J of Product Innov Manag - 2024 - Palmié - Valuation entrepreneurship through product‐design and blame‐avoidance strategies

Received: 29 April 2022 Revised: 30 January 2024 Accepted: 5 March 2024
DOI: 10.1111/jpim.12732
ORIGINAL ARTICLE
Valuation entrepreneurship through product-design and

blame-avoidance strategies: How Tesla managed to change
the public perception of sustainable innovations
Maximilian Palmié 1 | Lucas Miehé 2 | Johanna Mair 3,4 | Joakim Wincent 5,6
1
Institute of Technology Management,
University of St. Gallen, St Gallen, Abstract
Switzerland Developing innovative, eco-friendlier products that gain traction in the mass
2
Department of Management, market remains a persistent challenge for many firms. To bring consumers to
Technology, and Economics, ETH Zurich,
choose “greener” alternatives over conventional products, firms need to over-
Zurich, Switzerland
3
Hertie School, Berlin, Germany
come prevailing product evaluations that favor traditional solutions. Research
4
Stanford Center on Philanthropy and on valuation entrepreneurship examines the strategies that actors apply to
Civil Society, Stanford University, induce changes in established evaluations. Adding to the emerging literature
Stanford, California, USA
on valuation entrepreneurship, our study analyzes how the car maker Tesla,
5
Global Center for Entrepreneurship &
Inc. used product design—material artifacts' properties of form and function—
Innovation, University of St. Gallen, St
Gallen, Switzerland to advance the public perception of battery electric vehicles (BEVs). When
6
Entrepreneurship and Innovation, Tesla entered the market, several firms had tried to promote BEVs as a way of
Hanken School of Economics, Helsinki, making private mobility more environmentally friendly, but with limited suc-
Finland
cess. In contrast, Tesla produced well-received BEVs that generated enormous
Correspondence consumer interest and led to a more favorable assessment of BEVs as a whole.
Maximilian Palmié, Institute of
Drawing on 54 interviews and nearly 2000 pages of archival data, our abduc-
Technology Management, University of
St. Gallen, St Gallen, Switzerland. tive study identifies three product design strategies that increased the appeal of
Email: maximilian.palmie@unisg.ch Tesla's initial models: (1) incorporating discontinuous technological solutions;
(2) optimizing the products on traditional evaluation criteria (e.g., driving per-
Funding information
Swiss Federal Office of Energy, SWEET formance, comfort, space, status); and (3) creating an ecosystem of comple-
PATHFNDR mentary products. Since some design choices came at the expense of a
Special Issue Guest Editors: Fiona
minimal environmental footprint, they risked attracting blame for compromis-
Schweitzer, Tobias Röth, Julian ing on the environmental performance of potentially eco-friendly cars and for
Birkinshaw, and Gloria Barczak committing “greenwashing.” To minimize this risk, Tesla complemented its
design strategies by employing three strategies of reputational politics to avoid
such blame. After Tesla's initial, lavish models had improved the public per-
ception of electric cars, Tesla and other car makers were able to sell less exces-
sive and more sustainable BEVs in much greater quantities than ever before.
Our findings contribute to three literature streams and generate valuable
insights for management practice.
This is an open access article under the terms of the Creative Commons Attribution-NonCommercial License, which permits use, distribution and reproduction in any
medium, provided the original work is properly cited and is not used for commercial purposes.
© 2024 The Authors. Journal of Product Innovation Management published by Wiley Periodicals LLC on behalf of Product Development & Management Association.
644 wileyonlinelibrary.com/journal/jpim J Prod Innov Manag. 2024;41:644–676.

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ET AL.
PALMIE 645
KEYWORDS
abduction/abductive research, blame avoidance, material artifacts, product design, valuation
entrepreneurship
1 | INTRODUCTION
Practitioner points
“The [Tesla] Model S completely delivered • Many sustainable innovations struggle to
on its promise to change how the world achieve widespread adoption.
thought about electric cars. EVs were no lon- • Tesla, Inc. managed to create a hype around
ger the vegetables you should eat – they electric vehicles that had, for decades, failed to
became the dessert you desired.” (Jake scale.
Fisher, Senior Director of Consumer Reports' • Our study identifies product-design strategies
Auto Test Center [cited in Consumer that allowed Tesla to improve the attractive-
Reports, 2022]) ness of electric cars to the public. Tesla had to
engage in reputational politics to avoid criti-
Innovative, eco-friendlier alternatives will have to cism and blame for some of its product-design
replace prevailing, conventional products if societies want decisions.
to reduce their environmental footprint—a popular goal • Using abductive reasoning, our study develops
among various stakeholders (Bammens & a model of how companies can induce more
Hünermund, 2023; Zhao et al., 2023). To date, however, favorable consumer perceptions of sustainable
most companies continue to struggle with creating sustain- innovation so that consumers are more likely
able innovations that resonate well with consumers, that to switch to “green” new products.
sell in the desired quantities, and that have a profound
impact on their markets (Heidenreich et al., 2017;
Paparoidamis et al., 2019). Since product choices are driven artifacts encodes ideational content into durable form so
by conscious or unconscious evaluations of the competing that the content can be easily preserved and shared over
alternatives (Dixon & Mikolon, 2021; Paparoidamis time and space (Boxenbaum et al., 2018; Jones
et al., 2019), consumers' persistent reluctance to “buy et al., 2016). Third, the design of material artifacts is acces-
green” indicates that sustainable innovations are commonly sible through the senses, whereas words need to be pro-
not evaluated favorably enough (Luchs & Kumar, 2017; cessed cognitively (Jones et al., 2017). Many consumers,
Olson, 2013). Firms' ability to improve the public percep- therefore, experience faster and stronger affective reac-
tion of these innovations is, therefore, essential for the tions to material artifacts than to verbal text (Huff
widespread adoption of eco-friendlier alternatives. et al., 2021; Jones et al., 2017). Hence, the scarcity of
Companies working to induce changes in prevailing research on product design strategies—and material arti-
consumer evaluations engage in “valuation entrepreneur- facts more generally—in the valuation entrepreneurship
ship” (Sgourev, 2021; Zuckerman, 2012). Scholars started literature leaves a crucial knowledge gap.
to investigate the strategies that companies can apply for Our study helps close this gap by addressing the
this purpose. Prior research on valuation entrepreneurship research question: How can firms design eco-friendly prod-
has mostly focused on discursive strategies (e.g., Cutolo & ucts and complement their product design strategies with
Ferriani, 2023; McDonald & Gao, 2019; Taeuscher (reputational) political strategies to induce more favorable
et al., 2021; Vossen & Ihl, 2020), whereas product design consumer evaluations of sustainable innovations? To tackle
strategies have received scant attention (cf. Huff this question, we perform a qualitative analysis of Tesla,
et al., 2021; Jones et al., 2017; Sgourev, 2021). Design strat- Inc. (previously known as Tesla Motors, Inc.). Tesla pro-
egies endow material artifacts with properties of form and duced very well-received battery-electric vehicles (BEVs) at
function that provide utilitarian, hedonic, and semiotic a time when other BEV manufacturers failed to do the
benefits to their users (Bloch, 2011; Luchs & Swan, 2011). same. Tesla's approach not only affected the popularity of
Considering design strategies in the context of valuation its own cars but changed the public perception of BEVs as
entrepreneurship is important for three reasons. First, an a whole (e.g., Long et al., 2019; Niedermeyer, 2020). Draw-
artifact's design—its properties of form and function—is a ing on 54 interviews and a myriad of archival data, we
key determinant of its evaluation (Luchs & Swan, 2011; reveal three design strategies that increased the appeal of
Nakata & Weidner, 2012). Second, the design of material Tesla's products and set them apart from other BEVs.
646 JOURNAL OF PRODUCT INNOVATION MANAGEMENT
Furthermore, our analysis identifies three strategies of rep- and pay less attention to other types of innovation
utational politics with which Tesla complemented its (e.g., process innovation, organizational change, and mar-
design strategies and shielded its BEVs from criticism that keting solutions). Thus, we define sustainable product
could have negatively affected their reception. Specifically, innovation as the “introduction of any new or significantly
Tesla produced powerful and luxurious vehicles whose lav- improved product (good or service) […] that reduces the
ish design rendered them environmentally questionable. use of natural resources (including materials, energy, water
As Tesla's claimed ambition was to make mobility more and land) and decreases the release of harmful substances
sustainable, Tesla could have been blamed for “greenwash- across the whole life-cycle” (Vasileiou et al., 2022, p. 3).
ing” (cf. Patala et al., 2019). Tesla's (reputational) political Sustainable innovations display common advantages
strategies allowed it to avoid blame for compromising on and disadvantages over innovations that do not emphasize
the environmental performance of its cars, whereas other sustainability. On the upside, consumers may derive addi-
manufacturers with similar BEVs (Fisker Karma, BMW i8) tional benefits from using environmentally friendly prod-
met insurmountable resistance. Thus, our analysis high- ucts (e.g., a clear conscience, a progressive image) (Dixon &
lights the relevance of a core concept from the political Mikolon, 2021). Likewise, offering products that contribute
sciences—blame avoidance (Hood, 2010; Weaver, 1986)— to a cleaner and safer world can enhance firms' reputation
in valuation entrepreneurship. among stakeholders, yield higher revenues, and spur more
Our findings make three main contributions to the political support (Berrone et al., 2013; Zhao et al., 2023).
academic literature and management practice. First, they On the downside, sustainable innovations tend to require
expand our knowledge about material artifacts in valua- greater resource commitments, entail more distant prospec-
tion entrepreneurship, addressing a prominent research tive returns, and display positive externalities that impede
gap in this field (cf. Huff et al., 2021; Sgourev, 2021). Sec- value capture (Bammens & Hünermund, 2023; Wang
ond, scholars have recently conceptualized valuation et al., 2023; Zhao et al., 2023). Of particular importance,
entrepreneurship as an instance of institutional entrepre- however, is a problem known as the “value-action” or “atti-
neurship (Sgourev, 2021; Zuckerman, 2012) because con- tude-behavior” gap (Luchs et al., 2012; Olson, 2013;
sumer preferences are widely institutionalized (Ansari & Paparoidamis et al., 2019). According to several interna-
Phillips, 2011; Mont, 2004). By introducing the concept of tional surveys, most consumers claim to be willing to buy
blame avoidance to valuation entrepreneurship, our alternative products with a better environmental perfor-
study heeds the call to forge productive conversations mance (Chen et al., 2019; Paparoidamis et al., 2019; Ross &
between the literature on institutional change and the Milne, 2021). When it comes to actual product purchases,
political sciences (Acosta et al., 2021). For almost however, many consumers are reluctant to switch to
40 years, political scientists have been emphasizing the “greener” products (Heidenreich et al., 2017; Paparoidamis
crucial role of blame avoidance for the reputation of pub- et al., 2019). Three reasons contribute to this discrepancy
lic actors (Hood, 2010; Weaver, 1986). Since the attribu- between consumers' pro-environmental attitudes and their
tion of blame could have destroyed the favorable actual product choices. First, it can be difficult for con-
consumer evaluations of Tesla's products (cf. Gaim sumers to judge whether alternative suppliers are credible,
et al., 2021; Long et al., 2019), avoiding blame is para- their claims correct, and their products truly more environ-
mount in pursuing Tesla's approach. Our study shows mentally friendly than other solutions (Paparoidamis
how blame avoidance can be achieved. Third, our et al., 2019; Zhang et al., 2021). Second, consumption
research contributes to the marketing and innovation choices are often driven by habitual routines and not by
management literature on the development and commer- deliberate decisions (Paparoidamis et al., 2019; White
cialization of sustainable innovations by illuminating et al., 2019). Consumer preferences are widely institutional-
what companies can do to stimulate consumers' apprecia- ized (Ansari & Phillips, 2011; Mont, 2004; Thøgersen
tion of environmentally friendly products. et al., 2021). Third, many consumers have been found to
believe that sustainable products require them to compro-
mise on functional performance (Dixon & Mikolon, 2021;
2 | THEORE T I CAL BACK G ROU ND Luchs et al., 2012; Olson, 2013).
Companies that want consumers to switch to
2.1 | Sustainable innovation “greener” products need to close the attitude-behavior
gap, taking the three underlying factors into account. The
We follow definitions of sustainable innovations advanced first factor pinpoints the relevance of blame avoidance.
by the European Environment Agency and recent aca- Attracting blame is likely to damage actors' reputation,
demic publications (e.g., Vasileiou et al., 2022; Watson harm their credibility, and reduce the trustworthiness of
et al., 2018), but focus specifically on product innovations their claims (Gaim et al., 2021; Ravasi et al., 2018).
ET AL.
PALMIE 647
Occasionally, accusations directed toward one high- concerns buying stocks and lobbying for a re-evaluation
profile provider of a specific (allegedly) sustainable tech- of the associated companies in an upward direction or
nology can ultimately destroy consumers' acceptance of short selling stocks and lobbying for a re-evaluation in a
the specific technology (Gaim et al., 2021; Gross & downward direction.
Sonnberger, 2020; Long et al., 2019). The second factor Since prevailing product evaluations are typically insti-
illustrates why scholars consider valuation entrepreneur- tutionalized (e.g., Lamont, 2012; Wang et al., 2023), firms
ship as an instance of institutional entrepreneurship seeking to replace conventional products with more sus-
(Sgourev, 2021; Zuckerman, 2012). The third factor tainable alternatives need to persuade consumers to revise
underscores the critical role that properties of form and their institutionalized assessments (Cairns et al., 2014;
function—that is, product design (Bloch, 2011)—play in White et al., 2019). Thus, scholars advancing the “valua-
the approval and adoption of sustainable innovations tion entrepreneurship” terminology concluded that valua-
(Askin & Mauskapf, 2017; Ghisetti et al., 2021). Product tion entrepreneurs need to engage in “institutional
design is an integral part of the new- entrepreneurship” to challenge prevailing evaluations suc-
product-development (NPD) process (Luchs & cessfully (Sgourev, 2021; Zuckerman, 2012). In general,
Kumar, 2017; Luchs & Swan, 2011), and the widespread institutional entrepreneurship has been defined as the
concerns about the functional performance of eco- “activities of actors who have an interest in particular
friendly solutions indicate that product design is just as, institutional arrangements and who leverage resources to
if not more, important in the context of sustainable inno- create new institutions or to transform existing ones"
vations than it is generally. Despite its importance, how- (Maguire et al., 2004, p. 657). More specifically, David
ever, “scant research has focused on eco-innovative et al. (2013) define institutional entrepreneurs as “actors
product designs" (Paparoidamis et al., 2019, p. 824). The who use social skill to overcome skepticism and persuade
remainder of this theoretical background chapter elabo- others to believe the accounts they advance about the ben-
rates on each of the three factors in a dedicated section. efits of their innovations" (p. 356). While the academic lit-
erature on institutional entrepreneurship is vast, to date, it
has mostly examined how institutional entrepreneurs use
2.2 | Valuation and institutional discursive and other interactional strategies, such as rhe-
entrepreneurship toric, framing, protests, and boycotts, to induce institu-
tional change (e.g., Meyer & Vaara, 2020; Werner &
While unfavorable evaluations of sustainable innovations Cornelissen, 2014; for reviews, see Leibel et al., 2018;
are common (Dixon & Mikolon, 2021; Luchs & Micelotta et al., 2017). In contrast, scholars repeatedly
Kumar, 2017), innovations are unlikely to find wide- diagnosed a lack of research on how institutional entrepre-
spread adoption unless consumers evaluate them favor- neurs leverage material artifacts to this end
ably (Luchs et al., 2012; Paparoidamis et al., 2019). Thus, (e.g., Boxenbaum et al., 2018; Jones et al., 2017; Lawrence
if a firm wants to promote sustainable innovation suc- et al., 2013). The same pattern can be observed in the liter-
cessfully, it often needs to engage in “valuation entrepre- ature on valuation entrepreneurship. Most studies investi-
neurship” to get a critical mass of consumers to gate how valuation entrepreneurs can use discursive
reconsider their evaluations of its novel offering strategies to effect changes in evaluations (e.g., Cutolo &
(Aïssaoui, 2022; Zuckerman, 2017). Whereas “evaluation” Ferriani, 2023; McDonald & Gao, 2019; Taeuscher
refers to assessing the value of something, “valuation” or et al., 2021; Vossen & Ihl, 2020), whereas the use of mate-
“valorization” refers to changing the value of something rial artifacts for this purpose has received scant attention
(Vatin, 2013). Although valuation and evaluation denote (cf. Huff et al., 2021; Sgourev, 2021). Our study helps close
theoretically distinct activities, they “are often conflated this knowledge gap by analyzing how the design of sus-
in the literature, and intertwined in reality” tainable product innovations affects their evaluations.
(Lamont, 2012, p. 205). Lamont (2012) gives the example
of a prominent art critic who can increase or decrease the
value of an artwork (valuation) by communicating 2.3 | Material artifacts and product
his/her assessment of its value (evaluation). Valuation design
entrepreneurship, then, denotes strategies that seek
changes in prevailing evaluations, and that generate ben- Organizational theory defines artifacts as “discrete mate-
efits if the prevailing evaluations move in the correspond- rial objects, consciously produced or transformed by
ing direction (Zuckerman, 2012). Zuckerman (2012) human activity, under the influence of the physical
illustrates valuation entrepreneurship with the example and/or cultural environment” (Boutinot & Delacour,
of the stock market. Here, valuation entrepreneurship 2022, p. 1969). Each artifact possesses properties related
to its form, its function, and the integration of its form Overall, these pioneering studies indicate that product
and function that provide utilitarian, hedonic, and/or design is a promising tool for institutional and valuation
semiotic value to the user (Bloch, 2011; Luchs & entrepreneurship. This conclusion is corroborated by the
Swan, 2011; Rindova & Petkova, 2007). Utilitarian bene- marketing literature, which supports the influence of design
fits emerge from the functional usefulness of a product on consumer evaluation of products (e.g., Creusen, 2011;
and its ability to accomplish a task. Hedonic benefits Forti et al., 2020). Product design strategies, therefore,
emerge from the aesthetic appeal of the artifact and its deserve further attention in institutional and valuation entre-
ability to please a user's senses when he or she is preneurship research.
experiencing it. Lastly, semiotic benefits pertain to the
symbolic value that users derive from the interpretation
of the product (Bloch, 2011). The artifact's properties of 2.4 | Reputational politics, blame, and
form and function represent its product design blame avoidance
(Bloch, 2011; Luchs & Swan, 2011). Firms can devise
design strategies to realize the objectives they pursue by Although properties of form and function drive how
means of product innovation (Chiang et al., 2016; consumers evaluate products, the translation of product
Rindova & Petkova, 2007). A design strategy can be design into consumer evaluations is neither automatic
defined as “the effective allocation and coordination of nor fixed (Lamont, 2012; Sgourev & Althuizen, 2017).
design resources and activities to accomplish a firm's Rather, consumer evaluations are influenced by the rep-
objectives" (Olson et al., 1998, p. 55). utation of the firm selling the product, especially in the
Some studies have employed online experiments to case of unconventional offerings (Cutolo &
examine how the design of sustainable products affects Ferriani, 2023; Zuckerman, 2017). Organizational reputa-
consumer choice and adoption intentions. According to tion designates “an evaluative—and often comparative—
these experiments, the following design strategies lead representation of a focal organization [… which] influ-
to favorable consumer responses: (1) incorporating ences the behavior of stakeholder audiences toward the
innovative eco-attributes radically rather than incre- organization” (Ravasi et al., 2018, p. 574). Reputation
mentally, increasing products' level of eco-friendliness, can be a valuable intangible asset that contributes to
and positioning the eco-attributes in the products' desirable organizational outcomes (Ravasi et al., 2018).
periphery rather than their core (Paparoidamis While an organization's reputation is rooted in its
et al., 2019); (2) creating sustainable products with a actions, its actions do not completely determine its repu-
superior aesthetic design (Luchs et al., 2012); and (3) tation, which instead results from a contentious socio-
compromising on a product's hedonic value political process (Fine, 1996, 2019). Whereas firms seek
(e.g., aesthetics) rather than its utilitarian value to protect and advance their reputation, other actors
(e.g., functional performance) in case its ecological per- may have an incentive to contest and damage the repu-
formance requires compromises in its utilitarian or tation of a focal firm (Fine, 2019; Lamont, 2012). This
hedonic value (Luchs & Kumar, 2017). situation gives rise to “reputational politics,” which is
From an institutional perspective, firms can leverage about assigning credit and blame to a focal actor and
the design of material artifacts to reveal, stabilize, and convincing others of the appropriateness of this attribu-
transmit meanings by encoding them into durable output tion, in order to alter the actor's reputation in the
that can be shared and preserved (Boxenbaum et al., 2018; desired direction (Azoulay et al., 2019; Fine, 2019).
Jones et al., 2016; Rindova & Petkova, 2007). Hence, firms Political scientists suggest that the effects of credit
can employ product design as a tool for valuation and and blame on reputation are asymmetric because most
institutional entrepreneurship (Boxenbaum et al., 2018; individuals are more sensitive to perceived wrongdoings
Huff et al., 2021; Lawrence et al., 2013). Although institu- and losses than they are to perceived virtuousness and
tional research has started to demonstrate the central role gains (Malle et al., 2014; Nielsen & Baekgaard, 2015).
of material objects in instantiating, diffusing, and institu- Thus, actors who are concerned about their reputation
tionalizing novel ideas (e.g., Boutinot & Delacour, 2022; should “be at least as interested in avoiding blame for
Jones & Massa, 2013; Sgourev, 2021), very few studies have (perceived or real) losses that they [… are held responsi-
hitherto examined product design strategies for valuation ble for] as they are in ‘claiming credit’ for benefits they
and institutional entrepreneurship. Two notable excep- have granted” (Weaver, 1986, p. 372). Public actors
tions have analyzed how Thomas Edison designed his sys- indeed devote “quite some effort” (Malle et al., 2014,
tem of electric lighting to boost its acceptance p. 174) to avoiding blame, with blame designating the
(Hargadon & Douglas, 2001) and how firms designed their attribution of accountability for something “bad” or
products to gain legitimacy in the newly legalized “wrong” to a particular person or entity (Malle
U.S. cannabis market (Huff et al., 2021). et al., 2014; Sulitzeanu-Kenan & Hood, 2005). The extent
ET AL.
PALMIE 649
to which people will blame another actor typically to improve the environmental footprint of the sector
depends on their assessment of causality, intentionality, and—successfully or unsuccessfully—tried to commer-
motivation, and preventability (Malle et al., 2014). Since cialize them.1 Some of these alternative technologies,
these assessments are socially constructed, they can be including (battery) EVs, have been around for decades
manipulated and negotiated in the arena of reputational but failed to gain traction among consumers until Tesla
politics (Fine, 2019; Roulet & Pichler, 2020). Blame avoid- “accomplished its mission of accelerating the adoption of
ance, then, designates efforts to “minimize, evade, or electric vehicles" (Niedermeyer, 2020, p. 234).2 After
transfer culpability for harm or loss” (Hood, 2014, p. 2; launching a two-seater sports car with an open roof
Tu, 2022, p. 2). called “Roadster” in 2008, Tesla unveiled its first fully-
While the “theory of blame avoidance” emerged in the fledged vehicle (a luxury sedan called “Model S”) in 2012
political sciences and initially covered politicians who and “almost singlehandedly created the contemporary
wanted to improve their chances of re-election electric car zeitgeist” in North America and Europe
(Weaver, 1986), it can also be extended to managers who (Higgins, 2021, p. xv). Subsequently, the number of EVs
want to avoid “blame that might damage their organiza- on the streets expanded significantly (cf. Figure 1). Tesla
tion's autonomy and funding or could hurt their personal had successfully shifted consumer evaluations of electric
career prospects" (Nielsen & Baekgaard, 2015, p. 550). Nev- vehicles (Long et al., 2019; Niedermeyer, 2020).
ertheless, blame avoidance has so far received very little Third, automobiles represent “the quintessential manu-
attention in management research and organization stud- factured object[s]” of our times (Gauer et al., 2022, p. 4).
ies (Hood, 2010; Titus & Mbaraonye, 2023) and its under- They form “a complex, self-reinforcing socio-material system
standing “remains curiously obscure” (Hood, 2007, p. 198). that is strongly intertwined with technology, culture,
Two reasons render valuation entrepreneurship a fruitful norms, and practices in most modern countries"
context for studying reputational politics and closing this (Sovacool & Axsen, 2018, p. 731). This system extends
knowledge gap. First, the reputation of an organization beyond the circles of car afficionados and comprises large
affects how consumers evaluate its innovative products and sections of society in North America and Europe
reflects how effective the organization is in its attempts to (Bourdieu, 1984; Gauer et al., 2022). For instance, suburban
change their evaluations (Cutolo & Ferriani, 2023; mothers have been found to use cars “to create the (middle-
Sgourev & Althuizen, 2017). Second, some scholars call the class) identity of a ‘good’ mother” (Schwanen, 2015,
actors engaging in reputational politics “reputational entre- p. 306). By choosing a particular type of car, make, or
preneurs" (e.g., Fine, 1996, 2019), thereby proposing the term model, “people define and communicate who they are,
“reputational entrepreneurship” as a synonym for reputa- expressing interests, beliefs, values, and social status"
tional politics. Due to the evaluative nature of reputations (Heffner et al., 2007, p. 398). The widespread association of
(Ravasi et al., 2018), reputational entrepreneurship has, in cars with symbolic and affective values in many Western
turn, been depicted as a special form of valuation entrepre- societies implies that “purely technical perspectives […]
neurship (Zuckerman, 2012). This depiction corroborates remain insufficient to facilitate broad social acceptance” of
the compatibility of valuation entrepreneurship and reputa- electric cars (Sovacool & Axsen, 2018, p. 743). The transi-
tional politics. Since blame avoidance assumes a crucial role tion to electric vehicles, therefore, represents an intriguing
in reputational politics, it will be relevant to valuation entre- setting to study valuation entrepreneurship, which has been
preneurship as well. The examination of how Tesla managed conceptualized as an instance of institutional entrepreneur-
to avoid excessive blame while promoting electric mobility ship (Sgourev, 2021; Zuckerman, 2012) to reflect the
is, therefore, an integral element of our study.
1
The alternative technologies claiming to be more sustainable than the
dominant drive technologies (notably, internal combustion engines
3 | METHODS powered by gasoline or diesel fuel) include battery electric vehicles
(BEVs), often simply called “electric vehicles” (EVs), fuel cell electric
vehicles (FCEVs), occasionally simply called “fuel cell vehicles” (FCVs)
3.1 | Research setting powered by hydrogen or ethanol, and natural gas vehicles (NGVs)
whose internal combustion engines burn methane. This methane can
The mobility sector provides a fruitful empirical take the form of liquified natural gas (LNG), compressed natural gas
setting to study how companies can induce more favor- (CNG), or biogas.
2
able consumer evaluations of sustainable innovations for Many national governments had long implemented tax incentives to
replace conventional gasoline-fueled cars with BEVs—in the case of the
several reasons. First, mobility accounts for roughly 25%
United States, for instance, 20 years ago (Hardman et al., 2017; Stokes &
of CO2 emissions globally, making it one of the sectors Breetz, 2018). However, the effect of the tax incentives on BEV
with the highest potential for saving greenhouse gas registrations remained limited, and they were relatively expensive
(IEA, 2019). Second, firms developed several technologies (Yan, 2018).
FIGURE 1 Development of car registrations in Europe over time. Based on ACEA (2021).
institutionalized nature of consumer evaluations and (Long et al., 2019). Interestingly, although Tesla models
behavior (e.g., Lamont, 2012; Thøgersen et al., 2021). seem to have prompted generally positive perceptions of
At the time Tesla launched the Roadster and the BEVs, they were not the most frequently selected as a
Model S, most manufacturers of EVs had previously pro- potential BEV purchase in Long et al.'s (2019) study. This
duced very basic automobiles, which compromised on the discrepancy substantiates the impression held by many
driving experience (e.g., size, power) to optimize their industry observers that Tesla's efforts are not only
environmental performance. This sufficiency approach benefitting its own cars but electric vehicles as a whole
was still the norm when Tesla entered the market. In the (e.g., Consumer Reports, 2022; Dyer & Gregersen, 2016;
early 2010s, it was pursued by companies such as General Higgins, 2021).
Motors (with the Chevrolet Volt, a hybrid) and Nissan Since many prior and contemporary manufacturers
(with the Leaf, a purely electric vehicle). Very few compa- failed to do the same, Tesla's success emerged as a surpris-
nies at the time compromised, as Tesla did, on their EVs' ing and puzzling anomaly that called for an explanation
environmental performance in favor of luxury and sporti- (cf. Plakoyiannaki & Budhwar, 2021; Welch et al., 2013).
ness. The most prominent examples—and closest competi- Tesla represents an extreme and revelatory case that pro-
tors to Tesla in the North American and European vides insights into a phenomenon about which relatively
markets—from the early to mid-2010s were BMW (with little is known (cf. Eisenhardt, 1989; Tracey et al., 2018).
the i8) and Fisker (with the Karma). In contrast to Tesla's Single case studies are an appropriate design for the exam-
purely electric cars, the i8 and the Karma were hybrids. ination of exceptional cases (Tracey et al., 2018;
Although these four cars (BMW i8, Fisker Karma, Chevro- Yin, 2018). We therefore adopted the single-case approach
let Volt, Nissan Leaf) attracted more consumer and media to study our research question, focusing on Tesla.
attention than other non-Tesla BEVs, none of them came Tesla was established in 2003 and unveiled the con-
close to creating the hype of the Model S. The BMW i8, cept of an open-top sports car in 2006 whose limited-
the Fisker Karma, and the Chevrolet Volt have all been production run started in 2008. In parallel to producing
discontinued since—their manufacturers do not offer cur- the Roadster, Tesla developed the Model S as a luxury
rent generations of these models. sedan that could seat up to seven passengers. The first
Our study was motivated by observing Tesla's extraor- units of the Model S were shipped to its customers in
dinary success in altering the public perception of electric 2012. In 2020, Tesla reported its first full year of profit,
vehicles in North America and Europe. Large-scale sur- remaining profitable in 2021 and 2022. Our study is inter-
veys and analyses of postings on social-media websites ested in the product design strategies and the comple-
corroborate the significant improvements in the public mentary (reputational) political strategies that Tesla
perception of BEVs since 2011 (Carley et al., 2019; employed between announcing its first cars and becom-
Ruan & Lv, 2022). In a sample of 1500 consumers famil- ing profitable. These strategies allowed Tesla to appeal to
iar with Tesla, the majority state that Tesla has affected consumers by offering powerful, luxurious, and alluring
their assessment of BEVs in several ways and that Tesla EVs while avoiding blame for producing allegedly eco-
has piqued their interest in buying or leasing a BEV friendly cars whose environmental performance was
ET AL.
PALMIE 651
T A B L E 1 Key milestones in the development of Tesla, Inc. reinterpreted” (Paavilainen-Mäntymäki et al., 2020,
(2006–2020). p. 230). Going back and forth between the theory and
Date Milestone
data allowed different theoretical lenses to emerge or
submerge (Dubois & Gadde, 2014; Plakoyiannaki &
07/2006 Open-top-sports-car (Roadster) concept revealed
Budhwar, 2021). We initially considered the literature on
08/2006 “Secret Tesla Motors Master Plan” published on nonmarket strategies as a theoretical foundation but later
company blog
redirected our focus to institutional theory and the litera-
02/2008 First Roadster sports cars delivered to customers ture on valuation entrepreneurship. We subsequently
03/2009 Luxury sedan (Model S) concept revealed advanced the body of knowledge on valuation entrepre-
06/2012 First Model S sedans delivered to customers neurship by building on rich empirical data (Dubois &
09/2012 First charging station revealed Gadde, 2014; Strauss & Corbin, 2007). Elaborating theory
11/2012 Model S named Motor Trend's “Car of the Year
in this way employs abductive reasoning in the broader
2013” sense of the term, which is not restricted to “the use of
known rules to explain a fact or observation but [… also]
05/2013 First quarterly profit reported
include[s] making up new rules to explain surprising
10/2014 Autopilot software announced; Autopilot hardware
facts and observations" (Fisher & Aguinis, 2017, p. 443).
included in every car built shortly thereafter
10/2015 First Model X SUVs delivered to customers; about
9 months of “production hell” followed
3.3 | Data collection
10/2015 Over-the-air software update releases Autopilot
functionality
Our data collection started with a workshop with three
03/2016 Mid-size sedan (Model 3) announced
mobility executives of multi-utility providers to hear their
07/2016 “Master Plan, Part Deux” published on company opinions on the enablers and barriers encountered in the
blog transformation toward sustainable drive technologies.
10/2016 After deadly car crashes, switch to self-developed We then conducted semi-structured interviews with key
Autopilot hardware announced; claim that Tesla informants whom we identified by desk research and
could demonstrate a car driving from LA to NYC
snowball sampling (suggestions by other informants). We
“without the need for a single touch, including the
guaranteed the informants anonymity to prevent them
charger”
from glorifying the activities and role of their organiza-
07/2017 Start of production of Model 3 sedan; another year
tions (Yin, 2018). Our primary data stem from 54 semi-
of “production hell” followed
structured interviews and two workshops (in the second
11/2017 Semitruck and new Roadster concepts revealed
workshop, we presented our findings to the participants
02/2018 Roadster sent into space of the first workshop). Our informants represent 32 differ-
10/2018 Full-self driving becomes an “off-menu option” ent organizations. We interviewed informants from the
2020 First full calendar year of profitability automotive industry (e.g., car dealers, repair shops, sup-
Note: Partly based on information provided by Higgins (2021) and
pliers), firms affected by the transformation toward EVs
Niedermeyer (2020). (e.g., multi-utility providers, gas stations) and third
parties (associations, authorities, research institutions)
across different positions (e.g., board members, C-level
compromised by their lavish nature. Table 1 provides an executives, directors, and managers) to yield diversified
overview of key milestones in the development of Tesla insights. Notably, we made sure to include some propo-
between 2006 and 2020. nents of Tesla (e.g., members of Tesla fan clubs), some
proponents of electric vehicles in general but not Tesla in
particular (e.g., an executive from a competing EV manu-
3.2 | Research approach facturer; car dealers selling EVs from other brands), some
Tesla critics and EV skeptics (e.g., representatives of asso-
Rather than relying on theory-free observation, we drew ciations promoting sustainable drive technologies other
on our exposure to existing theories, consulting the theo- than EVs), and many interviewees who had no profes-
retical literature from the outset (Paavilainen-Mäntymäki sional stakes in the success of one drive technology over
et al., 2020; Plakoyiannaki & Budhwar, 2021). Thus, our another (e.g., directors of research institutes; executives
qualitative case-study design follows contemporary writ- in charge of all future mobility issues in their organiza-
ings that “are converging on […] an abductive, non-linear tions). The interviews were carried out between January
process where theory and data are successively 2020 and April 2022. They could draw from respondents'
extensive experience in their respective fields, with most TABLE 2 Overview of primary data sources.
informants already working on mobility topics when Interviews
Tesla launched the Model S in 2012. The interviews
Position of
lasted from 20 min to 3.5 h with an average duration of # Interviews Informant Organization
58 min. Fifty-two of the fifty-four interviews were
1 Director Association A
recorded and subsequently transcribed, resulting in a
4 Manager Association B
total of 44 h of interview material and 859 pages of tran-
1 Board Member Association C
scripts. For the two interviews that we were not allowed
1 Manager Association D
to record, we took detailed notes. The two workshops
1 Director Association E
lasted an entire morning each and were followed by
lunches that we used for “off the record” talks. The first 1 Manager Association F
workshop was recorded, whereas the second had detailed 1 Manager Association G
notes taken. An overview of our primary sources is pro- 1 Director Car Dealer A
vided in Table 2. 1 Director Car Dealer A
In addition to conducting interviews, we collected 1 C-Level Executive Car Dealer A

(Retired)
secondary data issued by Tesla, such as annual reports,
1 Salesman Car Dealer B
tweets, and website information, as well as third-party
data about Tesla (e.g., videos, newspaper coverage, 1 Director Car Dealer C
books). We used this secondary material to enrich our 1 C-Level Executive Car Dealer C
database and for triangulation purposes (see below). 1 C-Level Executive Electric Vehicle Producer
Some of the secondary material was produced before our 1 Board Member Energy Material Provider
study commenced, with several pieces dating back to the 1 C-Level Executive Energy Supply Company A
early 2000s. In total, our secondary data consisted of 3 Manager (Retired) Energy Supply Company A
63 items with a total of 1996 pages and 69 min of video 4 Director Energy Supply Company B
(cf. Table 3). In addition to collecting linguistic data, we 1 Manager Energy Supply Company C
gained experience with physical artifacts—the Tesla cars 1 C-Level Executive Energy Supply Company E
themselves. 1 Manager Energy Supply Company F
1 C-Level Executive Energy Supply Company G
2 Consultant Energy Supply Company H
3.4 | Data analysis 1 Manager Energy Supply Company I
1 Director Gas Station Company A
We built a database for the present study containing all
1 Director Gas Station Company B
relevant transcripts, notes, and archival documents. We
1 Consultant Independent A
started our analysis with an open coding (Strauss &
1 Consultant Independent B
Corbin, 2007) of the interviews and the workshops. After
1 Committee Member Leisure Club
completing some interviews, we started to produce a
2 Manager Public Administration
write-up of the development of Tesla, its cars, and related
1 Director Public Administration
products. In this process, we relied heavily on our sec-
1 Manager Public Administration
ondary material, as major events, plans, and announce-
5 Director Research Institute A
ments were taken up by public media and accompanied
by comments from Tesla as a firm or from individual 1 Director 1 Research Institute B
high-profile representatives of the firm (e.g., its CEO, 1 Director 2 Research Institute B
Elon Musk). 2 Director Retailer A
Thereafter, we coded our data using a three-stage cod- 1 Director Retailer B
ing process in the tradition of Van Maanen (1979) 1 Director Think Tank
(cf. Crosina & Pratt, 2019; Pratt, 2009; Pratt et al., 2006). 1 C-Level Executive Think Tank
We started with the creation of “provisional codes" to 54 Interviews in total 32 different organizations
understand our informants' perspectives. We then created Workshops
“axial codes,” clustering our provisional codes into
# Workshops Participants Objective
broader, more abstract codes. Finally, we clustered the
1 Three executives from multi-utility “Kick-off”
axial codes into theoretical codes, which ultimately formed providers
the basis of our resulting framework (cf. Ramus 1 Three executives from multi-utility Validation
et al., 2017). As our manuscript evolved, we repeated the providers
ET AL.
PALMIE 653
TABLE 3 Overview of secondary data sources. “product design.” Second, some statements addressed how
Tesla communicated and interacted with its stakeholders
Type # Items Length
and how these activities affected Tesla's image and reputa-
Blog posts 6 19 pages
tion. These statements were assigned to the category “rep-
Books and book chapters 7 1193 pages utational politics.” Third, some statements dealt with the
News articles 18 118 pages utilitarian, hedonic, and semiotic benefits that Tesla's cars
Others a
5 10 pages offered to their users. These statements were assigned to
Surveys and reports 8 605 pages the category “value proposition.” Fourth, some statements
described how battery electric cars from Tesla and other
Teaching cases 3 50 pages
manufacturers were received, perceived, and assessed by
Tweets 6 1 page
their users and the wider public. These statements were
Videos 10 69 min assigned to the category “consumer evaluations.” Our data
Total 63 1996 pages +69 min structure is visualized in Figure 2 and a proof-quote
“Other sources” comprise websites, mission statements, and press releases.
a scheme is presented in the Table A1.
We followed multiple recommendations to ensure the
coding process to accommodate the feedback from our edi- rigor of our case study, eliciting feedback from key infor-
tors and reviewers. In doing so, we cycled back and forth mants and peers and applying multiple forms of triangula-
between our data and the theoretical literature tion (Gibbert et al., 2008; Gibbert & Ruigrok, 2010; Goffin
(Eisenhardt & Graebner, 2007), adapting the coding et al., 2019). We presented our findings to scholars at aca-
scheme and framework iteratively and using theory and demic conferences, to practitioners in a second workshop
empirical observations to link the constructs of our result- (with the three executives from the first workshop), and to
ing framework (which is displayed in Figure 3 below). mixed audiences in public talks. We employed three differ-
These iterations changed our theoretical codes and the cat- ent types of triangulation (Patton, 2015). First, for data tri-
egories in our framework (Fisher & Aguinis, 2017; Grodal angulation, we relied on multiple data sources (multiple
et al., 2021). Specifically, some categories were dropped, respondents in and across organizations; secondary data
others were merged into a single category, and a new cate- from Tesla; secondary data from third parties; experienc-
gory emerged (Grodal et al., 2021). ing artifacts [inspecting and driving Tesla cars]). Second,
We initially consulted the literatures on nonmarket investigator triangulation was achieved by two members
strategy and institutional work to make sense of Tesla's of our research team who coded the data independently,
case. It became clear that these theoretical angles did not before harmonizing their results and developing a provi-
address the outcome we sought to explain.3 Thinking sional framework. The remaining members of the
about a suitable framing of our outcome, we noted that research team critically reviewed their coding and the
Tesla cars were much more favorably assessed by the framework with a “new set of eyes” (Järvi et al., 2018;
public than prior and contemporary electric vehicles Stake, 2000). Third, theory triangulation was achieved by
from other manufacturers. Moreover, this positive assess- using different theories to interpret our data. These
ment spilled over to BEVs in general (Higgins, 2021; methods strengthened the external and internal validity of
Niedermeyer, 2020). This shift in the public perception of our findings (Cook et al., 1979; Jick, 1979; Yin, 2018).
electric vehicles was the outcome we wanted to explain.
Specifically, we wanted to explain how Tesla managed to
improve the common assessment of BEVs. Going 4 | FINDINGS
through the literature, we found research on valuation
entrepreneurship that concerned itself with the question In this section, we first present Tesla's product design strat-
of how actors induce changes in widely accepted evalua- egies and their effects on Tesla's value proposition before
tions (Sgourev, 2021; Zuckerman, 2012). Framing our turning to Tesla's strategies in the area of reputational poli-
outcome accordingly, “consumer evaluations" was prede- tics and their effects on its value proposition. We observed
fined as a theoretical category. that the strategies affect the three types of value in Tesla's
Analyzing the raw data, we observed four recurrent value proposition that were suggested by Bloch (2011) and
themes. These themes are organized into four theoretical are featured in our theoretical background section: utili-
categories. First, some statements were concerned with tarian, hedonic, and semiotic value. Moreover, the strate-
material artifacts and their properties of form and func- gies are interdependent across the two categories (product
tion. These statements were assigned to the category design and reputational politics). After detailing their
interdependencies, we elaborate on the influence of Tesla's
3
We wish to thank an anonymous reviewer for pointing this issue out. value proposition on the consumer evaluations of its
FIGURE 2 Coding tree.
products. Together, the six strategies of product design 4.1.1 | Design strategy #1: Incorporating
and reputational politics allowed Tesla to enter the sus- discontinuous technological solutions
tainable mobility market with BEVs that sacrifice eco-
friendliness for driving performance and spaciousness Description
without attracting excessive blame for compromising on Tesla did not enter the automotive industry by follow-
its cars' environmental footprint. ing established conventions in this sector. Its early
models were vastly different from contemporary cars.
Notably, Tesla incorporated many more innovations
4.1 | Product design strategies: Creating into the Roadster and the Model S than were neces-
material artifacts sary to make them function as BEVs from a techno-
logical point of view. For instance, Tesla's BEVs
We identified three design strategies that set Tesla apart featured a large touchscreen shortly after Apple had
from other manufacturers of electric vehicles: (1) incorpo- launched the iPhone and even before Apple were to
rating discontinuous technological solutions; (2) optimiz- launch the iPad.
ing its first models in traditional criteria; and (3) creating
an ecosystem of complementary products. We subse- “When Tesla first debuted the Model S,
quently present each of these strategies and its respective nobody had ever seen a display that size in a
effects on Tesla's value proposition one by one. production car dashboard before […]. When
ET AL.
PALMIE 655
compared to the interior of any other car, a that still use ICEs. Thus, the (unsuccessful) proponents of
Tesla's clean, button-free touchscreen inter- alternative fuel technologies also followed a less discon-
face looks like an iPhone in a world of Black- tinuous approach than Tesla:
Berrys.” (Niedermeyer, 2020, p. 225)
“[Electromobility is more] disruptive […
Tesla further pushed the autonomous driving func- than] CNG [… which was] only like a very
tion of its cars more heavily than most other manufac- small incremental improvement.”
turers, and it pioneered over-the-air software updates in (Director, Public Administration)
the automotive industry. Such innovations gave its cars a
futuristic appearance: Effects
Incorporating discontinuous technologies allowed Tesla to
“When Consumer Reports recently found that offer utilitarian value to its customers. The Model S's perma-
the braking distance on the Tesla Model nent internet connection, for instance, allowed the driver to
3 was worse than that of a Ford F-150, CEO stream music through the touch console and to display mas-
Elon Musk took the criticism and found a sive Google maps for navigation (Vance, 2015, p. 264). It also
solution. Days later, Tesla shipped an over- allowed Tesla's engineers to make improvements to the
the-air update that […] improved the braking sedan after it was sold and Tesla's service team to “identify
distance by 19 feet. It's a wild idea: your car 90 percent of the [car's] service issues remotely and fix 80 per-
automatically downloads some code, and it's cent at an owner's home or office, [without necessitating a
instantly safer. It also wasn't possible even a burdensome trip to the shop].” (Higgins, 2021, p. 205).
few years ago, and some have held it up as an Incorporating discontinuous technologies—such as
ideal example of how futuristic technologies autonomous driving and over-the-air software updates—
can make our lives better.” (O'Kane, 2018) into its cars also provided Tesla with the foundation for
offering hedonic value to its customers. Consumer satis-
Moreover, Tesla abstained from including some estab- faction data from J. D. Power indicated that Tesla's cus-
lished technologies into its vehicles that could have made tomers experienced a considerable number of problems
them more practical. Specifically, Tesla produced purely with their cars but still reported higher levels of brand
electric instead of hybrid vehicles that combine electric excitement than the customers of any competitor
motors with conventional internal combustion engines (Higgins, 2021, p. 229). This brand excitement was driven
(ICEs). Due to their ICEs, hybrid vehicles can be refueled by the discontinuous technologies incorporated into
at ordinary gas stations like traditional cars, thereby side- Tesla's cars and the affordances of these technologies:
stepping the range limitations and the long recharging
times of pure BEVs. By opting to exclude an ICE and “[A Tesla] is not sexy because it's electric, it's
forego its advantages, Tesla could more clearly distinguish sexy because it's autonomous and because
its vehicles from the cars of the present and the past: it's […] a gadget like a new iPhone.”
(Manager, Energy Supply Company C)
“[Having a] dual propulsion facility […] is not
so interesting for the future. Plug-in hybrids Finally, incorporating discontinuous technologies
only serve one purpose in my opinion. And yielded semiotic value. It justified a higher retail price, which
that is to help the infrastructure getting estab- turned Tesla's cars into “the ultimate status symbol for
lished […] if you buy a plug-in hybrid now wealthy technophiles, allowing them to show off, get a new
you drive it for the next four years, you will in gadget, and claim to be helping the environment at the same
meantime have a charger installed at your time” (Vance, 2015, p. 267). In this way, Tesla “did not just
home and maybe at work. And the next time sell someone a car. It sold them an image, a feeling they were
you buy a car, you are likely to buy a battery tapping into the future” (Vance, 2015, p. 312).
electrical vehicle, which is a hundred percent
electric vehicle. Very likely most people will
switch.” (C-Level (retired), Car Dealer) 4.1.2 | Design strategy #2: Optimizing
product in traditional criteria
In contrast to Tesla, its main competitors pursued a
less discontinuous approach to technology. Less success- Description
ful electric luxury and sports cars such as the BMW i8 or In contrast to the typical electric vehicle of the time,
the Fisker Karma were hybrid vehicles. BEVs are also which were small, frugal cars “with unexciting accelera-
less similar to conventional cars than natural gas vehicles tion [and] a limited range” (Niedermeyer, 2020, p. 199),
Tesla was unwilling to make compromises in the perfor- planet. By contrast, Nissan's Leaf was a mod-
mance dimensions that most consumers were accus- est hatchback with unexciting acceleration, a
tomed to in evaluating automobiles: limited range, and styling that was simulta-
neously quirky and bland. [Nissan's CEO
“We're not going to compromise on a cus- Carlos] Ghosn had taken the public at its
tomers' transportation experience just to word when they said they wanted to drive a
make it sustainable.” (Jérôme Guillen, Vice- car with zero emissions and delivered a com-
President Worldwide Sales and Services at petent and affordable but ultimately boring
Tesla Motors, cited in Reinecke, 2014) appliance.” (Niedermeyer, 2020, p. 199)
When it was released, the Model S fared so well in Effects

comparison to other vehicles on the market that it won Optimizing its products in the criteria by which they are
the 2013 edition of Motor Trend's prestigious Car of the traditionally assessed created utilitarian, hedonic, and
Year award. The magazine explained its choice writing: semiotic value for Tesla's customers. The hedonic appeal
of its cars is widely considered a main reason for Tesla's
“[The Model S] drives like a sports car […, is] success, believed to trump any environmental advantages
as smoothly effortless as a Rolls-Royce, can the cars may offer:
carry almost as much stuff as a Chevy Equi-
nox, and is more efficient than a Toyota “It's not about saving resources, sure that
Prius. [… Its] electric powertrain delivers the resonates very positively, but everyone who
driving characteristics and packaging solu- buys an electric vehicle tells me first of all
tions that make the Model S stand out that it's great fun to drive around with the
against many of its internal combustion thing. […] A car purchase is rarely driven by
engine peers. But it's only a part of the story. reason.” (Director, Association A)
At its core, the Tesla Model S is simply a
damned good car you happen to plug in to Representing luxury in combination with environ-
refuel.” (Motor Trend, 2012) mental friendliness, Tesla's BEVs tend to bestow prestige
and a progressive image upon their drivers. Hence, the
The strategy of optimizing the product in the cars can satisfy the socio-emotional needs and desires of
traditional criteria distinguished Tesla from other manu- their drivers, offering semiotic value:
facturers that unsuccessfully tried to sell BEVs before
Tesla. Their cars were typically very basic to minimize “The Roadster's performance, handling and
their environmental footprint: styling exceed even the highest expectations.
People are always delighted to glimpse
“About 20, 25 years ago, there already was a it – and it's a pleasure to show off. [… The
similar hype around electric vehicles. […] Roadster is] thrilling people with its perfor-
Those were terrible boxes, weren't they? mance attributes […].” (Cochrane, 2008)
Nobody wanted them. […] With Elon Musk,
of course, electric mobility has taken on a Although many observers emphasize the hedonic and
completely different, upbeat, beautiful design semiotic benefits of Tesla cars, Tesla's product design also
[… Musk] has achieved the turnaround.” offered utilitarian advantages. Tesla overcame some of
(Manager (retired), Energy Supply the utilitarian limitations of previous BEVs
Company A) (e.g., regarding range and safety), while further pointing
to utilitarian advantages its BEVs had over ICE-powered
Tesla markedly deviated from this sufficiency cars. These advantages include a higher energy efficiency,
approach, which was still the norm when the company lower operating expenses, and the smaller size of the
launched its first models. By optimizing its cars in terms electric drivetrain. Due to its small drivetrain and its low
of sportiness and luxury, Tesla was able to sell cars that noise level, the Model S could seat five adults plus two
release positive feelings while driving: children and offer them travel in comfort (Higgins, 2021;
Vance, 2015). Tesla (2012) argued that the absence of an
“Tesla's cars were expensive, appealingly internal combustion engine and a transmission tunnel
styled luxury vehicles that could drive hun- allowed for additional cargo space and one of the most
dreds of miles and drag race any car on the spacious cabins in the segment.
ET AL.
PALMIE 657
4.1.3 | Design strategy #3: Creating an Tesla customers as eco-avant-gardists (Niedermeyer,

ecosystem of complementary products 2020, p. 111).
Description
In line with the dictum of prominent practitioners, such 4.2 | Reputational politics:
as Greg Lynn and Mark Dziersk, NPD scholars empha- Avoiding blame
sized that product design should not consider the focal
product in isolation but should take complementary 4.2.1 | Political strategy #1: Anticipating
products into account and view them as “a complemen- favorable developments
tary whole” (Luchs & Swan, 2011, p. 340; Nambisan,
2002). Correspondingly, Tesla did not restrict itself to Description
the development, production, and distribution of cars The environmental footprint of BEVs crucially depends on
but created an ecosystem of complementary goods and the origin of the electricity used to recharge their batteries.
services around them. Doing so was important because If the electricity is predominantly produced by burning
BEVs need a fundamentally different ecosystem than coal or lignite, even conventional gasoline-powered cars
cars with conventional ICEs. Tesla played a key role in can be much cleaner than BEVs. Given the dominant
the establishment of the charging infrastructure, offering means of energy production in many countries, indepen-
and implementing systems that allow its customers to dent research institutes indicate that, today, BEVs may or
recharge their vehicles on the road or at home. This eco- may not be more environmentally friendly than cars with
system perspective was so essential to Tesla's approach an ICE, especially CNG-powered ones (Director, Think
that Musk highlighted it in its original “Master Plan” Tank). Moreover, the production of batteries for electric
(2006) as well as in the “Master Plan, Part Deux” (2016): vehicles consumes some environmentally damaging mate-
rials. Compared to other contemporary BEVs, the batteries
“I should mention that Tesla Motors will be in Tesla's cars were exceptionally large because they had
co-marketing sustainable energy products to deliver enough energy to enable the cars' outstanding
from other companies along with the car. acceleration and range.
For example, among other choices, we will However, technological development is reducing the
be offering a modestly sized and priced solar amount of environmentally damaging materials in batte-
panel from SolarCity, a photovoltaics com- ries. Additionally, the share of renewable energies in the
pany (where I am also the principal finan- overall energy mix is growing globally, so that the relative
cier). This system can be installed on your environmental footprint of BEVs is continuously improv-
roof in an out of the way location, because of ing (Director 2, Research Institute B). In promoting its
its small size, or set up as a carport and will BEVs, Tesla is anticipating these favorable future
generate about 50 miles per day of electric- developments:
ity.” (Musk, 2006)
“Goal for Model S is to show that electric is
Effects way way [sic] better than gas. Combine w
Supplementing its cars with an ecosystem of complemen- solar power & the future looks bright.”
tary goods and services yielded important utilitarian, (Musk, 2012)
hedonic, and semiotic benefits for Tesla's customers.
From a utilitarian perspective, installing its own charging Directing the public's attention away from the prosaic
networks enabled Tesla to increase the usability of its realities of Tesla's business into the future, these anticipa-
cars for long-distance travel. Moreover, when customers tions made it easy for the public to ignore Tesla's current
buy complementary Tesla products, such as Solar Roofs problems and limitations (Higgins, 2021;
and Powerwalls, in addition to an EV, they save trips to Niedermeyer, 2020). Moreover, the anticipations inspired
the gas station and no longer have to pay every time they optimism among Tesla's supporters and acted as a
are “refueling” their car. With respect to hedonic value, defense mechanism against criticisms:
controlling much of the ecosystem has helped Tesla to
build close relationships with its customers and turn its “They also make convenient cudgels with
cars into a “lifestyle” (Vance, 2015, p. 312). Finally, from which to attack critics, shifting the focus
a semiotic perspective, designing complementary goods away from the company's questionable
and services lent weight to Musk's “vision of a ‘green actions to speculation about the critic's moti-
transportation ecosystem’”, thus promoting the image of vations for wanting to destroy a company
that is only trying to save the planet.” Musk did not take his followers' support for granted
(Niedermeyer, 2020, p. 162) but actively cultivated it with gestures and financial
incentives. He frequently “thanked them for their sup-
Effects port, noting, as he often did, that Tesla wouldn't be where
Such distractions from current problems allowed Tesla's it was without them” (Higgins, 2021, p. 208). When Tesla
customers to gain the maximum hedonic and semiotic went public, he also insisted that banks set aside shares
value out of their cars. If the customers were regularly to be sold to early customers (Higgins, 2021, p. 125). Fur-
confronted with doubts about their cars' environmental thermore, Tesla created a referral code system that
performance, they could develop cognitive dissonance turned owners and online-content creators into “de facto
and derive less pleasure from their vehicles (Elliot & brand ambassadors” (Higgins, 2021, p. 203). Consumers
Devine, 1994; Scheidler et al., 2019). If the public had who bought a vehicle using the referral code would get a
paid more attention to the current shortcomings and benefit, while the referrer “would earn points, almost like
taken a more skeptical stance toward Tesla, its cars might a commission for a successful sale” (Higgins, 2021,
not have bestowed a progressive image upon their p. 203). These additional incentives reinforced the
drivers, diminishing the semiotic value the cars brought engagement of Tesla's consumer advocates:
to their owners.
“[T]he twin inducements of stock promotion
and affiliate marketing had a profound effect
4.2.2 | Political strategy #2: Encouraging [… So did Tesla's] fan base find itself shifting
customer advocates from purely passionate advocates [largely
motivated by the car's high-tech cool and the
Description company's environmental mission] to inves-
A striking feature of Elon Musk and Tesla is the millions4 tors who could boost a highly lucrative stock
of dedicated followers who have been described as and earn rewards while promoting the com-
“cult-like evangelists” for the brand (e.g., Higgins, 2021; pany they loved and helping it sell cars. Once
Niedermeyer, 2020). Many of them went out of their way personal and financial motivations are
to support Tesla and help it succeed. When an early intermingled, it can become all but impossi-
adopter saw that new buyers had started to complain ble to separate them from each other.”
about issues with their vehicles on online forums, she (Niedermeyer, 2020, pp. 101–102)
contacted Tesla's management, stating:
Effects
“You have an owners group [sic] ready to do The engagement of these “de facto brand ambassadors"
just about anything for you […] how can you protected the utilitarian, hedonic, and semiotic value that
use that passion and energy to start educat- Tesla's cars provide to their owners. From a utilitarian
ing the Model 3 market so that when they perspective, it helped resolve customer complaints and
start to buy their first Tesla they do not over- offered first-time customers a proper introduction into
whelm Tesla with questions and non-prob- their newly delivered car. Moreover, Musk's followers
lems? […] How do you aim this amazing gun tended to “aggressive[ly]” defend Tesla against critics and
of Tesla owner passion at a problem that even owners who considered reporting defects to the
Tesla is sure to have in the future?” National Highway Traffic Safety Administration
(Higgins, 2021, p. 203) (Niedermeyer, 2020, p. i, p. 155). Furthermore, the activ-
ism of these “evangelists for the brand” (Higgins, 2021,
Elon Musk was not shy to ask his followers for p. 133) allowed Tesla drivers to extract the maximum
unconventional favors, such as helping Tesla deliver its hedonic and semiotic value from their cars because it
vehicles. In response to Musk's call, loyal customers contributed to the relatively low levels of criticism and
turned up at various delivery centers. They showed first- problems that reached the public's attention. Because of
time buyers “how to operate their new cars, and Tesla evangelism, Tesla owners could more easily ignore
explained life with an electric vehicle, freeing up the paid any shortcomings in their cars. A more extensive con-
staff to handle the overflow of paperwork” frontation with such shortcomings might have caused
(Higgins, 2021, pp. 303–304). cognitive dissonance and, hence, a reduction in the
hedonic value that Tesla drivers derive from their cars
4
Elon Musk's personal Twitter account, for example, had more than (Elliot & Devine, 1994). In turn, a greater awareness of
82 million followers in April, 2022. any shortcomings on the part of the general public could
ET AL.
PALMIE 659
have resulted in a less positive image of Tesla drivers, attention away from the present and toward the future.
diminishing the semiotic value the owners derive from The more that innovations technologically deviate from
their cars. the status quo, the less likely consumers are to associate
them with existing shortcomings and other current prob-
lems. Hence, offering discontinuous technologies sup-
4.2.3 | Political strategy #3: Diverting ports Tesla in anticipating favorable future
accountability developments. For instance, some observers argued that
Tesla's choice of a fully digital control panel was not
Description motivated by functional reasons but by the message it
The environmental footprint of BEVs fundamentally conveys:
depends on the means of electricity production. Thus,
while BEVs may not be more sustainable than conven- “The inherent danger of driving is also why
tional cars, they could in principle be much greener—if other automakers haven't fully eliminated
the required electricity were produced by renewable buttons and knobs to make their cars look
energy sources. This constellation enables Tesla to exter- more like smartphones. […] So if making cars
nalize the environmental-impact issue and to claim that into smartphones doesn't make much sense,
it is willing to act as a cahtalyst in combating climate why has Tesla been so successful doing just
change, but its efforts are not sufficient and other actors that? History holds the answer. People today
must play their part as well: respond to Tesla's smartphone-inspired looks
for the same reason that cars in the 1920s
“If the big industrial companies in China and borrowed cues from streamliner trains, or
the US and Europe, the big car companies, if cars in the 1950s were slathered with tail
they also do this, then collectively, we can fins, fake intakes, and other references to jet
accelerate the transition to sustainable energy. aircraft. By aligning the look and feel of its
And if government sets the rules to favor sus- products with the symbology and logic of the
tainable energy, we can get there really high-tech sector, Tesla has associated itself
quickly. [Otherwise, we're never gonna be with the transformative change that smart-
able to make the transition in time].” (Musk phones have wrought on nearly every aspect
talking to National Geographic TV, 2017) of our lives.” (Niedermeyer, 2020, p. 230)
Effects On various occasions, Elon Musk explicitly connected

Should stakeholders criticize Tesla's approach despite the his involvement in discontinuous technologies to his
activism of its customer advocates and its anticipation of intention of conveying a picture of a favorable future.
favorable future developments, spreading accountability When Tesla struggled with the production of its new
can soften the criticisms that remain. Thus, it reduces Model 3, Musk used his affiliation with Space X and
potential damage to Tesla's progressive image and secures placed a Tesla Roadster in the cargo hold of a rocket that
the semiotic value of its cars for their owners. Addition- Space X was about to send into the orbit around earth.
ally, this view on accountability allows Tesla's customers Tesla's marketing team produced an inspiring video of
to soothe their consciences and enjoy their vehicles the car in space. In a press conference, after reporting a
unabashedly, shielding their hedonic value. substantial financial loss, Musk declared: “I'm hopeful
that people think that if we can send a Roadster to the
asteroid belt, we can probably solve Model 3 production”
4.3 | Influences of product design (cited in Higgins, 2021, p. 266). By featuring discontinu-
strategies on reputational politics ous technologies heavily, a Tesla car “makes people
dream, albeit not [necessarily] on the green side. [… It
Tesla did not pursue its reputational politics in isolation offers] a new outlook on driving” (Manager, Energy Sup-
from its product design. Rather, its (reputational) politi- ply Company C).
cal strategies were partly grounded in and supported by The second influence concerns the creation of an eco-
its product design strategies. In particular, two influences system of connected goods and services around its cars,
of the product design strategies on its (reputational) polit- which makes it easier to divert accountability. It implies
ical strategies became apparent. The first influence con- that Tesla has contributed more than one can reasonably
cerns the incorporation of discontinuous technologies expect from a car manufacturer to the transition toward a
into an innovative product, which can shift consumers' clean energy system:
“The reason that we are where we are now is automaker in the world” (Niedermeyer, 2020, p. 137).
that Tesla […] has created its own ecosystem, Another example is that of the hidden, playful features in
[… including] the supply network. To say: the cars' software, which served little purpose other than
‘Okay, we don't want to wait until the utility to induce positive feelings (so-called “Easter eggs”):
companies, which are still working with
CNG or whatever, [take the lead]. If they “For all their absurdity, these Easter eggs
don't do it, we will. And we'll build our own push the boundaries of what a car can do
fast-charging network […].’ I mean, that's and what a customer's relationship with a
actually crazy.” car company can be. All of these screen-
(Director, Association E) enabled features are fundamental to Tesla's
deep appeal, if not to the actual usability of
If stakeholders were looking for a culprit that they could the vehicle itself. For a lot of fans (particu-
blame for the slow progress of the sustainability transi- larly the youngest), the quirky frivolity of the
tion, Tesla's extraordinary engagement could induce Easter eggs is the first thing they've ever
them to point the finger at other players first, before they cared about in a car, signaling that this inan-
would blame Tesla. Tesla dealt with another persistent imate object is as playful as they are and fos-
challenge to the growth of electromobility—recharging tering a deep affinity with the brand.”
BEVs on long road trips—in a similar manner. Tesla (Niedermeyer, 2020, p. 226)
declared that its charging networks are open to any man-
ufacturer whose cars are compatible with Tesla's Super- Overall, Tesla's approach succeeded in eliciting positive
chargers, indicating that Tesla is not to blame for the evaluations of its cars, which were “garnering accolades
persistence of this challenge (e.g., Reinecke, 2014). from car magazines, owners, and fans that would have a
profound impact on the way the public and the auto
industry related to electric cars" (Niedermeyer, 2020,
4.4 | Influence of value proposition on p. 83). As the positive evaluations of Tesla's vehicles
consumer evaluations spilled over to BEVs in general, Tesla “almost single-
handedly created the contemporary electric car zeitgeist”
Drawing from his experience in consumer electronics, (Higgins, 2021, p. xv). Tesla's impact is corroborated by
Tesla's co-founder, Martin Eberhard, had concluded that Long et al.'s (2019) survey of 1500 consumers familiar
the traditional approach of marketing electric vehicles— with Tesla. In this survey, between 50% and 68% of
producing frugal and design-compromised commuter respondents indicated that Tesla increased their belief
cars—was unlikely to be successful (Higgins, 2021; that BEVs possess various positive features, and 50% indi-
Niedermeyer, 2020). In an interview, Eberhard explained: cated that Tesla has stimulated their interest in buying or
“Cell-phones, refrigerators, color TV's, they didn't start leasing a BEV.
off by making a low-end product for masses" (cited in
Vance, 2015, p. 162). Instead, the latest technology
in consumer electronics was commonly sold for a pre- 4.5 | Integration into theoretical
mium first and “gobbled up by early adopters willing to framework
pay more for the cool new thing” (Higgins, 2021, p. 16),
before it went down to the mass market. Eberhard and Integrating our findings, we develop a theoretical
Musk assumed that mimicking the approach that had framework that consists of eight elements: (1) three
repeatedly generated well-received products in consumer product design strategies; (2) three (reputational) politi-
electronics should lead to favorable evaluations of EVs, cal strategies; (3) two interdependencies across the two
too (Vance, 2015). strategy categories; (4) the product's value proposition,
Some solutions included in Tesla's value proposition including utilitarian, hedonic, and semiotic value;
directly aimed at presenting its cars as “the cool new (5) the effect of each product design strategy on the
thing” and making consumers feel greater affection for product's value proposition; (6) the effect of each (repu-
its cars. One example is the unconventional and tational) political strategy on the product's value propo-
expensive-to-build door concept on which Musk insisted sition; (7) consumer evaluations of the product; (8) the
for the Model X. These “falcon-wing” doors “transformed effect of the value proposition on consumer evaluations.
the [Model] X from an awkwardly proportioned, almost Notably, we observe qualitative differences in the
pregnant-looking Model S to a high-tech transformer, a effects on the value proposition. While the product
party trick that cemented Tesla's status as the coolest design strategies mainly generate the different types of
ET AL.
PALMIE 661
FIGURE 3 Conceptual framework: Inducing favorable consumer evaluations through product design and (reputational) political
strategies.
value (“nurturing the value proposition”), the (reputa- of utilitarian, hedonic, and semiotic value comes at the
tional) political strategies predominantly defend the dif- expense of a minimal environmental footprint, these
ferent types of value from damage (“protecting the product design strategies run the risk of attracting blame
value proposition”). Figure 3 displays the developed for compromising on the environmental performance of
theoretical framework. sustainable innovations. Such blame can reduce the value
that consumers derive from the products and lead to less
favorable consumer evaluations. To avoid attracting
5 | DISCUSSION blame, companies might want to supplement their prod-
uct design strategies with proactive strategies of reputa-
Building on a case study of Tesla, our work develops the- tional politics. Our study describes three (reputational)
ory on how companies can design eco-friendly products political strategies that are complementary to and inter-
and supplement their product design strategies with rep- dependent with the identified product design strategies.
utational politics to induce more favorable consumer Favorable consumer evaluations of the desirable, but
evaluations of sustainable innovations. Our study reveals environmentally suboptimal, products using sustainable
three product design strategies that maximize the utilitar- technologies can then spill over to more modest, but
ian, hedonic, and semiotic value that consumers derive environmentally advantageous, products using the same
from innovative products using sustainable technologies. technologies. The innovating firm may also be able to
Adopting these design strategies can make sustainable spend the profits made by selling the desirable, but envi-
innovations more appealing in the eyes of consumers, ronmentally compromised, products on the development
improving consumer evaluations. Since the maximization of more eco-friendly products. Our study makes
important contributions to three literature streams and without inhibiting the transition toward more
generates valuable insights for management practice. eco-friendly BEVs later on. In this sense, our analysis cor-
roborates the appeal of a robust design in the context of
sustainable innovations. However, Tesla's approach to
5.1 | Contributions to the academic robust design displays a crucial difference to Thomas Edi-
literature son's approach. According to Hargadon and Douglas
(2001), Edison strived to make his electric lighting all but
First, our study heeds the call to examine how actors can indistinguishable from the previously dominant solution.
leverage material artifacts for the purpose of valuation Citing from Edison's notebooks, his objective was “to
entrepreneurship (Sgourev, 2021). Whereas the use of dis- effect exact imitation of all done by gas so as to replace
cursive strategies for this purpose has been researched lighting by gas with lighting by electricity … not to make
quite frequently (e.g., Cutolo & Ferriani, 2023; McDo- a large light or a blinding light but a small light having
nald & Gao, 2019; Taeuscher et al., 2021; Vossen & the mildness of gas" (Hargadon & Douglas, 2001, p. 489).
Ihl, 2020), the use of material artifacts has hitherto Elon Musk, in contrast, emphasized the discontinuous
received scant attention (cf. Huff et al., 2021; nature of Tesla's cars, making them more dissimilar to
Sgourev, 2021). Sgourev (2021) highlighted how innova- ICE-powered vehicles than would have been necessary
tive materials (tubed oil paints) and production methods for the electric drive to work. Edison sacrificed technolog-
(outdoor painting) induced impressionist painters to ical performance in favor of a more familiar user experi-
develop a distinct identity and loosely connected net- ence (cf. Hargadon & Douglas, 2001), Musk did not.
works, which they then leveraged to gain support for Musk sought to increase users' utilitarian, hedonic, and
their innovative artwork. His work does not illuminate semiotic value and optimize the user experience. The
how material artifacts themselves—their properties of “immediate effectiveness" of Tesla's design emerged from
form and function (i.e., their design; Bloch, 2011)—affect its performance in institutionalized evaluation criteria,
their evaluations by consumers. Hargadon and Douglas not from its appeal to institutionalized patterns of use.
(2001) and Huff et al. (2021) shed light on this question. Elaborating this difference between Edison and Musk,
Both studies identify the similarity of the innovative together with the associated insight that Musk's approach
products to existing, well-received offerings as a major can work as well, is particularly valuable from an NPD
determinant of favorable consumer evaluations. Studying perspective. Seeking to mimic conventional cars and tra-
the newly legalized cannabis market in some US states, ditional patterns of use favors the development of a
Huff et al. (2021) explore how the producers of innova- hybrid gasoline-battery powertrain over a purely electric
tive, legal cannabis products used product design to foster drive, as Tesla's rival Fisker and others illustrate. This
positive evaluations of their contested products. Their imitative approach can easily be problematic for new
findings suggest that designs that simultaneously create entrants because it puts them in closer competition with
alignment with existing, legitimate products and a dis- incumbents who have honed their competencies in devel-
tance from existing, illegitimate products help innovative, oping conventional products (e.g., gasoline-powered vehi-
contested products receive better consumer evaluations. cles) for decades. The competencies of an entrant in
Our findings refine their insights by illustrating that dis- many areas of conventional products are thus likely to be
tancing an innovative product from existing, widely vastly inferior to the competencies of incumbents. For
accepted artifacts can also be beneficial. Tesla empha- new entrants to the automotive industry and many other
sized the discontinuous nature of its BEVs vis-à-vis con- sectors alike, design strategies that decrease the similarity
ventional cars. Studying how Thomas Edison designed between their own products and the conventional alter-
electric lighting to replace gas, Hargadon and Douglas natives should, therefore, be preferable to those that
(2001) suggest that innovators “must find the balance increase this similarity.
between novelty and familiarity, between impact and Second, our study advances the examination of politi-
acceptance” (p. 499). To achieve such balance, these cal strategies in organization and management research.
scholars recommend that innovators develop a “robust The political nature of institutional entrepreneurship has
design” for their novel artifact. A design is considered been highlighted since its inception and has been fre-
robust when it invokes familiar and valued institutions quently addressed by institutional entrepreneurship
and is “immediately effective […] yet preserve[s] the flexi- scholars ever since (DiMaggio, 1988; Pacheco
bility necessary for future evolution […] of understanding et al., 2010). Likewise, scholars acknowledged the politi-
and action” (Hargadon & Douglas, 2001, pp. 479–480). cal nature of valuation entrepreneurship (Sgourev, 2021;
The design that Tesla adopted was robust because it Zhao et al., 2013). Nevertheless, some types of political
quickly stimulated unparalleled appreciation of BEVs, strategy have rarely been considered in institutional
ET AL.
PALMIE 663
theory. Recent work extended institutional theory by sug- [of deflecting blame by blaming others] comes after the
gesting types of political strategy that have remained emergence of blame” (Sulitzeanu-Kenan & Hood, 2005,
under-researched. Specifically, Lawrence and Buchanan p. 9). Our study complements the dominant focus on
(2017) noted that existing institutional publications reactive blame avoidance with insights on anticipatory
focused on political strategies that rely on episodic blame avoidance—we observe what Tesla did to mini-
power—“discrete, strategic acts of mobilization initiated mize the risk of facing blame in the first place. Interest-
by self-interested actors" (p. 6)—while neglecting politi- ingly, anticipatory blame-avoidance strategies have not
cal strategies that rely on systemic power—“power that only been under-researched in management and organi-
works through routine, ongoing practices to advantage zation studies but also in the political sciences (Tu, 2022).
particular groups without those groups necessarily estab- Thus, our findings may not only contribute to valuation
lishing or maintaining those practices" (p. 11). Similarly, entrepreneurship research and institutional theory but
Acosta et al. (2021) noted that institutional scholars typi- also be of interest beyond these domains.
cally understand politics in the sense of “coercive poli- Third, our study contributes to the marketing and
tics" and pointed out that there is an alternative form of innovation management literature on developing
politics—“deliberative politics"—worthy of further inves- and commercializing sustainable products. Several publi-
tigation. Whereas coercive politics is about advancing cations in this literature—with some employing institu-
one's private interests and optimizing one's influence on tional theory—examined what makes firms more likely
collective decisions, often at the expense of other actors, to offer eco-friendly products (e.g., Bammens &
deliberative politics designates “a set of deliberative pro- Hünermund, 2020, 2023; Berrone et al., 2013). However,
cesses meant to promote dialogue between firms and to the detriment of businesses and society alike, many
stakeholders" (Acosta et al., 2021, p. 1112). Like Acosta consumers are reluctant to replace conventional products
et al. (2021) and Lawrence and Buchanan (2017), our with greener alternatives and many sustainable innova-
investigation brings a hitherto under-represented form of tions are sold in rather small quantities (Paparoidamis
political strategy to the fore. Our analysis emphasizes the et al., 2019; Vernay et al., 2020). To understand the rea-
“politics of blame avoidance” (Weaver, 1986). Protecting sons for this reluctance, several studies zoomed in on the
their reputation by avoiding blame is key for valuation consumer and asked what makes consumers more likely
entrepreneurs because a damaged reputation makes it to “buy green” (e.g., Chen et al., 2019; Heidenreich
harder to achieve favorable evaluations for unconven- et al., 2017; Qiao & Dowell, 2022). Moreover, these efforts
tional offerings (Cutolo & Ferriani, 2023; Sgourev & repeatedly alluded to institutional factors, alongside psy-
Althuizen, 2017). Avoiding blame is particularly crucial if chological characteristics and financial considerations.
the valuation entrepreneur seeks to promote an uncon- Under-represented in the marketing and innovation
ventional technology that is supposed to be environmen- management literature are investigations that asked what
tally beneficial but proceeds as Tesla did and initially companies can do to make sustainable products more
maximizes utilitarian, hedonic, and semiotic value at the attractive to consumers. Product design has been sug-
expense of environmental performance. This procedure gested as a promising lever, but “scant research has
could invoke allegations of greenwashing that can chal- focused on eco-innovative product designs"
lenge and damage the assessment of the technology and (Paparoidamis et al., 2019, p. 824). Initial work in this
its proponents (Patala et al., 2019). Therefore, valuation direction relied on online experiments to examine the
entrepreneurs—particularly but not exclusively those effect of design manipulations on consumer choice and
that promote eco-friendly technologies following Tesla's adoption intentions (Luchs et al., 2012; Luchs &
approach—need to consider strategies for avoiding blame Kumar, 2017; Paparoidamis et al., 2019). Responding to
(cf. Hansson, 2018; Hood, 2010). Whereas political scien- Paparoidamis et al.'s (2019) corresponding call, our study
tists recognized the value of blame avoidance almost complements these experimental and hypothetical efforts
40 years ago (Weaver, 1986), blame avoidance still tends with the analysis of an actual case. Notably, where our
to “live at the edges" of the organization and manage- findings and the experimental insights overlap, they are
ment disciplines (Hood, 2010, p. 15; Titus & consistent. Similar to Paparoidamis et al. (2019) who find
Mbaraonye, 2023). A notable exception is scapegoating, that consumers prefer radically rather than incrementally
which is a well-studied phenomenon in these fields innovative eco-attributes, we find that Tesla was success-
(e.g., Gangloff et al., 2016; Roulet & Pichler, 2020; ful by emphasizing discontinuous technologies. Similar
Titus & Mbaraonye, 2023) and a prominent example of a to Luchs et al. (2012) who report that consumers prefer
blame-avoidance strategy (e.g., Hood, 2007; sustainable products with a superior aesthetic design, we
Weaver, 1986). Specifically, scapegoating is usually a mat- find that Tesla's emphasis on aesthetics and other
ter of reactive blame avoidance, where the “political act hedonic and semiotic benefits was a key to the favorable
reception of its cars by the public. Our study goes beyond Such retaliation can damage the organization's reputation
the pure consideration of isolated product properties by more than diverting accountability can improve it. There
studying them in conjunction with strategies of reputa- are several reasons that can explain why Tesla did not expe-
tional politics. rience forceful retaliation. First, many of Tesla's opponents
committed themselves to greater sustainability only reluc-
tantly. If they had picked a fight with Tesla, they would
5.2 | Implications for management most likely have drawn greater attention to their own short-
practice comings. They had no interest in dragging their own omis-
sions into the spotlight of public debate. Second, Tesla did
Firms face growing political and societal pressure to not point the finger at individual actors or specific, well-
develop more sustainable products. However, although organized groups of actors and, thereby, reduced the risk of
many consumers claim to be willing to purchase eco- a coordinated response. The lack of a “unified voice” lim-
friendly instead of conventional products, sustainable ited the forcefulness of any response that Tesla's opponents
alternatives all too often fail to generate sufficient con- could have given. Third, Tesla avoided direct attacks that its
sumer interest and subsequent demand (Heidenreich opponents could directly respond to. Consequently, man-
et al., 2017; Paparoidamis et al., 2019). To reconcile their agers willing to divert accountability must be cautious not
firms' economic and environmental performance, man- to execute this strategy too aggressively.
agers need to create sustainable innovations that con-
sumers find appealing. Our study identifies one pathway
to achieve this: offer initial innovations that emphasize 5.3 | Limitations and paths for future
pleasure and comfort more than sustainability benefits. research
Since a normative motivation of behavior—such as acting
in a pro-environmental way—is easily replaced or domi- Our findings open up several intriguing opportunities for
nated by gain and hedonic motivations (Lindenberg & future research. First, our empirical design has focused by
Foss, 2011), compromising on environmental benefits in and large on the strategies adopted by one successful com-
favor of utilitarian, hedonic, and semiotic benefits can pany, without investigating the generalizability of the
make innovative products more desirable in the eyes of insights developed. Future research could replicate our
consumers. These highly desirable innovations can create study in other industries and regions. Consumer electron-
a “halo effect” (Sine et al., 2003) that promotes the appeal ics and the “smart building”/“smart city” sectors could be
of an entire product category, including the appeal of less promising candidates. Tesla's leaders developed the idea of
excessive and more sustainable versions of the product. entering the market with expensive high-performance
Once the product category has become appealing, firms products based on insights from consumer electronics
will probably find it easier to sell “greener” versions of where trend-setting products (e.g., cell phones, TVs) typi-
the product in greater numbers. Moreover, they might be cally do not start off as low-end products targeted at the
able to spend profits from selling the (typically expensive) average buyer (Higgins, 2021; Vance, 2015). It would,
halo products on the subsequent development of the therefore, be interesting to see if consumer electronics
“greener” models. In the meantime, firms can take mea- companies could leverage this high-end innovation strat-
sures to avoid blame for offering lavish products that egy to increase the appeal of more sustainable alternatives
could be quite eco-friendly but have a less-than-ideal as Tesla did in the automotive industry. The smart build-
environmental footprint because of their excessive ing and smart city sectors could be an attractive setting for
nature. Our study suggests that the success of this replication because buildings account for 27% of total
approach depends on the integration of three product energy sector emissions (IEA, 2023) and the utilization of
design strategies and three (reputational) political strate- buildings revolves around living or working. These two
gies. While Tesla's combination of strategies resulted in areas are associated with many deeply embedded norms,
well-received innovations, several competitors adopted values, and practices, which therefore lend themselves to
some but not all of the identified strategies and their investigations by institutional theorists. Moreover, follow-
innovations did not resonate well with consumers. ing prior institutional and socio-cultural analyses of cars,
Among the political strategies employed by Tesla is our study focused on North America and Europe
“diverting accountability” to other players. If not executed (e.g., Ashmore et al., 2018; Lucas et al., 2011). The North
carefully, this strategy “can backfire” (Antonetti & American and European markets represent a significant
Baghi, 2021, p. 59). For instance, the other players may try part of the global automotive sector. Together, these mar-
to retaliate by highlighting the shortcomings of the organi- kets are still bigger than their Chinese counterpart
zation that is trying to divert accountability toward them. (OICA, 2023). Moreover, they often anticipate
ET AL.
PALMIE 665
developments in cars and car culture that subsequently at the expense of environmental performance. It is debat-
spread to other parts of the world (Ashmore et al., 2018; able whether Tesla's early models really were more sus-
Schwanen, 2015). Nevertheless, future research could rep- tainable than conventional gasoline-powered automobiles.
licate our study in China to identify similarities and differ- Their lavish nature, however, made the Roadster and the
ences across various political and cultural contexts. Model S highly desirable for many customers. Their desir-
Whatever empirical setting it chooses, future research ability, in turn, increased consumer evaluations of BEVs
could explore if there are alternative (combinations of) as a whole, subsequently enabling Tesla and other car-
strategies that minimize blame for launching hedonically makers to sell smaller and considerably more eco-friendly
and semiotically appealing eco-innovations. If alternative BEVs in larger quantities than ever before. Even Tesla
strategy combinations exist, future research should deter- critics commonly admit that it has probably contributed
mine contingency factors that influence the viability and more to the growing acceptance of EVs than any other
relative appropriateness of the different combinations. company (Higgins, 2021; Niedermeyer, 2020). Stimulating
Second, when emerging markets mature, the number the appreciation of sustainable innovations by developing
of available products grows and stakeholders' experience environmentally questionable products may seem para-
levels rise, consumers typically become able to better dis- doxical at first. Hence, Tesla's success is an invitation to
cern commonalities and differences between various offer- reflect on its approach from a sustainability perspective.
ings (Cattani et al., 2017; Grodal et al., 2015). Increased This reflection may lead to a more nuanced picture of
competition in the new market category may cause manu- firms' stance toward sustainability. There are not only
facturers to alter the technical features of their products “idealists” who always seek to minimize the environmen-
(Hsu & Grodal, 2015) and to differentiate their products tal footprint of their products, “pretenders” who seek to
more clearly from similar artifacts (Anthony et al., 2016; maximize their financial profit through greenwashing, or
Cattani et al., 2018; Kahl & Grodal, 2016). Simultaneously, “bystanders” who simply do not care. Some companies
a better understanding of the strengths and weaknesses of may be “consequentialists” whose ecologically question-
the innovation may cause consumers to revise their assess- able products entail environmental benefits in the long
ment of the new market category as a whole or of individ- run. Idealists had attempted to attract mainstream cus-
ual products therein (Hsu & Grodal, 2021; Rosa tomers to BEVs for decades, but to no avail. It therefore
et al., 1999). As the BEV market continues to evolve, it will seems that our societies might at least occasionally need
therefore be intriguing to study how specific makes and consequentialists to effect successful green industry trans-
models will develop both in terms of their technical fea- formations. The challenge will be to distinguish true con-
tures and their common perception. sequentialists from pretenders who most likely will pursue
Third, our study highlights the relevance of blame some sort of blame avoidance strategy as well. Further
avoidance in the context of externally oriented reputa- work could try to distinguish between legitimate and ille-
tional politics. The innovation management literature, gitimate forms of blame avoidance. More generally, we
however, is increasingly interested in political behavior agree that blame avoidance has not yet received the atten-
within an organization (e.g., Palmié et al., 2023; Roeth tion that it deserves, especially outside the political science
et al., 2019). Therefore, we encourage future research to literature (e.g., Hood, 2010; Titus & Mbaraonye, 2023). Its
examine how the members of an organization try to significance probably extends far beyond the commerciali-
avoid blame internally, the upsides and downsides of zation of sustainable innovations and even innovation at
internal blame avoidance, and how it might be under- large. We hope that our study encourages much more
mined or promoted. research on blame avoidance in the organization and
Finally, we studied sustainable innovations in the sense management domains.
of eco-innovations. It would be interesting to see if our find-
ings hold for social innovations (e.g., Barczak, 2012; Lee ACKNOWLEDGMENTS
et al., 2019; Schweitzer et al., 2015) and what role blame We thank the editors and four anonymous reviewers for
avoidance plays in generating demand for “conventional” their thoughtful guidance. We further extend our grati-
innovations—innovations that do not place pronounced tude to Oliver Gassmann and Anja Schulze for their com-
emphasis on environmental or social benefits. ments on prior versions of our analysis and to Noemi
Iten, Paul Stephan, and Tihomir Tsenkulovski for valu-
able research assistance. Lucas Miehé worked on this
6 | C O N C L U D IN G T H O U G H T S publication as part of the SWEET consortium
PATHFNDR funded the Swiss Federal Office of Energy.
Tesla entered the car market with sports cars and luxury He gratefully acknowledges this financial support. Open
sedans whose driving performance and ride quality came access funding provided by University of St Gallen.
FUNDING INFORMATION Interested Promotion Skews Scientific Valuation.” American

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How Narrative Anchoring and Enrichment Help to Balance
Differentiation and Conformity of Entrepreneurial Products.” Maximilian Palmié is Professor of Technology and
Journal of Business Venturing 35(6): 106050. https://doi.org/10. Innovation Management and Senior Lecturer of
1016/j.jbusvent.2020.106050. Energy and Innovation Management at the University
Wang, Chengang, Yingqi Wei, and Wu. Lichao. 2023. “Global Eco- of St. Gallen (Switzerland). He received his PhD in
Innovation and Its Local Impact in Emerging Economies: Management from the University of St. Gallen. His
Boundary Conditions of Environmental Regulations and Pollu-
research focuses on the management of sustainability
tion Intensity.” Journal of Product Innovation Management 40:
761–793. https://doi.org/10.1111/jpim.12675.
innovation and digital sustainability, especially on
Watson, Rosina, Hugh N. Wilson, Palie Smart, and Emma K. questions related to scaling, stakeholder engagement,
Macdonald. 2018. “Harnessing Difference: A Capability-Based and business model innovation. His work has been
Framework for Stakeholder Engagement in Environmental published in Entrepreneurship Theory & Practice,
Innovation.” Journal of Product Innovation Management 35(2): International Journal of Management Reviews, Strate-
254–279. https://doi.org/10.1111/jpim.12394. gic Entrepreneurship Journal, and other outlets.
Weaver, R. Kent. 1986. “The Politics of Blame Avoidance.” Journal
of Public Policy 6(4): 371–398. https://doi.org/10.1017/ Lucas Miehé is a postdoctoral researcher at ETH
S0143814X00004219. Zurich (Switzerland). He received his PhD in Manage-
Welch, Catherine, Emmanuella Plakoyiannaki, Rebecca Piekkari, ment from the University of St. Gallen (Switzerland)
and Eriikka Paavilainen-Mäntymäki. 2013. “Legitimizing and was a Visiting Researcher at the Department of
Diverse Uses for Qualitative Research: A Rhetorical Analysis of
Strategy and Innovation, Copenhagen Business
Two Management Journals.” International Journal of Manage-
School (Denmark). Prior to academia, he worked for
ment Reviews 15(2): 245–264. https://doi.org/10.1111/ijmr.12001.
Werner, Mirjam D., and Joep P. Cornelissen. 2014. “Framing the insurance companies and was deployed for military
Change: Switching and Blending Frames and their Role in peace support operations in the Balkans (three tours).
Instigating Institutional Change.” Organization Studies 35(10): His research interests include the structure of ecosys-
1449–72. https://doi.org/10.1177/0170840614539314. tems. His work has been published in Long Range
White, Katherine, David J. Hardisty, and Rishad Habib. 2019. “The Planning, Technological Forecasting & Social Change,
Elusive Green Consumer.” Harvard Business Review 11(1): and Technovation.
124–133.
Yan, Shiyu. 2018. “The Economic and Environmental Impacts of Johanna Mair is a Professor of Organization, Strat-
Tax Incentives for Battery Electric Vehicles in Europe.” Energy egy and Leadership at the Hertie School in Berlin and
Policy 123: 53–63. https://doi.org/10.1016/j.enpol.2018.08.032. co-directs the Global Innovation for Impact Lab at
Yin, Robert K. 2018. Case Study Research and Applications. Thou- Stanford University's Center on Philanthropy and
sand Oaks, CA: Sage.
Civil Society. She received her PhD from INSEAD,
Zhang, Wanqing, Pradeep K. Chintagunta, and Manohar U.
Kalwani. 2021. “Social Media, Influencers, and Adoption of an
France. Her research addresses the nexus of societal
Eco-Friendly Product: Field Experiment Evidence From Rural challenges, institutions and organizations and has
been published in Academy of Management Annals, Review, Journal of Management Studies, Journal of
Academy of Management Journal, Journal of Business Business Venturing, Entrepreneurship Theory and
Venturing, Journal of Management, Journal of Man- Practice and others.
agement Studies, Organization Studies, Strategic
Entrepreneurship Journal, and other outlets.
Joakim Wincent is Professor in Entrepreneurship How to cite this article: Palmié, Maximilian,
and Management at Hanken School of Economics, Lucas Miehé, Johanna Mair, and Joakim Wincent.
Finland, and a Professor in Entrepreneurship and 2024. “Valuation Entrepreneurship through
Innovation at University of St. Gallen. His current Product-Design and Blame-Avoidance Strategies:
research interests include technology, artificial intelli- How Tesla Managed to Change the Public
gence, management, and innovation in organizations. Perception of Sustainable Innovations.” Journal of
Previous articles by him have been published in jour- Product Innovation Management 41(3): 644–676.
nals such as the Academy of Management Review, https://doi.org/10.1111/jpim.12732
Strategic Management Journal, Harvard Business
ET AL.
PALMIE 673
A P P EN D I X A
TABLE A1 Proof quotes.
Product design
Incorporating discontinuous technological solutions
Electric-drive-related technology “The really advanced work took place with the battery pack design. No one had ever tried to
combine hundreds of lithium ion batteries in parallel, so Tesla ended up at the cutting edge
of the technology.” (Vance, 2015, p. 158)
“There are new [electric] vehicles now on the market that – if you convert the Tesla
consumption of 20 kilowatt hours into 2.2 liters of gasoline in terms of energy content – […]
are energy-efficient vehicles […] that have a clear advantage over internal combustion
technology.” (Manager, Public Administration)
Nonelectric-drive-related “A Tesla is not [primarily] an environmentally friendly car. A Tesla is [first and foremost] a
technology technology vehicle, it's autonomous driving, it's something progressive, [… A Tesla car]
actually has all the sexiness in it already, and on top of that, it's electric.” (Manager, Energy
Supply Company C)
“[…] the driver encountered a seventeen-inch touch-screen that controlled the vast majority of
the car's functions, be it raising the volume on the stereo or opening the sunroof with a slide
of the finger. […] The Model S had an ever-present Internet connection, allowing the driver
to stream music through the touch console and to display massive Google maps for
navigation. The driver didn't need to turn a key or even push an ignition button to start the
car.” (Vance, 2015, p. 264)
Optimizing product in traditional criteria
Driving-related criteria “Musk wanted the Model S to be the best car out there, one that just happened to be electric.
[… He wanted] to show that there wasn't a trade-off in owning a car that was better for the
environment. In fact, he wanted to argue, it was a better overall experience than a gas-
powered vehicle” (Higgins, 2021, p. 100)
“The venerable Motor Trend magazine, after reviewing twenty-five makes of vehicles for its
annual Car of the Year award, shocked the automotive industry in November [2012] by
picking the Model S. […] In the review, they touted the performance, the handling, the
interior comfort and exterior looks […]” (Higgins, 2021, p. 163)
“So the industry took note when Consumer Reports announced that the Model S had scored 99
out of 100 points—a truly stunning result. Only one car had ever scored so high in the
magazine's history, the Lexus LS large sedan.” (Higgins, 2021, p.168)
“Getting rid of the engine and its din of clanging machinery also meant that the Model S ran
silently.” (Vance, 2015, p. 264)
Ownership-related criteria “[the car's internet connection] allowed engineers and programmers to make improvements to
the sedan after it was sold, without necessitating a burdensome trip to the shop. A part, for
example, might be wearing out, but it could be saved by programmers if they changed the
car's code to reduce the torque applied to it.” (Higgins, 2021, p. 173)
“Especially for the average consumer, who does a few kilometers a day, the electric car is
almost better in terms of convenience: because you can fill it up at home in the parking lot or
at the store, or somewhere at a public charging station.” (Director, Retailer A)
Creating ecosystem of complementary products
Offering critical downstream “But the most important thing of all was that Tesla installed charging stations at a very early
complements stage. And not just one, but 5 or 10 charging stations per site right from the start. That means
there were then 10 charging columns or maybe even 20 that weren't even in use at the
beginning. Nowadays, I often see that almost all of the charging stations in one place are
full.” (Consultant, Independent A)
“[Elon Musk] has not stopped. He has companies that make solar tiles [… and] he is
integrating photovoltaics with Tesla wall boxes. That's actually the right approach: to rethink
not just the car itself, but the car energy system.” (Director, Research Institute A)
“[Elon Musk] wanted to, he wrote, “create a smoothly integrated and beautiful solar-roof-with-
battery product that just works, empowering the individual as their own utility, and then
scale that throughout the world. One ordering experience, one installation, one service
contact, one phone app.” (Higgins, 2021, p. 249)
(Continues)
TABLE A1 (Continued)
Product design
Contributing to adjacent industries “In 2015, JB Straubel, Tesla's CTO, developed yet another new line of business for the
(e.g., energy sector) automaker, selling large battery packs for home and commercial spaces, which appealed to
solar customers eager to capture the energy they were creating by day to use at night.”
(Higgins, 2021, p. 245)
“At Tesla, we strive to be the best on every metric relevant to our mission to accelerate the
world's transition to sustainable energy. In order to maximize our impact, we plan to
continue increasing our production volumes and the accessibility of our products.” (Tesla,
2021)
Value proposition
Utilitarian value
Great product “[Winning Motor Trend's Car of the Year award indicated that the] Model S was not just the
best electric car; it was best car, period” (Vance, 2015, p. 268)
“Whereas [… “conventional”] cars have a large dashboard to accommodate various displays
and buttons and to protect people from the noise of the engine, the Model S offered up vast
amounts of space” (Vance, 2015, p. 264)
Convenience “For the Model S owner, the all-electric lifestyle translates into a less hassled existence. Instead
of going to the gas station, you just plug the car in at night, a rhythm familiar to anyone with
a smartphone.” (Vance, 2015, p. 313)
“[A specific Norwegian driver of a Model S] had no regrets, marveling at the ease of charging it
at home and enjoying the perks of never having to visit a gas station again” (Higgins, 2021, p.
202)
Cost savings “Ninety percent of charging will take place at home or at work. Maybe in a shopping mall and
that's it. […], so I charge at home for almost half the price [than charging in public].”
(Director, Energy Supply Company B)
“Cars end up being about 10–20 percent efficient at turning the input of gasoline into the
output of propulsion. The Model S ends up being about 60 percent efficient” (Vance, 2015, p.
265)
Hedonic value
Fun to drive “He [a friend] says: ‘You know? Electric! 320 HP! Just imagine!’ and that's fun, I understand
that. But that no longer has anything to do with the whole CO2 and environmental issue.”
(Manager [retired], Energy Supply Company A)
“Because it is fun to drive in the Tesla. I don't know if you've driven an electric car, it's just fun
and it's more fun than a gasoline car. […] But otherwise as a normal consumer it's just more
fun. I think that's what really gave it the kick.” (Director 1, Research Institute B)
Clear conscience “[…] electromobility has of course gained a lot of political momentum, because electromobility
is seen as sustainable in this CO2 climate issue, even though the European electricity mix
could of course come to a different conclusion in some cases. But it has succeeded in giving
the image that the electric car is a superior product of the future compared to the car that
has been powered by fossil fuel.” (Board Member, Association C)
“And then [Elon Musk] said, ‘The [electric vehicle] is also CO2 neutral.’ I don't agree with
that, but it doesn't matter: It works for the most [people].” (Manager [retired], Energy Supply
Company A)
Semiotic value
Status symbol “I know very young people who say: You know, Tesla! […] It's the brand, it's the name, it's the
hype. (…) Yeah. And then it's a status symbol. 100 percent. If you drive a Tesla, you have
money.” (Manager [retired], Energy Supply Company A)
“To make [alternative drive technologies] work, you probably have to do it the way Elon Musk
has done: With a big, swanky, luxurious vehicle that accelerates faster than a Porsche 911.”
(Director, Research Institute A)
Progressive image “Tesla wasn't just an electric car company, it implied: Musk was offering you the future.”
(Higgins, 2021, p. 266)
ET AL.
PALMIE 675
Value proposition
“[Tesla] sold them an image, a feeling they were tapping into the future, a relationship. Apple
did the same thing decades ago with the Mac and then again with the iPod and iPhone.”
(Vance, 2015, p. 312)
Reputational politics
Anticipating favorable developments
Anticipating cleaner electricity production/ “Tesla regularly releases updates on the amount of carbon its vehicles have saved,
smaller environmental footprint which it calculates based on the assumption that the electricity used to power its
cars is carbon free, but when pressed for details, Tesla admits that it is not”
(Niedermeyer, 2020, p. 119)
“It is also reasonable to assume that […] our future [… vehicles] will be designed for
maximum energy efficiency as handling, acceleration and top speed become less
relevant. This will minimize cost for our customers as well as reduce the carbon
footprint per mile driven.” (Tesla, 2021)
Anticipating non-energy-related “Musk was working just as steadily to change the perception of Autopilot. It had
technological developments attracted a lot of attention […], further burnishing Tesla's credentials as a car
company of the future. As [… Tesla] got closer to announcing its developments […, a
lead engineer] grew increasingly concerned over Musk's habit of overpromising […]
The last thing they needed was for Musk to go out and tell the world that the next
version of Autopilot was fully self-driving. [… Musk] declared that the system's
hardware was capable of fully self-driving, claiming that by the end of 2017 he
would demonstrate a car able to travel from Los Angeles to New York City driving
itself” (Higgins, 2021, pp. 250–251)
“[T]he goal of making its charging stations “zombie apocalypse-proof,” a battery-swap
system that would automatically recharge a Model S in less time than it took to
pump a tank of gas, an “Autopilot” system that would be able to drive itself in 90
percent of road conditions in just three years, […]. Each of these announcements
struggled to withstand close examination, ranging from mere exaggeration to quasi-
delusional fantasy.” (Niedermeyer, 2020, p. 88)
Encouraging customer advocates
Cultivating a “cult-like following” “These are almost like disciples following [their messiah]. Tesla fans are Tesla fans,
Apple fans are Apple fans. It's exactly the same!” (Manager, Association B)
“A “referral” program quickly became a favorite tool of the new crop of Tesla-touting
outlets and content creators that sprouted up after 2013. Using referral codes to
order a new Tesla provided benefits like a $ 1000 discount or free supercharging to
the buyer while also providing a kickback to the link provider. Originally intended
as a marketing tool that incentivized Tesla owners to educate potential buyers,
referral codes also provided a form of incentive for reporters and “content creators"
who effectively became Tesla salespeople (at least according to the California New
Car Dealers Association)” (Niedermeyer, 2020, p. 100)
““[Elon Musk] is a prairie preacher,” [prominent Tesla critic Lawrence] Fossi said.
“He's got the revival tent up and these people are in it.”” (Higgins, 2021, p. 209)
Exerting pressure via “evangelists” “Tesla investors and hard-core fans themselves pressured owners not to report defects
to NHTSA [the National Highway Traffic Safety Administration]. A parade of
commenters scorned concerned owners for even considering “tattling to Mother,”
arguing that Tesla would proactively fix any defects without the need for complaints
that might impact the company's image” (Niedermeyer, 2020, p. 155)
“Musk had about enough when [the President of the United States] tweeted from his
official account that the future would be made by companies like GM and Ford. The
notoriously thin-skinned CEO fumed that Biden was nothing but a “damp sock
puppet in human form,” […] That's when Johnna Crider, a blogger with
CleanTechnica […], launched an online petition to rectify the slight. […] Motoring
website Jalopnik covered the petition and, in a reference to the cultlike status of
Musk, subsequently joked, ‘Tesla followers want their God's accomplishments to
humanity acknowledged.’” (Hetzner, 2022)
(Continues)
Reputational politics
“We are calling on concerned consumers to contact the Governor [of Michigan] and
urge him to veto this legislation [prohibiting Tesla to sell its cars directly to end-
customers] and return the issue to the legislature for a full and open debate” (Tesla,
2014)
Diverting accountability
Pinpointing limits to own influence “If our goal is to accelerate the transition to sustainable transportation, we won't be
able to do it alone. […] If we can convince others to move to all electric, then our
impact will be far greater.” (Tesla's VP Jérôme Guillen, cited in Reinecke, 2014)
“Tesla exists to help reduce risk of catastrophic climate change” (Musk, 2018)
Calling for contributions from other players “So […] if [… other car manufacturers] realize that they need to accelerate their efforts
to move to all electric vehicles then it will be mission accomplished. We announced
in June that we will open all our patents to other manufacturers, effectively creating
an open-source environment with our technology. We see this as a further
opportunity to catalyze the transition away from the internal combustion engine.”
(Tesla's VP Jérôme Guillen, cited in Reinecke [2014])
“Support makes a difference [in combating climate change]. Thank you.” (Musk,
2018)
Favorable consumer evaluations
Favorable evaluations of Tesla
Spearheading revolution “[Musk's approach] endowed Tesla's vehicles with prestige that appealed more deeply
than environmentalism alone. Musk's huge ambitions fit perfectly with the
perception that cars were stagnating technologically, and his ever-escalating
promises tapped into the belief that the Model S was just the beginning of a
revolution. Tying all of this together was the fact that Tesla's cars were expensive,
appealingly styled luxury vehicles that could drive hundreds of miles and drag race
any car on the planet.” (Niedermeyer, 2020, p. 199)
“Having defined itself at the cutting edge of the mobility technology revolution, Tesla's
mission is to engineer electric vehicles that are rooted in the traditional car values of
private ownership, long-range capability, power, and status.” (Niedermeyer, 2020, p.
208)
Promoting desirable lifestyle “Elon Musk had built the automotive equivalent of the iPhone.” (Vance, 2015, p. 269)
“The insight that there was a market for cars that were both traditionally desirable and
environmentally friendly, at a time when “green cars" were defined by dowdy hair
shirts like the [Toyota] Prius and [Nissan] Leaf, was critical to Tesla's success.
(Niedermeyer, 2020, p. 248)
Favorable evaluations of BEVs in general
Pushing incumbents out of complacency “Half a century later, the [automotive] business had all but completely lost touch with
its ability to inspire enthusiasm for the future. The flamboyance and optimism of the
post-WWII auto industry had been crushed by brutal competition in things like
quality control, manufacturing, and capital efficiency. At the same time,
technological developments outside the auto industry—the computer, the internet,
the cellular phone, the smartphone, and the app store—were once again
transforming everyday life in previously unimaginable ways. There was a new sense
of futurist expectation just waiting to be tapped.” (Niedermeyer, 2020, p. 93)
“During his presentation Musk encouraged investors to look at Tesla differently.
“Think closer to an Apple, or Google, than a GM or Ford,” Musk said. […] Musk
allowed them to reimagine what the auto industry might look like” (Higgins, 2021,
pp. 123–124)
Creating halo effect “[E]lectric vehicles were essentially dead before Tesla joined the fray. Tesla has shown
the world that EVs are desirable compared to ICE vehicles" (Dyer &
Gregersen, 2016)
“[B]y making such desirable high-end electric vehicles, [Tesla] has created a market
where none existed […] and fulfilled its mission of accelerating the transition to
electric drivetrains" (Niedermeyer, 2020, p. 19)

J of Product Innov Manag - 2024 - Palmié - Valuation entrepreneurship through product‐design and blame‐avoidance strategies

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J of Product Innov Manag - 2024 - Palmié - Valuation entrepreneurship through product‐design and blame‐avoidance strategies

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Received: 29 April 2022 Revised: 30 January 2024 Accepted: 5 March 2024

Valuation entrepreneurship through product-design and

644 wileyonlinelibrary.com/journal/jpim J Prod Innov Manag. 2024;41:644–676.

vided in Table 2. 1 Director Car Dealer A

In addition to conducting interviews, we collected 1 C-Level Executive Car Dealer A

Elon Musk). 2 Director Retailer A

Thereafter, we coded our data using a three-stage cod- 1 Director Retailer B

FIGURE 2 Coding tree.

When it was released, the Model S fared so well in Effects

4.1.3 | Design strategy #3: Creating an Tesla customers as eco-avant-gardists (Niedermeyer,

Effects On various occasions, Elon Musk explicitly connected

FUNDING INFORMATION Interested Promotion Skews Scientific Valuation.” American

TABLE A1 Proof quotes.

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