Tesla

Tesla gets taken to task by Consumer Reports.

Phillip Nones Branding, Business, Manufacturing, Marketing Research, Sales , , , ,
The Tesla Model Y SUV

Getting decent ratings from Consumer Reports is an important achievement for any product – particularly high ticket-items such as large home appliances and motor vehicles.

Many consumers consider CR to be the Holy Grail when it comes to its product evaluations. Indeed, weak comparative ratings is why so many American car makers have suffered greatly when attempting to compete with their Asian and some European counterparts.

And then we have Tesla.  This American car (and solar panel technology) company is different in that the Tesla product line doesn’t include any traditional gasoline-fueled vehicles.  The company has suffered for that in Consumer Reports’ reliability rankings, as its electric car technology isn’t fully mature – and hence subject to some rather gnarly quality control issues.

Actually, the company had been making some pretty steady progress on the product quality front – until the new Model Y mid-size SUV model hit the market earlier this year. Some of the common complaints about that new Tesla model have been eyebrow-raising to say the least – including some very basic and distinctly lo-tech problems like misaligned body panels and mismatched paint colors. 

As it turns out, the knocks on the Model Y have sent Tesla’s brand reputation plummeting in the CR reliability ratings.  The company now ranks an abysmal 25th out of 26 auto brands.  Ouch!

The Model Y has garnered Consumer Reports’ embarrassing designation “much worse than average.”  But Tesla’s more established vehicle models aren’t perceived to be that much better, actually.  CR rates both the Model S sedan and the Model X SUV as “worse than average,” meaning that only Tesla’s Model 3 is currently holding an “average” rating and the commensurate “recommended” status from CR.

Clearly, this company has substantial work left to do to convince a skeptical public of the quality of its automotive lineup.  Considering how quickly electric cars are being adopted now, it looks like the company will need to clean up its act within the next 24 to 36 months, or risk becoming one of those early pioneers that flamed out — just like happened to many of the early entrant motorcar companies a century ago.

What are your own thoughts about the promise – and pitfalls — of Tesla and its products?  Please share your perspectives with other readers here.

Trucking services: Burgeoning demand hastens fundamental changes in the industry.

Phillip Nones Business, Economics, Employment, Human Resources , , , , , , , , , , ,

The trucking services industry is a fascinating field right now. On the one hand, demand for trucking services has never been higher – thanks to fundamental shifts in the way consumers shop for and purchase merchandise.

On the other hand, we may be on the cusp of fundamental changes in the way trucking services are handled as a result.

Thanks to data compiled by the Thomas Index Report, we can see that sourcing activity for trucking services is growing at a substantially faster rate than its historical average – to the tune of ~10% higher demand above the norm.

There’s no question that a key reason for this demand growth is because of changes in how consumers shop – with much less reliance on brick-and-mortar retail and more emphasis on online purchasing.

According to freight exchange services provider DAT Solutions (aka Dial-a-Truck), for every 12 loads needed to be moved, just one truck was available during 2018.

That ratio is unsustainable over time. And it doesn’t help that there’s been a persistent shortage of long-haul truck drivers.  That’s actually a 25-year trend, but it’s been becoming more acute with every passing year.

When Walmart finds that it needs to hire long-haul drivers whose all-in compensation approaches $85,000 annually, that’s when you know the fundamentals need to change.

And fundamental change is happening – even if you may not have seen it “up close and personal” yet. A group of manufacturers are working on developing self-driving (autonomous) semi-trailer trucks. Among the companies committed to this initiative are GM, Volvo, Daimler and Tesla.

Driverless trucks are already on the road, including ones developed by Waymo that began delivering freight for Google’s data centers last year. Amazon is hauling cargo via autonomous trucks produced by Embark, another self-driving truck developer.

The rapid pace of development means that it’s quite likely self-driving trucks will become mainstreamed during the 2020s. If that happens, we could then be looking at another set of issues – how to channel sidelined truckers into jobs in other fields.

Perhaps some of those people can find employment in several ancillary industry segments that are benefiting equally well because of shifts in how consumers shop and buy. Naturally, demand is robust and growing in the freight-related categories of crates, pallets and containers.

… On the other hand, it’s probably best if the displaced workers don’t try to get new jobs working at a shopping center …

The key to environmentally friendly products’ desirability? Deemphasize the green.

Phillip Nones Advertising, Branding, Business, Manufacturing, Marketing Communications, Sales , , , , , , , , , , , , , ,

Selling green productsIt turns out that one key to the success of marketing so-called “green” products is actually to deemphasize the environmental messaging — at least when targeting consumers in the United States.

According to a number of surveys conducted by branding and marketing communications firm Landor, American consumers value possessing “green” attributes the least valuable of a series of brand attributes studied.

This despite years of social engineers and marketers of environmentally friendly brands attempting to “educate” consumers on environmental consciousness and the importance of sustainability.

At this point, it’s probably better for products to promote themselves based on other attributes besides “green” attributes … or at least to stop leading with that argument.

Instead, what are the values that resonate the most with American consumers?  According to Ted Page, a principal at content marketing firm Captains of Industry, there are three in particular — none of them having much to do with environmental issues — at least on the face of it:

  • Freedom
  • Independence
  • Saving money

But for green products, it’s possible to tie everything up in a nice bow by being able to lay claim all three of these attributes as brand attributes while not compromising the environment, either.

Nest Learning ThermostatAn example of this message strategy in action is the Nest Learning Thermostat, which promises saving energy in the context of achieving increased home efficiency, automated temperature management and lower energy bills.  The “green positioning” is nice — but it’s the other product attributes that really hit pay-dirt.

Tesla logoAnother example is Tesla electric automobiles.  Tesla is promoting the performance of its high-torque electric engine as superior to other sports cars manufactured by BMW, Lexus and Audi.

The fact that Tesla’s high-performance engine happens to be emissions-free is just icing on the cake.

Thanks in part to this messaging platform, sales of the Tesla Model S auto now outstrip those of the Mercedes S-Class, Lexus LS, BMW 7-Series, Porsche Panorama and the Audi AB.

One has to wonder if this would had happened had Tesla chose to lead with “green” messaging instead.

It would be nice to think so, but … probably not.

Clean energy initiatives banging up against cold harsh reality.

Phillip Nones Uncategorized , , , , , , , , , ,

Inoperable Tesla Roadster being towed on a flatbed.Let’s face it: This hasn’t been a very good year for environmental and clean energy initiatives. First it was the Solyndra debacle — a saga that appears to be never-ending.

Next were the reports of “global warmists” getting caught fabricating documents in an attempt to deflect attention away from the steadily mounting data that’s making global warming no longer the “consensus view” in the scientific community.

And now we have a damning report about Tesla Motors’ vaunted Roadster electric vehicles, the darling of the clean car crowd.

It turns out that most of the Roadster models sold into the market suffer from severe design flaws that can essentially destroy the value of the car. If the vehicle’s battery becomes totally discharged, the car becomes completely immobile; the vehicle won’t start, and it can’t even be pushed down the street.

The only remedy for hapless Roadster owners? Tesla will cheerfully replace the battery system … for a cool $40,000. And the owners will have to pay the entire bill, too, because Tesla’s warranty policy does not cover car damage due to battery failure.

That is correct: For those who purchase a Roadster, when it comes to battery-related repairs there’s no warranty … no insurance available from outside carriers … and no payment plan.

[To be fair, Tesla does offer a $12,000 “battery replacement program” for cars whose batteries are more than seven years old. Of course, that figure doesn’t begin to cover the ~$32,000 battery replacement cost plus ~$8,000 in labor charges.]

Some auto industry wags have started to call the Roadster by another name – the “Brickster.” That’s because when the car is immobilized due to the death of the battery, it becomes completely inoperable — basically thousands of pounds of dead weight.

Owners who face the misfortune of a full battery discharge will come to find out that conventional towing won’t work because the car’s wheels won’t even turn. Instead, they’ll have to figure out a way to lift the entire vehicle onto a flatbed truck for towing and repair … in the process spending additional hundreds (or thousands) of dollars in towing fees.

And lest people think that the battery depletion occurs only because of stupidity on owners’ part in forgetting to plug their vehicle in … not so fast. In some instances cars were plugged in but the electrical charge wasn’t strong enough to charge the battery, perhaps because an extension cord was too long.

And considering the hefty ~$109,000 sticker price of a Roadster, it’s disappointing to discover that the vehicle’s battery can become fully discharged in as little as one week’s time. Good luck with that if you find yourself stuck somewhere that’s not in close proximity to an electrical power source.

And for people parking their Roadster at the airport lot during a family vacation … better just hope that the charging mechanism is working properly. Either that, or have someone check up on your vehicle several times during your trip, lest your vacation ends up costing you an additional forty-grand.

The Tesla cautionary tale is yet another example of the disconnect that exists between the promise of clean energy and the practical challenges of turning it into reality.

To begin with, at ~$109,000 a pop, how many consumers can even afford the cost of a Roadster? And how many people who could afford the vehicle will actually plan to sink their hard-earned cash into a product that possesses such fatal design flaws? Even gas pump prices of $7 or $8 per gallon won’t change that dynamic.

Tesla has sold only ~2,500 Roadsters so far. But its aggressive plans call for manufacturing ~25,000 of its new Model S Roadsters by the end of 2013.

The company’s optimistic forecasts are based on the belief that the Model S’s lower price tag of ~$50,000 will attract a new and larger crop of consumers.

But I wonder if that will actually happen. After all, the sticker price remains high … and the “battery bricking” issue will only become more apparent to consumers as more Roadster vehicles end up on the highway.

Time will tell whether the Tesla Roadster’s fortunes will soar to new heights … or sink under its own (dead)weight. Maybe it’s worth making a $40,000 bet on the outcome.