“More is less”, Elon Musk’s risky bet – Business

Ukraine is still a big part of the news and it’s hard not to talk about it, but today I’m going to try to do it by talking about the Tesla brand and its iconic boss Elon Musk.

Its news is that Tesla’s stock price has experienced a nice downward jolt. The reason for this drop? Elon Musk has made it clear that he does not intend to manufacture a compact car for the European market for the moment and he also announced in the process that other models such as the Cybertruck and the Roadster will not be in the 2022 catalog. In other words, Elon Musk considers that he has the wind in his sails and that he must moderate his offer. For him, it’s clear: “More is Less”.

It’s astonishing as an approach. It was my colleagues from the business daily Les Echos who alerted me to this big difference with other premium brands. Mercedes, for example, offers its customers around forty bodies and BMW around thirty. And I’m not even talking about the different engines, different colors and interior trim.

The idea of ​​this plethoric offer is that it is necessary to meet the different needs of customers. Those who want a family car, those who want sporty driving, etc. In short, the strategy of most manufacturers plays on the personalization of the car.

At Tesla, it’s like Apple with the iPhone, the range of choices and colors is limited. Officially, Tesla offers 4 models: S, X, 3 and Y. In reality, the first two models are sold in dribs and drabs and represent only 3% of the 930,000 cars sold in 2021. Almost all the rest of the sales are based on the Model 3 launched in 2017 and the Model Y launched two years later. Why such a narrow offer when other brands leave the choice to their customers? It is in the answer to this question that we see thatElon Musk is not the richest man in the world by chance. Opting for less choice for customers is indeed an advantage on the industrial level. This limits the diversity of the parts manufactured, but also the number of suppliers. All of this, of course, also simplifies the manufacturing process, flow management and cost reduction.

Clearly, while the other brands are having supply difficulties today – yesterday because of covid and today because of Ukraine – Tesla has less of this concern for that reason. It is therefore this attitude against the current of its competitors, which also explains the success of a brand which is so well valued on the stock market that if we divide its value by the number of cars produced, we arrive at more than 2 million euros per car, which is sheer madness.

In fact, Elon Musk’s bet is simple, it is based on the principle that the customer of tomorrow will seek to differentiate themselves not before the purchase by the bodywork, but after the purchase according to the options and services they will be able to download exactly as with his smartphone. Elon Musk starts, in fact, from the principle that the car of tomorrow will be a smartphone with a battery and 4 wheels around. But it still remains a bet today, namely: that of thinking that the consumer will change his behavior radically.

The recent stock market crash of Tesla shares shows that investors have doubts about this scenario. But recent history has often shown that the Stock Exchange was wrong to bet against Elon Musk

Its news is that Tesla’s stock price has experienced a nice downward jolt. The reason for this drop? Elon Musk has made it clear that he does not intend to manufacture a compact car for the European market for the moment and he also announced in the process that other models such as the Cybertruck and the Roadster will not be in the 2022 catalog. In other words, Elon Musk considers that he has the wind in his sails and that he must moderate his offer. For him, it’s clear: “More is Less”. It’s an amazing approach. It was my colleagues from the business daily Les Echos who alerted me to this big difference with other premium brands. Mercedes, for example, offers its customers around forty bodies and BMW around thirty. And I’m not even talking about the different engines, different colors and interior trim. The idea of ​​this plethoric offer is that it is necessary to meet the different needs of customers. Those who want a family car, those who want sporty driving, etc. In short, the strategy of most manufacturers plays on the personalization of the car. At Tesla, it’s like Apple with the iPhone, the range of choices and colors is limited. Officially, Tesla offers 4 models: S, X, 3 and Y. In reality, the first two models are sold in dribs and drabs and represent only 3% of the 930,000 cars sold in 2021. Almost all the rest of the sales are based on the Model 3 launched in 2017 and the Model Y launched two years later. Why such a narrow offer when other brands leave the choice to their customers? It is in the answer to this question that we see that Elon Musk is not the richest man in the world by chance. Opting for less choice for customers is indeed an advantage on the industrial level. This limits the diversity of the parts manufactured, but also the number of suppliers. All of this, of course, also simplifies the manufacturing process, flow management and cost reduction. Clearly, while other brands are having supply difficulties today – yesterday because of covid and today because of Ukraine – Tesla has less of that concern for that reason. It is therefore this attitude against the current of its competitors, which also explains the success of a brand which is so well valued on the stock market that if we divide its value by the number of cars produced, we arrive at more than 2 million euros per car, which is pure madness. In fact, Elon Musk’s bet is simple, it is based on the principle that the customer of tomorrow will seek to differentiate themselves not before the purchase by the bodywork, but after the purchase according to the options and services that he can download exactly as with his smartphone. Elon Musk assumes that the car of tomorrow will be a smartphone with a battery and 4 wheels around. But it still remains a bet today, namely: that of thinking that the consumer will radically change his behavior. The recent fall in the Tesla stock market shows that investors have doubts about this scenario. But recent history has often shown that the Stock Exchange was wrong to bet against Elon Musk

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