2. ● Introduction to Tesla
● Problems/Issues
● Industry Analysis
o Market
o Competitors
● Firm Analysis
o Competitive Advantages/Disadvantages
o Sustainability
● Conclusion
● Recommendations
Roadmap
3. Mission
Use proprietary technology, world-class
design and state-of-the-art manufacturing
processes to create a new generation of
highway capable electric vehicles (EVs).
4. Vision
Alter the world’s perception of EVs and
make EVs a viable alternative to gas
powered vehicles by producing an
automobile that is beautiful, exciting to drive
and the most efficient on the planet.
5. Plan
Enter at the high-end of the market and then
lower prices as cost efficiency and
technology improve (3 phases).
10. “By the same token, it means the market is enormous. Our true
competition is not the small trickle of non-Tesla electric cars being
produced, but rather the enormous flood of gasoline cars pouring out of
the world’s factories every day.”
Industry/Competitive Analysis
11. Industry Growth and PEV Trends
● A stronger economy and slumping gas prices has seen a rebound in auto sales
● Electric and Hybrid vehicles have also seen growth in sales in recent years
o A long term steady increase in gas prices, stricter fuel economy standards, and consumer
sentiment toward environmental issues has sparked hybrid and electric vehicle interest
US Total Market Sales and Growth US Monthly PEV Sales
12. Market Share
US Auto Industry Markets Share ● Many players in the auto industry
● Ford, GM, Chrysler, and Toyota control
over 60% of the market
● 97% of the vehicles in the industry utilize
traditional combustion engines
● Nearly 3% utilize hybrid technology
● .34% of autos are plug in EV
● Tesla commands .01% of the entire auto
industry
● Growth in hybrid and EV market will
depend largely on future oil prices,
consumer sentiment, costs and R&D
o Recent reductions in oil and gas
prices puts less strain on
manufacturers and consumers
13. Five Forces Analysis
Rivalry (-)
● Numerous established competitors
○ brand loyalty
○ access to capital/economies of
scale
○ diverse product lines
Substitutes (+)
● Substitutes for automobile’s exist
○ public transportation, airplanes
● Public transportation is cheaper, air travel
potentially cheaper over longer distances
and frequencies
● But, neither as convenient
Entry (+)
● High barriers to entry
○ regulated industry
○ capital intensive
● Shallow experience curve
○ learning is hard
Customers (+)
● Significant bargaining power in traditional
industry supply chain
○ dealers and consumers can
negotiate prices
● Tesla’s direct to consumer online sales
model eliminates bargaining power.
Suppliers (+)
● Bargaining power is low
● Tesla gets ion cells from multiple
manufacturers
● Other vital components like engine,
chassis, transmission all manufactured in
house
14. The Competitive Landscape
● With the Roadster, Tesla entered the market as the only all electric high performance vehicle
● Tesla’s strategy is to enter into cheaper and more broad markets
15. Tesla’s Generic Strategy Moving Forward
Appeal to the broad market
Broad Narrow
Cost
Leadership
Differentiation
17. SWOT
Strengths Weaknesses Opportunities Threats
● Products - most
energy efficient cars
● Innovation, Tech,
Design
● Image
● Strategic
Partnerships
● Leadership and
Management
● Gigafactory
● Lack economies of
scale
● Low sales
● Dependent on
innovation
● Financial profile
● Capital of
Competitors
● Production delays
● Terms of
competition not set
yet
● Adaptable battery
uses
● Growing EV market
● Consumer sentiment
- climate awareness
● International Market
● Laws preventing
sales
● Proximity fear factor
● Small EV market
● Loss of Govt
subsidies
● Competitors
entering EV market
● Open Sourcing
19. Current Differentiation
Technical Superiority
● Advanced lithium-ion battery technology with longest range EV
● Lowest cost for battery ($/kWh)
● Better R&D → over 240 patents and patents pending
● Best Powertrain → Dual engines/motors
● Exclusive EV market focus places Tesla ahead on experience curve
● Smoother & quieter ride
● Max torque immediately
● Battery swap in 90 seconds
22. Competitive Disadvantages
➢ Cost of ownership still favors traditional gas vehicles
○ Gas prices have continued to drop throughout 2014
➢ Small demand and production restricts economies of scales
○ 2013 US Total EV Sales: 46,148 → 38.2% of US EV market
○ 2013 US Total Car & Trucks: 15.6M → 0.3% EV vs. total US market
➢ Significant competition if EV gains enough market share to go mainstream
Source: http://www.fuelgaugereport.com/
23. Competitive Disadvantages
➢ “Range Anxiety” → Fear of being
stranded with a dead battery
➢ Battery performs poorly in cold weather
➢ Competition working to create the
charging standard
➢ Trying to create the market for EV where
robust demand is nonexistent
➢ Long lead-time ~8-10+ weeks
“Battery-powered vehicles will probably
account for just 1 percent of the global car
market by 2020, compared to 0.3 percent
predicted for this year (2014)” - IHS Automotive
24. Competitive Disadvantages
Inability to sell in many states
● Ban Direct Sales: 26
● Allow Tesla to Sell Cars: 22
● Fighting to Overturn Ban: 2
Limited Service Centers
Limited SuperChargers
● 129 in North America
25. Competitive Disadvantages
● Hydrogen Fuel Cell Technology
● Competitor Partnerships
- Toyota & BMW
- Honda & General Motors
- Ford, Daimler and Nissan
● Toyota Mirai
○ 300 mile range
○ $57,500
○ 2015: 700 vehicles
“Hydrogen fuel cell vehicles function like
electric cars, using onboard hydrogen to
create electricity with only water as a
byproduct.” - IHS Automotive
- The Wall Street Journal - November 17, 2014
26. No SCA
→ All “Competitive Advantages” are
Long-Term Operational Effectiveness
Conclusion
27. Potential Industry Outcomes
What Tesla Believes:
● A fundamental shift to EV will
occur in auto industry
● Superior technical expertise and
relentless innovation will continue
to render current open source
patents obsolete.
● Will maintain industry leading
technology through continuous
improvement
Alternative Outcome:
● The market may never shift to EV
● Competitors leverage their
resources, channels of distribution
and economies of scale to quickly
meet demand of non-gas vehicles
● Competitor options coming quickly
● Equal if not superior to Tesla’s
existing products
29. Recommendations
● Continue adding EV Supercharging stations (~80%)
● License technology to establish an industry standard
● Leverage brand equity to augment brand awareness
● Maintain fiscally responsible technology development
● Adjust production capability as demand requires
● Increase market share within the EV segment
o Next Gen vehicle
● Expand service centers in key markets
o Option: Partner with national service chain
● Gather support to fight legislation against direct sales
● Investigate hydrogen fuel cell technology
