, suddenly, things started to change that few, including Musk, ever saw coming: a rough ride, or so it seems.
Last week, in California, a Tesla Model X crashed and burned and the driver was killed. Tesla said the car had its Autopilot system engaged when the crash occurred.
Another incident happening last week that raised eyebrows was Tesla’s largest-ever vehicle recall over a potential steering fault. On last Thursday, the US EV carmaker recalled about 123,000 Model S sedans worldwide, asking customers with cars built before April of 2016 to have their power steering bolts replaced, according to media reports.
The Model S has been lauded for its safety ratings, but news of this recall comes at a rough time for Tesla, reports CNN.
Tesla’s stock sank nearly 4 per cent during after-hours trading on Thursday after the recall announcement.
Investors are also worried about the carmaker’s ability to deliver on its first mass-market car, the Model 3, which has been plagued by manufacturing woes.
On a month-on-month basis, Tesla’s stock price has plunged more than 25 per cent over the past month, as on March 30.
When Tesla launched it EV cars, there was hardly any competition. Now, a number of car brands such as Porsche, Mercedes-Benz, BMW, Audi, Volkswagen, Nissan, Honda and Hyundai are either in the process or have already launched electric vehicles.
Moreover, the charging time of Tesla cars is another issue. Fast charging is critical to the EV car’s success, and Tesla’s competitors know that.
So has brand Tesla reached a critical point? Does Tesla need a recharge of its marketing strategy and needs a better technology upgrade?
“I think all tech companies need to review their marketing strategies in light of the commercial and political challenges many are facing. Tech companies were once the darling of the financial, political and commercial sectors across economies but today we see with Uber, Amazon and Air BnB to name a few that things are challenging as they rub up against traditional business models and established players in these markets,” Louay Al Samarrai, Joint Managing Director, Active DMC, says GMR.
“Tesla has almost Apple-like status today and if they continue to innovate and have Elon Musk as the charismatic leader then I can only see this gaining strength,” he adds.
This article first appeared on AMEinfo’s sister publication GMR.