The Religion Of Tesla: How Gigafactory Texas Fanfare Shows The Strong Brand Of EV Giant

Electric vehicle giant Tesla is set to host a ribbon cutting ceremony for its Gigafactory in Texas on April 7. The hype around the event shows the EV maker's cult-like following and how the company has created a religion, according to a venture capital firm.

What Happened: The ribbon cutting for Gigafactory Austin, the new production facility for Tesla Inc TSLA, is one of the most highly anticipated events of the coming week.

“This feels a little bit more like pageantry than substance,” Loup Ventures managing partner Gene Munster said.

Munster highlighted that the factory will help boost Tesla's annual production to more than two million vehicles in the future and help with a goal of 1.5 million vehicles produced in 2022.

Loup’s managing partner Doug Clinton said the event will be more noise than news. “No other car company would have this much fanfare around an opening and it does show the religion of Tesla,” Clinton said. “Religion is a really powerful benefit to a brand.”

Clinton and Munster discussed other companies that have created their own religions, with Apple Inc AAPL debated by the duo.

Clinton said Apple had a religion at one point, but it’s weaker now.

“I think they still do (have a religion),” Munster said.

Unlike Apple having a weaker or diluted religion, Clinton said Tesla’s religion remains strong.

“People want to see this opening, they’ve still got it,” Clinton said. “This is a testament to their brand and the religion that surrounds it.”

Related Link: Tesla Climbs On Potential Stock Split, Here's How The EV Stock Performed After Previous Split

Why It’s Important: Tesla has created a strong following of fans and vehicle owners, which have turned into the best form of advertising with strong word of mouth and return customer transactions.

“Don’t worry about spending a lot of money on advertising like traditional auto does, just create that religion and have these gatherings of the fateful,” Munster said.

The April 7 event likely won’t give Tesla fans or investors any new updates on new vehicles or items, instead the focus will be on the new factory, what it means in terms of production numbers and showing off some of the models that will be produced at Giga Texas.

Price Action: Tesla shares were up 1% to $1,084.59 on Friday. Shares are up 25% in the last month and heading closer to turning positive year-to-date, currently down 9.6% since Jan. 1, 2022.