Bob's Gutsy Leadership Blog

Tesla: Marketing Exaggeration Not Needed!

Tesla was founded in 2003, and until 2012 it marketed only a two-seat roadster.  In 2012 the Model S four-door luxury sedan was launched, and that was really the start of Teala as we know it today.  Basically, Tesla invented the electric-car category and is the clear market leader.  While only a few years ago it was often criticized for bloated estimates of future results and the CEO’s random and often bizarre tweets, things have really settled down and now the company is widely admired.

For example, it just recently announced its Q1-2021 shipment results; it delivered 184,800 cars, widely beating the analyst’s expectations of 164,000.  2020 was the company’s first full year of being profitable, and it expects 2021 total year deliveries to increase 50% versus a year ago. The China introduction has gone very well and is clearly adding significant momentum for the company. 

But…there is one area where Tesla regularly gets bad press because it is needlessly exaggerating its capabilities: specifically, in marketing its “autopilot” feature.  The Merriam-Webster dictionary defines “autopilot” as a device for automatically operating a ship, aircraft or spacecraft.  In an auto context, the term clearly suggests you flip a switch and you are relieved of the duties of operating the car.  

When Tesla owners use the autopilot feature, and have an accident, it tends to get a lot of negative publicity for the company.  That has certainly been the case this past weekend when a Tesla with two passengers in the car, but nobody in the driver’s seat, hit a tree.  The car was immediately consumed in flames, killing both passengers.  Firefighters fought the fire for four hours due to the fire being fueled by the very flammable materials that make up the car’s massive battery.  In recent weeks there have been 3 other high-profile Tesla autopilot-related accidents, causing the National Highway Traffic Safety Administration to launch a formal investigation.    

With each of the autopilot accidents, Tesla takes the position that it instructs drivers to pay attention to the road and be prepared to take over control of the vehicle.   On the other hand, Tesla is marketing its autopilot feature as a “full self-driving” system.  No wonder the accidents get hyped by the press and the regulators get interested!  Also, Tesla’s “full self-driving” descriptor flies in the face of what is becoming a clear realization that, as stated in a very recent Wall Street Journal article; “autonomous driving remains unproven technology, and the extreme difficulty of achieving it has become clearer in recent years.”

Given that Tesla has so many positives going for it currently, and deservedly so, why invite such criticism?  Its so-called autopilot feature is clearly the industry’s leading driver-assistance capability, so why not call it just that: the industry’s leading driver-assistance capability.  In fact, in 2020 Consumer Reports ranked 17 different driver-assistance systems, and Tesla’s received a 9 out of 10 rating.  The only reason it didn’t get a 10 was that it got docked in the category of keeping the driver engaged.  No wonder, given how it is marketed as an “autopilot” capability.

So…what do we learn from all of this?  Objectivity is needed in all parts of the business.  As we see in this Tesla example, exaggeration usually draws negative publicity and that can lead to distraction at a minimum, or worse, like regulatory interest!

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