Tesla’s Services and Products
Overview of the company
Tesla, Inc. is the world's leading electric vehicles and clean energy solutions company. The group primarily deals with electric cars, solar products, and energy storage systems. Its Gigafactories in the US, China, and Germany produce electric vehicles - with vertically integrated supply chains that facilitate streamlined production and cost efficiency. Tesla is, therefore, in collaboration with major suppliers of battery components, advanced materials, as well as self-driving technologies. Thus, it remains in charge of production and product quality (Tesla, 2024).
(Source: https://www.tesla.com/about)
Problem Tesla's Products Solve
The dependence of the world on fossil fuels and the environmental hazards arising from gas-guzzling traditional gasoline-based vehicles have positioned Tesla on the battlefront. Its electric vehicles eliminate internal combustion engines, thereby curtailing greenhouse gas emissions and spurring change to sustainable energy solutions (Tesla, 2024). Tesla's solar panels and Powerwall systems empower the consumer further by creating clean, renewable energy solutions for homes and businesses. These benefits include zero emissions, the latest in autonomous driving capabilities and a capacity of over 300 miles on a single charge, which helps the customer reduce carbon footprint.
(Source: https://www.tesla.com/ns_videos/2023-tesla-impact-report-highlights.pdf)
Exclusive Features and Competitive Advantage
The firm has a number of patents in battery technology and electric motors, and its Autopilot software represents proprietary self-driving technology that no competitor could offer. Such a high-tier autonomous driving experience only Tesla has put it on a different level from the competition, where a competitive advantage is built in (Tesla, 2024). Contracts with suppliers to secure advanced battery materials are also only available to the firm.
(Source: https://www.tesla.com/blog)
Pricing Structure and Strategies
Tesla has presumably established its pricing structure into the market as a mid-to-high-end product, with one example being the Model 3 in a more affordable format while maintaining premium pricing for the Model S and Model X. Tesla has operated the direct sales model to bypass dealership sales while maintaining healthy margins provided by sales through Tesla (Ding and He, 2022. p.1010-1014). This status is particularly attractive to environmentally friendly consumers willing to pay for long-term savings with the purchase price based on innovative technology.
(Source: https://www.atlantis-press.com/article/125973902.pdf)
Tesla Marketing Plan
Market Research
The electric vehicle (EV) industry of the globe has experienced speedy growth. According to the year 2024, the global EV market was esteemed at roughly US$786.2bn and is anticipated to continue rising at a compound annual growth rate (CAGR) of over 6.63% until 2029 (Statista, 2024). The rise in the industry is attributed to factors such as the shift toward improvements in battery technology, sustainable transportation, and government incentives.
(Source: https://www.statista.com/outlook/mmo/electric-vehicles/worldwide)
Tesla remains to sustain a large market share in the electric vehicle market. Total EV markets in the U.S., Europe, and China alone account for a significant portion of the current market share inappropriately held by Tesla. In 2023, Tesla was reported to constitute approximately 16% of the global EV market. The target market for Tesla continues to expand, as customer preference is directed toward eco-friendly vehicles. The demand for electric vehicles is experiencing rapid growth for EVs that deliver long-range features, state-of-the-art autonomous features, and innovative designs (Counterpoint, 2024).
Additionally, Tesla has excellent growth potential. As the global EV market continues to grow, and brand popularity for Tesla increases, it is reasonable to expect Tesla to expand market share to around 20% over the next 5-year period, primarily as an expansion into developing markets such as India and the Asia Pacific countries in Southeast Asia.
(Source: https://www.counterpointresearch.com/insights/global-electric-vehicle-market-share/)
Barriers to Entry
Multiple significant barriers to entry have been presented for new entrants in the EV market. They entail the high startup and manufacturing costs tied to the need for advanced technologies, specialized manufacturing facilities, and access to the battery supply chains. Marketing cost also contributes, as firms have to get brand credentials and compete with the reputation of Tesla as a pioneering company (Bhardwaj et al., 2020. p.78-88). Additionally, there are further barriers to entry created through Tesla's proprietary technologies, patents, and high customer loyalty.
(Source: https://www.ejournal.aibpmjournals.com/index.php/IJTHAP/article/viewFile/825/787)
Threats and Opportunities
Opportunities
There is also good scope here for Tesla to
gain from newer technologies in batteries and autonomous driving.
Moreover, as the world economies recover from the COVID-19 shock,
demand for sustainable transport modes should rise, which creates a
space for Tesla to enter new markets (Bhardwaj
et al., 2020. p.78-88).
(Source: https://www.ejournal.aibpmjournals.com/index.php/IJTHAP/article/viewFile/825/787)
Threats
Demand is affected by periodic governmental
policies concerning the subsidies on EVs and environmental policies.
Also, if the economy fails to absorb such shocks, consumer purchasing
power declines due to economic downturns or inflation leading to
reduced sales figures (Kumari and Bhat, 2021. p.205-218).
(Source: https://www.supublication.com/index.php/ijaeml/article/download/402/297)
Reference
Bhardwaj S., Pandey R., Sharma S., Sejal S., Iyer G., Sharma S., Ranjith P.V. and Kulkarni S (2020) Problems faced by automobile industries: Case study on Tesla. International journal of Tourism and hospitality in Asia Pasific (IJTHAP), 3(2), pp.78-88. Online available at: https://www.ejournal.aibpmjournals.com/index.php/IJTHAP/article/viewFile/825/787. Last accessed on 20th September 2024.
Counterpoint, (2024) Global Passenger Electric Vehicle Market Share: Q3 2022 – Q2 2024. Counterpoint [Online]. Available at: https://www.counterpointresearch.com/insights/global-electric-vehicle-market-share/ [Accessed: 20/09/2024].
Ding J. and He Y (2022) April. Tesla Pricing Strategy Analysis: Take Model 3 as an Example. In 2022 7th International Conference on Social Sciences and Economic Development (ICSSED 2022) (pp. 1010-1014). Atlantis Press. Online available at: https://www.atlantis-press.com/article/125973902.pdf. Last accessed on 20th September 2024.
Kumari D. and Bhat S (2021) Application of artificial intelligence technology in tesla-a case study. International Journal of Applied Engineering and Management Letters (IJAEML), 5(2), pp.205-218. Online available at: https://www.supublication.com/index.php/ijaeml/article/download/402/297. Last accessed on 20th September 2024.
Statista, (2024) Electric Vehicles – Worldwide. Statista [Online]. Available at: https://www.statista.com/outlook/mmo/electric-vehicles/worldwide [Accessed: 20/09/2024].
Tesla, (2024) About us. Tesla [Online]. Available at: https://www.tesla.com/about [Accessed: 20/09/2024].
Tesla, (2024) Blog. Tesla [Online]. Available at: https://www.tesla.com/blog [Accessed: 20/09/2024].
Tesla, (2024) Impact Report 2023. Tesla [Online]. Available at: https://www.tesla.com/ns_videos/2023-tesla-impact-report-highlights.pdf [Accessed: 20/09/2024].
