Last week, Tesla launched its all-electric SUV, the Model X. The launch of the Model X had previously been delayed for a number of years due to the complexity of producing the vehicle, and after reading details on the car, it’s not hard to imagine why. The Model X comes with a number of technologically advanced features, some that can even be considered superfluous. These include “futuristic ‘falcon wing’ back doors, panoramic windshield, [and] an air-filtration system with a ‘bioweapon defense mode’”.
While having these features may attract buyers with deep pockets, they make producing the car a difficult task. There is already an 8 to 12 month waitlist for the Model X, and while this signals that demand for the vehicle is high, it makes Tesla’s goal of producing 500,000 cars per year by 2020 seem like a farther and farther stretch. In my personal opinion, having so many advanced features on a vehicle just creates more opportunities for parts to break down or malfunction. This could ultimately pose a risk to consumer loyalty.
Though Tesla has had no troubles in the past topping expectations for its cars, adding more and more advanced features can be detrimental to Tesla in the long-run. Consumers and investors alike will continue to have increasingly higher standards for Tesla’s cars, expecting nothing less than the most advanced technology. Going forward, it will be interesting to see how Tesla’s end-goal mass-market Model 3 will satiate consumer taste for Tesla’s futuristic technological features while remaining simple enough to keep prices affordable for the middle class.
-- Eric Chao Leonard N. Stern School of Business Tel: (973) 216-6693 | Email: email@example.com