Image damage for Tesla
Will Musk meet Starlink China?
By Christina Lohner
02/09/2023, 8:15 p.m
Chinese automakers are competing with Tesla. Instead of presenting a new vision, Tesla boss Musk again stands out with a proximity to Russia. This massively damages the image of the former electric pioneer, as a brand expert explains. Musk could have the Chinese market in mind.
Elon Musk seems to be standing by Russia’s side again. Its Starlink satellite Internet service is said to no longer be used by Ukraine to control drones in the Russian war of aggression. Last but not least, Musk is damaging the image of his car manufacturer Tesla. What tempted the unpredictable entrepreneur to do this and whether he actually supports Russian President Vladimir Putin, as the Ukrainian military has assumed, is an open question. Brand expert Jon Christoph Berndt can imagine that Musk even wants to strengthen Tesla with it. The US automaker could thus accommodate China, which has never condemned Russia’s attack on Ukraine and blames the US for the war.
In return, the People’s Republic could open up its huge market – the world’s largest car market – more to Tesla, where the Americans are struggling. Berndt, who advises managers and companies with his company Brandamazing, calls this brand geopolitics. In his eyes, Musk is acting unhappily. “As a human brand, i.e. a personal brand, Elon Musk is doing a lot to ensure that the Tesla brand is on the wane,” says Berndt in an interview with ntv.de. Musk’s unpredictability is therefore poison for the brand. “A brand must be a haven of peace that promises absolute trust and gives customers the good feeling of having made the right decision.” If the person behind the brand behaves erratically, this protective space no longer exists.
As with Tesla: Anyone who buys a Tesla car today – for years to come – can no longer be sure whether they will be laughed at tomorrow. “Tesla is currently a sinking brand star,” says Berndt. The reasons are different, the design is gradually becoming stale, and traditional car manufacturers are catching up on range and other technology. “The brand is in a weakening phase,” explains the brand expert. This is a typical cycle after the build-up and strengthening phases. Now Tesla needs a new vision, “but the new story is missing”.
Brand expert Jon Christoph Berndt
Brands today have to formulate the social contribution they make, as Berndt explains: what they are for, what makes people better off with them. But instead, with Starlink’s withdrawal from military support for Ukraine, Musk is siding with the aggressor Russia.
Significant share of image damage
In addition, according to Berndt, brands thrive on continuity. Musk supports Ukraine with Starlink, but questioned the financing in October – only to promise it again a day later. And now Ukrainian drones are said to no longer be controlled via the satellite service. The explanation: Starlink is only intended for humanitarian purposes.
Berndt is convinced that anyone looking for a new car in Germany at the weekend is largely guided by the news they have read during the week. The expert therefore considers the share of Musk’s political statements and actions in Tesla’s image damage to be significant. Also in October, Putin sparked outrage with a controversial “peace plan” for Ukraine.
Chinese brands form a new countervailing force
In addition, Tesla’s earlier pioneering role is suffering from new competitors from China. The technological leadership “made in California” has almost become a mass product. “While Tesla customers used to be brutally ahead, today it’s only okay to drive a Tesla,” says Berndt. “In the meantime, even the staid manager drives Tesla.”
The question is for how much longer. So far, customers have bought a Tesla who want to be at the forefront, but don’t want to put it on as thickly as the brand expert puts it – “green ecological affluent citizens” who take their child to school in the parents’ taxi and still in the organic market on the way home shopping for lunch. “But the caravan of brands is moving on,” Berndt is certain. Hydrogen, for example, comes into play as the technology of the future, and brands such as BYD, Polestar or Nio as bets on the future. “It’s also about geopolitics,” says Berndt. “The new Chinese manufacturers form a countervailing power to Tesla.”