“Your brand is the promises you keep.”
— Michael K. Levine
With the current shape of U.S. geopolitics, perhaps it’s a challenging time to discuss Tesla. Still, the success of the company stands apart from its industry. Despite a decline in its share price of 51% since its recent peak in late 2024, Tesla is the 11th most valuable company in the world.1 The next most valuable automaker, Toyota, is a third of its market cap. The result is a company with approximately US$100 billion in revenues that has played a key role in ushering in the modern era of automobiles. Tesla’s rise offers lessons for any industry; alternative proteins are no different.
Since the time Beyond Meat went public in 2019, the alternative protein sector has seen its fortunes fall. Funding collapsed from $5 billion in 2021 to just over $1 billion in 2024, seeing a sizeable decline every year over this period. Beyond Meat and Oatly have seen their respective market caps collapse to below 1x sales.2 Several U.S. states have banned cultivated meat, and consumers remain skeptical of the nutritional value of plant-based meats, thanks in part to successful campaigns from the meat industry.
The alternative protein industry deserves credit for innovations over the past 15 years, but perhaps lessons from a different industry may offer a path forward that accelerates sector progress and consumer adoption. The Tesla story offers a glimpse into how continuous innovation can disrupt a decades-old industry.
Tesla Rising
Tesla innovates at a dizzying pace. Since it was founded in 2003, the company has undergone a meteoric rise with milestones that are the envy of the industry:
Products: Its first sedan, the Model S, earned numerous accolades, including Motor Trend Car of the Year (the first EV to do so), Automobile Magazine’s Car of the Year, and Consumer Reports’ Highest-Rated Car Ever. Its Model 3 was the top 10 bestselling cars globally, while the Model Y was the bestselling car globally in both 2023 and 2024.3
Software: Tesla’s Autopilot and Full Self Driving (FSD) system utilizes artificial intelligence and neural networks, making continuous improvements using real-world data. Its cars run on a custom Linux-based system optimized for real-time performance, scalability, and integration with its systems.
Data: Tesla’s proprietary software platform has effectively built computers with wheels that generate vast amounts of data. Coupled with its over-the-air updates, this information flows into the company’s servers, where it is crucial in training its autonomous software algorithms.
Factories: Its ‘gigafactory’ manufacturing facilities are now on three continents, collectively spanning over 40 million square feet in size, with several more planned. Today, Tesla has gigafactories in Nevada, Texas, New York, Berlin, and Shanghai, with a new one in Mexico upcoming.4
Superchargers: Tesla operates the largest proprietary supercharging network of 7,000 stations globally, with over 65,000 individual charging connectors.5
Batteries: The company has continued to innovate with battery technology, creating the 4680 battery cell design to drive increased energy density, improved range, and lower costs.
Solar: Following its acquisition of SolarCity, the company provides solar energy generation and storage products for both residential and commercial applications, with products such as Powerwall, Solar Roof, Powerpack, and Megapack.
IP: Tesla holds patents in battery technology, electric drivetrains, autonomous driving, and vehicle design.
That all of this was accomplished by a company founded just over 20 years ago is astonishing and offers valuable learnings. Four lessons stand out:
Lesson #1: Break The Cost Barrier
Producing food is not easy. Undergoing the sourcing, production, packaging, and distribution process is hard enough. For alternative proteins to then compete with animal products on price, which routinely benefit from government subsidies, feels like adding insult to injury. Tesla began by targeting the luxury market. The company recognized that certain customers were less cost-conscious. Given an alternative that represented an upgrade from the status quo, they would be willing to pay a premium price. Tesla knew it would eventually need to compete on price. But it also knew that starting there would be suicide. From its initial Roadster priced at $109,000 in 2006, it began selling the Model S with a starting price of $57,900 in 2012, followed by its first mass market car, the Model 3, for $35,000 in 2017. To get there, Tesla lowered the cost of battery packs from over $200/kWh to around $100/kWh, reduced production time per vehicle by over 30%, and leveraged carbon credits to offset production costs. It took over a decade for Tesla to get its prices to compete at scale with the automotive industry. What would have happened if Tesla had tried to build a Model 3 from day one?
Lesson #2: Design A Better Product
For each new Tesla product, the value proposition to consumers was compelling. The Roadster, built on the Chassis of Lotus cars, zoomed from 0-60 mph in just 3.9 seconds with a range of 244 miles, more than 2x that of other EVs. It was a commercial success despite producing less than 2,500 units. The Model S, its next major automotive breakthrough, built upon this success. It accelerated from 0-60 mph in 4.2 seconds, with the Performance model bringing that down to 2.8 seconds. It had a low center of gravity for superior handling and safety, a futuristic, minimalist interior design with a 17-inch touchscreen to control most vehicle functions, over-the-air software updates, and a ‘frunk’ (front trunk) for additional storage. It could charge to its full range of 265 miles in 40 minutes. It also garnered a 5-star rating from the U.S. National Highway Traffic Safety Administration (NHTSA) with exceptional performance in crash tests. The car rendered oil changes obsolete, offered ongoing vehicle improvements via automatic software updates, while eliminating the need to go to a gas station ever again. The contoured design and luxurious feel didn’t hurt either. The Model 3 represented yet another upgrade. It offered a range of up to 344 miles, going from 0-60 mph in as little as 3.1 seconds. It was equipped with Autopilot as a standard feature, which offered traffic-aware cruise control, lane centering, and automatic lane changes. It echoed the minimalist interior of previous models with a 15-inch touchscreen, while maintaining the 5-star safety rating from the NHTSA. Would Tesla have succeeded if it simply released the electric car equivalent of a Toyota Corolla or Honda Accord?
Lesson #3: Build Out The Infrastructure
Tesla’s supply chain innovations are perhaps its most underrated. Tesla has been rapidly building out its infrastructure to support the growth of its electric vehicle ecosystem. This includes expanding its Supercharger network globally, scaling Gigafactories to increase production of vehicles and batteries, and investing in energy storage and solar solutions. These efforts were aimed at creating a vertically integrated, sustainable energy ecosystem that supports mass EV adoption.
Rather than outsourcing heavily, which was a standard in the industry, Tesla manufactured critical components in-house, including battery packs, battery cells, electric motors, drivetrains, as well as proprietary software and AI systems. Its gigafactories streamlined production of both batteries and cars, operating on a mass production scale. It adopted a direct-to-consumer model, disrupting the traditional dealership model, which allowed Tesla to control the customer experience while capturing higher margins.
As batteries represented a crucial component for the company, Tesla forged partnerships with CATL, Panasonic, and LG Chem to scale production while developing its own battery technology. It innovated on battery production with its 4680 battery cells, offering higher energy density, improved thermal management, and reduced production costs. The company went further by securing long-term contracts for critical raw materials like lithium, cobalt, and nickel to ensure supply chain stability. It localized production to reduce costs, avoid tariffs, and minimize logistical complexities.
Tesla’s supply chain is data-driven and software-centric, giving the company real-time visibility into production and inventory levels. This helps the company manage inventory, optimize logistics, predict demand fluctuations, and make rapid adjustments to supply chain disruptions. Its over-the-air updates allow the company to improve vehicle functionality post-production, reducing the need for recalls. During the semiconductor chip shortage, Tesla rewrote software to support alternative chips. Tesla also implemented closed-loop battery recycling through its partnership with Redwood Materials to reduce dependency on raw materials. How would Tesla have fared had it simply outsourced the production of most of its components?
Lesson #4: Foster Brand Identity
A brand isn’t just logos, slogans, and marketing; it’s about delivering on commitments and meeting (or exceeding) customer expectations consistently. Perhaps the most well-recognized customer loyalty metric, the Net Promoter Score (NPS), measures how many customers are likely to refer a company or product to their friends and family. It should not surprise anyone that Apple and Netflix earn among the highest scores. It may, however, surprise some to hear that Tesla routinely earns an NPS score that rivals or exceeds these brands, and is well above the rest of the automotive industry. Visit Tesla’s website and you won’t see messages about how sustainable the company’s cars are, or how closely they mimic their conventional counterparts. Instead, you’ll see images of sleek cars and cutting-edge technology that offer a glimpse of the future with an invitation to engage. Would Tesla’s brand have held the power it does today if the company simply touted that its cars were electric and sustainable?
Speed Bumps
To be sure, Tesla has made missteps. For years, Tesla struggled with production bottlenecks as the company attempted to create ‘extreme automation’ in the Model 3 factory. Despite its technological progress, the company has overpromised and underdelivered on both its vehicle sales numbers and its Autopilot/FSD automation technologies. It remains unclear if its entry into the truck market with its CyberTruck may have caused the company to miss an opportunity, given its production delays and limited adoption. The company has suffered from quality issues, including misaligned panels, problematic paint jobs, and software glitches. Its founder has received negative publicity earlier in the company’s life when he desired to take the company private, and more recently with his involvement in the U.S. government with the Department of Government Efficiency (DOGE).
Clean Protein
Despite these missteps, Tesla has continued to innovate and has become one of the most influential companies in the world, offering valuable insights for other sectors. The alternative protein sector has made substantial progress, but has also suffered from a number of missteps. The hype around plant-based foods, and later cultivated meat, was simply too high to live up to, causing consumer disappointment and stalling growth. Companies built facilities before it was evident that they could manufacture products profitably. They scaled without determining if the market wanted the products they were selling. Scale-up before market adoption is a recipe for pain. To make matters worse, building products without a sustainable supply chain created hurdles in price, quality, and scale.
Product: Product formats have largely focused on mimicking meat, rather than simply creating something delicious in their own right. Mimicking, by definition, positions the product as second best. Further, the gymnastics required to make plants taste like meat not only leave consumers wanting but also drive up the price. Rather than creating a ‘duplicate’ or ‘approximate’ of a meat product, positioning the product as an ‘alternative’ has worked better. Oatly is a prime example: no one is doing a taste test to compare it to dairy milk to see if they taste the same. Oatly has repeatedly focused on a key message – we taste better with coffee. This makes Oatly a primary choice rather than a ‘flexitarian’ option. There has been relatively little innovation to create similar alternatives for meat, nor has the industry ventured out to try new product formats. Apple, Meta, and Coca-Cola would not be leaders in their respective industries today if their users were ‘flexitarians’ with their products, so to speak.
Pricing: A premature push for affordability would have stunted Tesla’s growth potential. It is clearly harder for alternative proteins to take a similar approach, since the demand for alternative food is price elastic. Still, instead of trying to undercut conventional meat immediately, the industry could benefit from a similar strategy to Tesla’s phased approach. Premium-positioned plant-based or cultivated meats with superior taste and quality could appeal to early adopters willing to pay more, a strategy implemented successfully by plant-based milk. The key is to build consumer loyalty before competing purely on price.
Positioning: Polarizing leadership and/or messaging has also distracted from the core offering – the product itself. Alternative proteins have largely framed their messaging around ethics and environmental benefits. While these factors resonate with some consumers, mainstream consumers are driven by taste, price, and convenience. The main reason behind Tesla’s success is simple: it was a far superior product. Sustainability was secondary. Many alternative protein products, however, are marketed primarily as ethical or sustainable choices rather than as superior culinary experiences. The focus must shift toward developing products that surpass conventional meat in taste, texture, and format. If alternative proteins can provide an undeniably better culinary experience, consumers will switch regardless of their views on sustainability or ethics. Rather than branding based on values, it may be more effective to focus on product attributes.
Support: The industry will clearly need more capital to realise its potential. Tesla benefited hugely from government subsidies for electric vehicle purchases, which were offered both at the federal and state levels. In 2010, during a precarious time for the company, it received a $465 million low-interest loan from the U.S. Department of Energy. For years, Tesla benefited from regulatory credits, which were often a crucial factor in reaching profitability. The company also availed international government support in the United Kingdom (£200 million) and China ($426 million). State and local governments also provided subsidies to Tesla for manufacturing and operations. The alternative protein sector has received modest support at best, which needs to change in the coming years.
The Road Ahead
The takeaway is that Tesla didn’t just build an electric car; Tesla built an incredible car that just happened to be electric. To get here, Tesla had to buck ‘best practices’ that were followed religiously for decades. Using the same techniques as everyone else to create something innovative is akin to repeating the same action expecting a different result.
Despite the headwinds the alternative protein sector has faced, there is much to be proud of. Today, 65-70% of U.S. consumers are aware of Beyond Meat and Impossible Foods,6 while 50% have tried a plant-based meat product. Plant-based milk commands a promising 16% share in the United States, and 12% globally.7 Innovation continues unabated, with new startups standing on the shoulders of early innovators who pioneered the category with new approaches that reduce capital expenditure and enable more efficient scale-up. The opportunity to improve the food system is compelling. But to get there, we may require a different approach than anything we have seen to date.
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Good Food Institute, 2025