Tesla Lurches Toward Lexus
When unintended consequences deliver serendipitous scale
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Elon Musk sure is trying to turn Tesla into something different in the minds of his customers. He may be doing it at the perfect time.
The news about Musk and Tesla has been mostly negative. Business Insider published, “Fed-up Tesla owners say they're so sick of Elon Musk's antics that they're ditching their cars.” SF Gate, the local news site for the San Francisco Bay Area, ran the article “'You have to compartmentalize': Bay Area Tesla drivers cringe at Elon Musk,” - for which I was interviewed. Then there’s Paul Krugman’s New York Times column “How to destroy a brand, Musk style.”
But these stories only tell the first half of the story. The second half may demonstrate in a very public, entertaining manner an essential strategy for consumer technology brands to achieve maximum scale.
The EV market is expanding beyond early adopters, who are critical for getting innovative technology off the ground. That early adopter market is almost always liberal because liberal customers are far more open to change. They are more willing than conservative customers to abandon a solution and experiment with something new. Liberal customers also prefer more futuristic, abstract, and forward-looking things.
These liberal customer attributes date back a hundred years, when the Second Industrial Revolution and World War I upended the United States and the world. Almost overnight, half the population moved into cities for economic opportunity while the world reeled in the aftermath of death and destruction.
These events gave birth to the urban liberal modernist movement, which rejected traditions believed to have caused the war. “Make it new,” the title of Ezra Pound’s collection of essays in 1934, became the tagline for modernism. The focus was on new answers and uncovering universal truths. Urban liberal artists from the 1930s and 1940s, like Matisse and Picasso, used abstraction to explore new answers, joined by modernist architects, poets, and novelists. The more rural conservative half of the population rejected modernism for its rapid change to remain focused on the practical and traditional.
Tesla’s design is also a modernist exploration that seeks new answers. There’s nothing conventional or traditional about how Teslas look or act. Liberal urban modernism is also why every Tesla competitor has a similar futuristic, abstract design. As a category, EVs point to the future, not the past.
But the EV market will evolve beyond urban liberal early adopters as the vehicles proliferate. That’s when conservative customers step in, just as they have with other consumer technology brands, like Apple.
Conservative customers adopt new technology and innovation once it’s proven and familiar. They generally don’t waste time experimenting with all the innovation that fails. That’s the job of liberal customers who are in perpetual search of new answers. The liberal customer group hands off the winners to the conservative customer group. What starts as futuristic eventually becomes familiar, activating the other half of the market. Innovation at scale can’t happen without both groups. EVs will become “conventional,” if only within recent history, over the years ahead.
The challenge that many consumer technology brands have is that they don’t transition from the liberal early adopter market to a larger market that includes conservative customers. This often results from projecting a perpetual vision of disruption combined with liberal predispositions, often emanating from founders and leadership. In the case of Tesla, without necessarily thinking about it, Elon Musk is accelerating the transition of the Tesla brand into a far larger market in a manner not seen by any other brand in history. Having 120 million followers on Twitter helps.
It’s possible Musk is making this transition too fast, but it is happening. Even before Musk bought Twitter or endorsed Ron DeSantis for President, Tesla customers were becoming more conservative as the brand’s success became more pervasive.
A year ago, before Musk made daily headlines with conservative statements, Morning Consult noted that 22% of Democrats were considering buying a Tesla compared to 17% of Republicans. That’s a surprisingly small gap. A more current Morning Consult report shows the net favorability of Tesla ticking down for Democrats. For Republicans, it’s ticking up, all most likely due to the Musk news coverage. The negative effect on liberal customers may only be temporary if you imagine a world where Musk eventually turns his attention away from managing Twitter.
Consider also that luxury sedans as a category skew conservative, which includes brands like Lexus and Lincoln. So if you can put the futuristic-ness of EVs aside for a moment, most Tesla models operate in a fundamentally conservative category. For the North American market, they are even Made in America.
If Tesla ever launches its pickup truck, they will tap into an even bigger market than sedans and SUVs. The Ford F 150 has been the number one selling automobile for the past forty years because it ranks high for both liberal and conservative customers. You can’t achieve that kind of scale without appealing to both groups. Even though Ford beat them to the punch with their new electric F 150, Tesla will claim the status alternative for liberal and conservative customers.
Lurching is the only way to describe Tesla’s transition to a broader market that includes liberal and conservative customers. There is no carefully planned brand or product strategy at work here. It’s serendipitous, with scale as a potential collateral benefit. When EVs evolve from futuristic to familiar, Tesla will have a market advantage for sustaining its current leadership position because liberal and conservative customers will buy them. When that happens, Musk’s liberal urban modernist customers will need something new to experiment with. How about space travel?