Tesla, Musk, and How to Skyrocket Your Reputation

starmanIn the stardust-covered wake of the Tesla Roadster, propelled into space by Elon Musk’s SpaceX, prevails an innovative triumph, a public relations boom, hints of environmental controversy, and a recently downtrodden stock.

In other words, people have opinions, and perhaps even more questions.

Does this incredible stunt boost Tesla’s reputation, and if so, how? And, what does this mean for Musk as CEO of Tesla and his other ventures: SpaceX and Neuralink (a San Francisco-based company developing implantable brain-computer interfaces, of course)? Is all of this starry-eyed excitement really a good move for Tesla?

First, let’s recap: On February 6, 2018, Falcon Heavy, a reusable super heavy-lift launch vehicle, successfully lifted off and launched a midnight cherry-colored Tesla convertible. At the helm was mannequin driver Starman (presumably named after the late David Bowie’s 1972 hit of the same name) guiding the vehicle into outer space on a trajectory to Mars.

Process that for a moment.

It’s preposterous, but simultaneously, the stuff of childhood wonder!

Musk tugs at the general public’s heart strings on all car and spaceship cylinders. He taps the coolness factor of childhood daydreams come true and optimism for a better tomorrow. Archaic global governmental space programs — riddled with political “Space Race” competitions, budgetary concerns, and devastating failures — are trailing behind while Musk, an endlessly innovative, entrepreneurial role model, continues to break the rules of convention and then improves upon them.

The spirit of private enterprise has taken to the cosmos with other heavy hitting multi-corporation CEOs like Richard Branson (Virgin Galactic) and Jeff Bezos (Blue Origin), but only Musk has combined his businesses, using both Tesla and SpaceX, to rally support for one another. Musk at once brought attention to Falcon Heavy’s unmatched payload capacity while crafting a Tesla advertisement with immediate global, make that, universal, reach; one estimated to orbit for up to a billion years.

Musk is a leader, he’s endlessly innovative, and these are good attributes for a good reputation. But how’s Musk doing with his commitment to corporate social responsibility (CSR)?

Did Tesla damage its corporate social responsibility score?

Falcon Heavy is a reusable super heavy-lift launch vehicle. That’s a big check in the awesome category for CSR, but that plus is for SpaceX.

The Tesla car and its mannequin driver, on the other hand, are now the equivalent of space debris, more aptly dubbed space junk. It’s an unusable floating car (or, advertisement) that will decay in time. Plus, with 34 million miles on it, the resale value will be tough.

It is helpful that the junk is outside of Earth’s orbit, but we certainly don’t want to be known in the universe as the planet who litters up the joint with our extravagant $100K cars.

falconheavyTwitter

There is a bit of negative sentiment out there. When some can barely afford transportation at all, how can someone haul a six-figure vehicle out to space? When posed in this light, the whole thing starts to feel like the epitome of pretentious materialism, and a little icky. That said, and perhaps even worse, Tesla’s Q4 earnings took a small plunge.

Tesla stock takes a tumble

In the days immediately following the launch, TSLA took a dramatic dip, even steeper than the recent broader market selloff. TSLA recently suffered a GAAP loss per share of $4.01, its worst drop to date. Bloomberg says TSLA is on track to hit its lowest share price in two years, noting production delays, competition, and reliability.

How does this impact Tesla’s reputation?

In the US, Tesla earned a 2017 RepTrak® score of 77.40. This means, out of a scale of 100, Tesla’s reputation is considered strong. Tesla’s score is significantly ahead of other major US automobile manufacturers like Ford and GM – not bad for a company founded a mere 14 years ago.

Our corporate reputation experts at Reputation Institute predict that while Tesla’s overall score may be saved by its innovation attributes, its potentially risky environmental behavior may cause a reputation dip.

Still, no matter how the data is sliced, the recent launch of Falcon Heavy is likely to help Tesla build more familiarity among the general public. Our research shows that an increase in familiarity typically results in a stronger company reputation. An increasing number of people now know and can speak confidently about what Tesla is and does.

What do we know about how reputation impacts Tesla’s bottom line?

At the SpaceX news conference, Musk denies this was a PR stunt, calling it all “silly and fun.” He said, “It’s literally a normal car in space. I like the absurdity of that. Normally they’d launch a block of concrete or something, that’s boring.”

He’s right. Either way, there would have been some kind of space debris launched out there, his is simply a more playful, albeit extravagant, choice. PR stunt or not, it got plenty of news coverage, and our attention.

With questionable environmental concerns and a declining stock, it’s safe to say the glory went to SpaceX. But Tesla is the company from where people can buy products and its reputation may have taken a hit.

However, its CEO seems to be doing just fine. Could this be a case where the CEO’s reputation outshines the company’s? And was this part of Musk’s plan all along?

In one moment, Musk launched two incredibly powerful vehicles into space, while simultaneously launching his own reputation as a leader and innovator across both the automotive and aerospace engineering industries. The number of Musk fans continues to grow, and not all of them can afford to own a Tesla. He’s the company’s future, and its insurance policy.

PS: If you’d like, you can watch four hours of Starman in orbit…

MelanieLoBue

Melanie LoBue
Director of Digital Content Marketing
Reputation Institute
mlobue@reputationinstitute.com

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