And Suddenly, Tesla Becomes a $5.9 Billion Car Brand with 32% Jump in Value
Demand for Tesla's driverless features as well as its ultra-long battery ranges and a reputation for offering the best-in-class electric car driving experience helped Tesla see a 32% surge in its value as a brand, topping out at $5.9 billion in the BrandZ Top 100 Most Valuable Global Brands study, released June 5.
Tesla now ranks eighth among carmakers in the study, after muscling its way past established OEMs into 10th place in last year's most-valuable car brands ranking.
Tesla's Model S and Model X offer Level 2 capabilities, including Tesla's driverless Autopilot feature for highways and lane changing. These features have served to excite consumers' imaginations because customers can see for themselves how hands-off driving actually works, Peter Walshe, Global BrandZ strategy director at Kantar Millward Brown, told Driverless.
"Consumers know driverless is going to eventually happen but they often cannot quite believe it yet. So any brand associated with driverless benefits by shaking things up and taking a lead. So if you can stick that to your brand, which Tesla is absolutely doing, then that really bodes well for people predisposed to look at, try, and ultimately buy your product. "
The BrandZ study is published yearly by the Kantar Millward Brown division of WPP, a British multinational advertising and public relations company, and one of the top-five world's largest advertising firms. It based the ranking on interviews with over three million consumers worldwide, and financial and business performance metrics, with data from Bloomberg and Kantar Worldpanel.
"The car business is an industry anticipating rapid change and many brands are already taking steps to prepare for new sales channels, changing forms of ownership and the arrival of more connected and autonomous cars," Walshe said. "The financial pressures to deliver current sales while also investing and anticipating the future are placing established brands under great pressure and creating space for newcomers like Tesla to power ahead. Strong brands will not only help car groups boost existing revenues but encourage consumers to stick with them as the vehicle they drive changes fundamentally."
Besides driverless and battery technology on offer, Tesla's "electric take-off" driving experience largely accounted for its surge in value as a brand, Walshe said.
Tesla is regarded as the most innovative car brand and even has perceptions among non-owners of being great to drive and own.
Driverless cars and the related technology are also a significant factor in the valuations of many brands outside of the automotive space. They include Google and Waymo parent Alphabet, Amazon, Samsung, and Microsoft with its AI (artificial intelligence) development, Walshe said.