The Bottom Line Sustainability Story Behind Last Week’s Tesla Model 3 Alcantara Story
A wee bit of Tesla controversy stirred up recently, when some Model 3 customers noticed a rather underwhelming aspect of their Model 3 interiors: they got a conventional woven fabric when they expected the futuristic material Alcantara. As for why Tesla customers prefer Alcantara, that’s a whole other topic, but you may find a clue in the sustainability profile of its Italian manufacturer, also named Alcantara. The company made a big bet on cleantech and decarbonization back in 2009 and business has been booming ever since.
CleanTechnica had a chance to sit down with company CEO and chairman Andrea Boragno for a first-hand view of the dynamics behind the decarbonization decision a few days ago, during the 4th Annual Symposium on Sustainability in Venice, Italy. Alcantara partnered with Venice International University on the symposium and sponsored CleanTechnica’s attendance, so thanks!
Decarbonization, Deep & Fast
In a preview of the symposium, we touched briefly on Alcantara’s decarbonization strategy, which incorporates cutting emissions as well as offsetting emissions with renewable energy credits (for the record, Alcantara is invested in social and supply chain responsibility as well as environmental action).
Once the commitment was made, the decarbonization effort happened fairly quickly. The company overhauled its processes in 2009 and achieved carbon neutral certification in 2011. Alcantara also cut its water footprint, and the addition of new bioremediation and cogeneration facilities (in 2011 and 2013, respectively) ramped up the sustainability effort.
That covers process. Product sustainability is another challenge, considering the source of the company’s synthetic material. The transition to non-fossil sources is already underway and the company anticipates fully renewable sources as early as 2020. That includes rice straw, sugar cane bagasse, and other agricultural wastes along with paper waste.
That transition could open up new avenues of sale, as major manufacturers are on the hunt for sustainable materials and parts. That includes major sectors such as automobile manufacturing (Ford seems to be leading that trend in the auto sector) as well as furnishings, fashion, and electronics.
Toy manufacturing is another area ripe for transition. One good example is the iconic toy maker LEGO. The company has made great strides on cutting carbon emissions in its operations and supply chain, but it is still working on the transition from a fossil-based product to something more sustainable. Just last week LEGO announced its first bio-based release, which naturally enough is a suite of tiny trees, plants, and shrubs made from sugarcane bagasse.
Sustainability Raises The Bar On Quality
In a lunchtime roundtable discussion with CleanTechnica and other media, Mr. Boragno was quite direct. He asserted that “we have to get rid of oil” in terms of climate change, but he also noted that if sustainability did not make bottom-line sense, companies like Alcantara would not be going down the decarbonization path.
Decarbonization can help cut costs operationally, but Boragno emphasized that it also provides leverage for long-term profitability:
“There is a growing trend toward sustainable products and sustainable behavior, because they add value to your company and your brand.”
Companies recognize that customers value sustainability. In other words, consumer attitudes are making a difference.
CleanTechnica asked what sparked the interest in decarbonization in 2009. The interplay between consumer expectations and bottom-line considerations was already in evidence back then (following comments edited for flow):
“In 2009 there was a big economic crisis, and at that time it was absolutely clear that this was not just a cycle. The year 2009 clearly marked a structural change in demand, and a change in competition.
“This kind of structural change convinced the company that it was not enough to just cut costs. There was a drop in demand, and it will never be the same. Even if demand comes back, it will come back differently.”
More specifically, the focus on sustainability supports Alcantara’s luxury based business model:
“Sustainability is a value that increases a company’s reputation. We invested in sustainability ten years ago and since then our sales have tripled.
“The upper part of the market not only wants quality, it wants design, it wants a sense of style, and it wants a sense of responsibility.”
The idea of responsibility as an element of value goes back to the quality-focused beginnings of the Alcantara material. The chemistry originated with the Japan-based Toray company in the 1970s but Alcantara is identified by its headquarters and production facility, based exclusively in Italy:
“To be made in Italy was a strategy. From the beginning, we went beyond simple cost. We had clear evidence that ‘made in Italy’ is a value.
“Today, top quality is not enough. Top quality is boring. The other element you need is emotion. You need style, beauty, and customization.”
Aside from its attractiveness to consumers, the emphasis on sustainability has also made Alcantara attractive to business partners interested in ramping up both their luxury and their green profiles.
This can head into some fraught territory when it involves partners that are not up to Alcantara’s speed on sustainability. On the flip side, though, the relationship can also motivate partners to step up their game.
Boragno cites its partner Microsoft among those getting the point in terms of the evolution in consumer demand:
“Microsoft understood that technology is not the issue. It’s not only about software, it includes design and customization.”
With that in mind, it’s probably no accident that Microsoft scored the #3 mark on CR Magazine’s 100 best corporate citizens list for 2017.
And, What About Tesla?
Closing out the conversation was a brief commentary on consumer preferences regarding natural leather. Boragno characterizes leather as the more “traditional” approach to quality. In contrast, he describes Alcantara as a material that appeals to the “clear trend of the future.”
As a soon-to-be-fully-plant-based material, Alcantara also dovetails with a more general movement encouraging consumers to reduce their dependence on animal products in food supply, as a matter of nutritional health as well as environmental sustainability. A greater sensitivity to animal cruelty issues can also come into play.
Considering that electric vehicles are also the clear trend of the future, and that the Tesla brand is associated with high quality, the result is a connection between Tesla customer expectations, a sudden rise in demand for Alcantara, and a shortfall in supply.
As Boragno described it, Alcantara is fully booked with orders at its existing production facility, and until capacity is expanded — in Italy, of course — that’s the way it will be.
Stay tuned for a similar outlook on sustainability and the bottom line from the diversified energy company Enel, another CleanTechnica favorite which also presented at the Venice symposium, and an interesting contrast with BP.
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Photo (cropped) via Tesla
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