Elon MuskElon Musk Tesla CEO Elon Musk has built Tesla into one the most powerful brands in the world.

Jae C. Hong/Associated Press


In the car business, it’s often said that brands are grand, but products pay the bills. In other words, you can capture or retain customers with what your company stands for, but long-term, if you don’t have great vehicles, you’re going to have a problem.

For almost its entire history, more than 15 years, Tesla has inverted that wisdom. A few years ago, the carmaker was barely selling any vehicles relative to its global competitors. Last year, Tesla delivered only about 250,000 vehicles, while General Motors sold almost 8 million.

Investors have decided that this means Tesla should be worth $300 billion in market capitalization, more valuable than GM, Ford, and Fiat Chrysler Automobiles combined — and topping Volkswagen and Toyota, the two biggest automakers on Earth.

Vehicle sales obviously don’t add up to $300 billion in value; Tesla’s quarterly revenue remains far below a Detroit Big Three car company. It’s a bet on the future, and a prediction that Tesla should be able to expand its near-monopoly of the EV market as that market grows from a currently tiny basis, merely 1-2% of worldwide sales.

Investor optimism is that Tesla will maintain a dominant share, increase it scale, and notch enviable profit margins, perhaps more than 10% (high-volume luxury carmakers operate at that level, while mass-market companies run in the single-digit range). 

But for now, the Tesla brand is mighty. Here’s how that happened:

The Tesla brand predates its first vehicle. But it was the original Roadster that announced Tesla’s objectives to the world in the mid-2000s.

tesla roadster An original Tesla Roadster.

Telsa Motors


The Roadster combined high-performance with a save-the-planet mission.

tesla roadster An original Tesla Roadster.


Wikimedia Commons



The previously best-known electric car was the innovative EV1, introduced in the 1990s, but infamously killed by General Motors.

GM EV1 1996 A General Motors EV1.

General Motors


The original Tesla Roadster, with its sub-4-second 0-to-60 mph time, proved that an electric car could be more than a glorified golf cart.

golfers golf cart A golf cart.


Reuters/Carlo Allegri



The mission was clear, but it needed a compelling megaphone in the person of CEO Elon Musk. After selling PayPal to eBay in 2002, Musk sunk hundreds of millions of dollars into Tesla and other futuristic ventures.

Elon Musk Tesla CEO Elon Musk unveils what was then the new Tesla factory in Fremont, California, on Wednesday, Oct. 27, 2010.

AP


Musk cultivated the image of a maverick nerd who lived by his own rules.

Elon Musk Elon Musk smokes during an interview on the Joe Rogan podcast in September 2018.

Joe Rogan Experience/YouTube


His brand-building wasn’t limited to Tesla. With SpaceX, he sought to make humanity “multi-planetary,” to “back up the biosphere” by ushering in a new age of private spaceflight, with an ultimate goal of colonizing Mars.

Elon Musk Elon Musk speaks at a SpaceX briefing.

John Raoux/AP Images


He was like a science-fiction film character, at times a hero, at times something of a villain — or at least a controversial antihero. He mingled with celebrities. At times, he did more than mingle. After three marriages (twice to Talulah Riley), he partnered with musician Grimes (real name: Claire Elise Boucher). The two later welcomed a son to the world.

Elon Musk Grimes Elon Musk and music artist, Claire Elise Boucher, professionally known as Grimes.

Theo Wargo/Getty Images for Huffington Post


A big part of the Tesla brand was Musk’s seemingly reflexive, problem-solving entrepreneurship, cultivated in Silicon Valley. After he got stuck in LA traffic en route to SpaceX HQ, he founded the Boring Company to dig tunnels under the freeways.

elon musk boring company Elon Musk and Boring Company president Steve Davis.

The Boring Company


He also served as chairman of his cousin Lyndon Rives’ startup, SolarCity. Tesla acquired the company in 2016. Musk’s master plan was to power electric vehicles, among other things, by using what he called the giant fusion reactor in the sky — the Sun.

elon musk solarcity Then-SolarCity chairman Elon Musk is seen in this December 2012 photo attending the company’s IPO in New York.

Mark Von Holden / AP


Tesla’s brand was built using almost zero money spent on advertising. Instead, Musk presided over spectacular product unveilings, such as the New Roadster in 2017.

Tesla Roadster Elon Musk presents the new Tesla Roadster in 2017.

Tesla


Musk also put himself out there as the leading high-tech business leader with ideas about how to decarbonize the planet and head off a global-warming disaster. In 2015, he gave a speech at the Sorbonne calling for a carbon tax.

Elon Musk in Paris Elon Musk speaks at the Université de Paris Panthéon Sorbonne in Paris, France, in 2015.

Screenshot


Musk also moved quickly when Donald Trump was elected president in 2016. The CEO wanted to press the carbon-tax case with the chief executive.

elon musk donald trump Elon Musk is pictured alongside President Donald Trump at the White House on February 3, 2017.

Evan Vucci / AP


Musk also kept Tesla in the news for less virtuous reasons. A failed effort take the company private in 2018 landed him in trouble with the Securities and Exchange Commission. He wound up losing his chairman title and had to pay a multimillion-dollar fine.

Elon Musk arrives at court for SEC hearing Elon Musk arrives at Manhattan federal court for a hearing on his fraud settlement with the Securities and Exchange Commission (SEC) in New York City, April 4, 2019.

REUTERS/Brendan McDermid


Musk also routinely taunted prominent Wall Street short sellers, at one point in 2020 creating Tesla-branded short shorts.

Tesla shorts Tesla’s limited-edition shorts.

Tesla


In fact, the entire Tesla-Wall Street story contributed to the brand. By 2020, after a monumental rally, Tesla had become the most valuable automaker in the world, worth $300 billion. Early investors were sitting on a 6,350% return.

Elon Musk, CEO of Tesla Motors, poses with a Tesla car in front of Nasdaq after its IPO Elon Musk stands in front of the Nasdaq sign in Manhattan, New York, June 29, 2010.


AP PhoAP Photo/Mark Lennihan



Signup Today: Free Daily Newsletter from Business Insider Intelligence

LoadingSomething is loading.

More:

Features
BITranspo
analysis
Tesla Take

Chevron iconIt indicates an expandable section or menu, or sometimes previous / next navigation options.