Every time I write about Tesla I have to make sure that everybody understands how much I love Tesla’s products and what they have been doing so far for electrifying the car industry. By pushing big manufacturers to finally start producing electric vehicles (EV) we will ultimately drive better and cleaner vehicles. As a marketer though, I often worry that Tesla’s policy of over-promising and under-delivering will ultimately have negative aspects on the electric car industry.
In this blog entry I want to talk about the most fascinating luxury (and electric) SUV on the market right now: the Tesla ModelX. With that example I want to show how using the term SUV in marketing messages can negatively influence customer satisfaction. So, lets start by defining the term SUV. How is a luxury SUV like the Model X defined?
Luxury SUV is principally a marketing term to sell fancier vehicles that may have higher performance, comfort, technology, or brand image. The term lacks both measurability and verifiability, and it is applied to a broad range of SUV sizes and types.
Yes, this is a quote from Wikipedia. Yes, it is often not the most reliable resource. But, I have not found a better definition of the term luxury SUV anywhere else. In the industry, SUVs are defined as truck-based (meaning they are build on a truck platform), boxy vehicles. Generally they come with some form of off-road capability. Crossover vehicles have more ground clearance than regular cars but are based on a car bodies. These are the simple definitions.
In practice I believe that most people buy SUVs and crossovers because they sit higher up and thus can better oversee traffic. Some might also buy those vehicles for off-road capabilities or winter usability. But what if SUV is really only a marketing term. What if it doesn’t mean anything other than: “sexier marketing and easier to sell at a high price". Lets continue by plotting the luxury SUV space and analyzing how the most recent addition to this space, the ModelX, was marketed.
I took some time to plot the best selling luxury SUVs of 2014 in a simple graph (I include car based SUVs/crossovers and truck-based SUVs in the overall SUV segment). On the Y-axis I plotted height and on the x-axis length. In this graph 2 vehicles clearly stand out.
- First, the GM Suburban is a beast. The GM is significantly longer than other well selling luxury SUV.
- Second, the Tesla Model X. First of all, it wasn’t available in 2014, so it shouldn’t be in that graph (besides sales numbers being low). However, it stands out as being significantly shorter in height than other luxury SUVs. The guys from greencarreports go into details on what the Model X should really be categorized as.
I don’t want to go into those details, but with 8 inches ground clearance it is not significantly higher than for example an Audi A6 allroad wagon with 7.1 inches. I am not sure what the Model X is from an engineering perspective but I know what it is not. It is not a traditional SUV.
Why should anybody care about putting the Model X in the right category? Well, as marketer I love using the term SUV. It is a more attractive and aspirational term for customers than for example, wagon, van or crossover. SUV is a sexy marketing term that might be even wider used in future. But, it gets tricky when marketers start abusing undefined terms like SUV. Using phrases such as “best in class” can cause confusion among potential customers and disappointment in the vehicle at a certain point. To allow customers to get what they want, we should avoid misusing this term.
“Model X is able to achieve 257 miles of range in part because it is the most aerodynamic SUV in production.
A drag coefficient of 0.24 is truly fantastic. This is a fantastic number for any sedan! For an SUV, such low drag-coefficient is unheard of. It can only be achieved if the vehicles's height is significantly lower than of any other SUV. So, while the number is impressive, it simply means that the lowest car in the SUV category has the lowest drag coefficient. That makes sense. What will happen though if customers decide to go off-road? How will it affect the perception of the electric car if its bad off-road capability gets blamed on the electric powertrain? How long can Tesla sustain its policy of over-promising and under-delivering before it starts affecting public perception of the firm and the EV space in general?
What do you think, is the Model X an SUV? Should the SUV market be better defined to protect customers from being misled? Will the EV market take a hit if Tesla keeps over-promising?
Sini Ninkovic analyzes the EV market and its customers since 2012. He helped bringing BMW's i3 and i8 to market and currently works as Product Planner for Lucid Motors.