The objective of our report is to critically analyze the current business strategy of Tesla in the German car market and based on our analysis, provide recommendations for the future course of action.

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2018
An Analysis of TESLA’s
Strategy in Germany
STRATEGIC MANAGEMENT
JAI SHARMA

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Table of Content
Contents
1. OBJECTIVE & INTRODUCTION .................................................................................................... 3
2. TESLA’s STRATEGY ........................................................................................................................ 3
3. MACRO ENVIRONMENT ANALYSIS ............................................................................................ 5
4. MICRO ENVIRONMENT ANALYSIS ............................................................................................ 10
5. STRATEGY RECOMMENDATIONS ............................................................................................ 12
6. CONCLUSION ................................................................................................................................. 14
7. BIBLIOGRAPHY .............................................................................................................................. 15
8. APPENDIX ........................................................................................................................................ 16
Table of Figures
Figure 1 Framework of Analysis _________________________________________________ 3
Figure 2: Industry Lifecycle _____________________________________________________ 7
Figure 3: Competitor Analysis ___________________________________________________ 8
Figure 4 : EV Customer in Germany ______________________________________________ 9
Figure 5 Customer Lifecycle Stage ______________________________________________ 10
Figure 6 VRIO Analysis _______________________________________________________ 12

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1. OBJECTIVE & INTRODUCTION
The objective of our report is to critically analyse the current business strategy of Tesla in
the German car market and based on our analysis, provide recommendations for the
future course of action.
Tesla Motor, whose head office is located at Palo Alto, in the Silicon Valley, is a car
manufacturer which has been founded in 2003 by Martin Eberhard and Marc Tarpenning.
The company has grown from a single retail store in 2008 to a staggering number of 79
stores worldwide in North America, Europe, Asia and Australia. In a few figures, Tesla is
currently earning $11.76 billion in revenues (2017), 289.76 shares outstanding and
37,543 employees. Tesla’s mission is “To accelerate the world’s transition to sustainable
energy.” This report is a critical analysis of Tesla motors current strategy in the German
market. In our analysis, we have classified the industry as the electric vehicle (EV)
industry and the product as battery electric vehicle (BEV). (See Appendix A and B for
definition of EV and BEV) The framework or the scope of our analysis is defined below.
Figure 1 Framework of Analysis
Our analysis is structured such that we will first discuss Tesla’s current strategy followed
by the Macro Environment analysis and Micro Environment analysis. The environment
analysis each contain our critical comments regarding Tesla’s current strategy alignment
with elements in its environment. We conclude our analysis with our strategy
recommendations for Tesla.
2. TESLA’s STRATEGY
TESLA’s current strategy can be classified as an emergent strategy. According to the
literature (Mintzberg, Sumantra, Lampel, & Quinn, 2003), an emergent strategy is one in
which learning is fostered, organizations take action and a pattern is formed. Tesla’s
strategy can further be classified as “deliberately emergent” meaning that the process is
Market:
Germany
Product:
BEV
Industry:
Electric
Vehicle-EV
Framework of Analysis

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constantly managed to allow strategies to emerge enroot. A timeline of key events in
Tesla’s strategy is described below.
• 2005 - Tesla’s initial strategy was to build a high-performance sports car on existing
technology that can be sold to high-end buyers.
• 2006- 2010 - The Roadster (Model Specs, See Appendix F) was launched, and it
was far from perfect. Tesla wanted to focus on core competencies (engine design,
financing, marketing, assembly) and outsource all other parts however the
encountered a problem with over customizing and their costs were spiraling out of
control. Tesla managed to pull itself out of its troubles and learned Valuable lessons
on what it is like to manufacture a car
• 2010 - After its 2010 IPO Tesla made a fresh start. It took over its factory in
Fairmont CA; Tesla decided to use the money it raised to build a more affordable
car.
• 2011- 2012 – Tesla announced Roadster would be discontinued. Tesla’s strategy
was now to build the first real car from scratch and to help the company achieve
the economies of scale. It built the car around the electric powertrain, and Model
S (Model Specs, See Appendix F) was launched.
• 2013-2015 - Tesla builds the Gigafactory to achieve economies of scale in battery
production, advances in software (autopilot), and hardware (charging
infrastructure). Tesla Model X is launched after delays and it announced the
Power wall.
• 2016 – Tesla unveils the plans for Model 3 (Model Specs, See Appendix F), the
mass market car.
• 2017 - Tesla has a market capitalization of $52.3B in only Seven years. (Ford is
$49.9B) (Desjardins, 2018)
It can be observed from the timeline that Tesla’s strategy is an emergent strategy, there
is a process of constant learning. The other elements that are unique to Tesla’s strategy
are its distribution network (sells cars online and in its distribution network) and its ability
to use technology to personalize the customer experience.
According to one expert “Tesla has been aggressive in its use of technologies that are
just emerging. The company’s use of software to control more features of its cars, over-
the-air updates, and a giant touch-screen dashboard interface show how it is taking more
risks than incumbents. “Normally a car’s features are set three years before it hits the
market. Moreover, vehicles tend to have idiosyncratic, and not very intuitive, interfaces.
The use of software and connectivity has made it possible for Tesla to repair issues
remotely, and to update its cars with new features every few months. Also while “beta”
software updates sometimes include bugs, Tesla’s customers are comfortable with this
more cavalier approach.”(Knight, 2016)

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3. MACRO ENVIRONMENT ANALYSIS
A. PESTEL Analysis1
Political
• Aggressive EV adoption targets - One million electric vehicles on the road by
2020 – that is the bold aim of Germany’s “National Electromobility Development
Plan.”(MacDougall, 2013) Chancellor Merkel recently announced that Germany
would fail to meet this ambitious target however Germany has only started its push
for the adoption of EV’s.
• Tax & Other Incentives - The German government Program Electromobility sets
out a range of tax incentive mechanisms and road traffic management measures
to promote electric mobility. The legislation is expected to come into effect in early
2015 and is set to expire in June 2030. (See Appendix C) (MacDougall, 2013)
• Diesel Ban - There is a political push to ban diesel in Germany after dozens of
German cities were reported exceeding the European Union limits on nitrogen
oxide (NOx), known to cause respiratory disease. (Reuters, 2018) The diesel ban
can impact significant changes in the auto industry and will further push the
adoption for E-vehicles.
Economic
• Positive Economic Outlook - The economic outlook in Germany is positive for
the next ten years Which indicates a positive trend in buying vehicles. (GFK, 2016)
Social
• Aware & Interested Consumers - Consumers in Germany show a positive trend
towards electric vehicles however they have concerns regarding the technology
and daily use of the cars.(Deloitte, 2011)
Technological
• Battery Technology- Germany is taking several steps to improve the technology
conducive to the functioning of EV’s. They are contributing towards improving the
battery technology which will lead to higher charging time and spend and improving
the charging infrastructure by developing new infrastructure and updating existing
one. ( See Appendix D) .(Lambert, 2018)
• Charging Infrastructure –: Charging infrastructure is an essential element both
regarding the consumer perspective and also in terms of the industry development
perspective. “Carmakers behind the winning technology will benefit from having an
1
The legal and ecological points are not relevant for our analysis.

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established supply chain and an extensive network, making their vehicles
potentially more attractive to customers worried about embarking upon longer
journeys” (Steitz, 2018)
Tesla’s strategy is closely linked with the external environment, and it can be said that
they are the only automakers who foresaw the changes in the external environment and
correctly responded to them with key strategic moves. Tesla took advantage of the
political momentum and tax incentives that are mentioned in the PESTEL analysis. The
tax incentives offered to consumers are mentioned on Tesla’s website as part of its sales
pitch. Tesla has had a major role to play in developing the technology for the adoption of
EV’s. With regards to technology, its strategy is to develop it along with major
stakeholders. The social acceptance of EV’s as something that can be used by the
masses can also be credited to Tesla. Tesla understands that Germany is one of the key
markets because of its economic potential and it is even considering setting up one of its
Gigafactory’s in Germany.
B. Market Growth Predictions
The growth of the industry and the BEV product are dependent on various factors which
are still in the development stage however according to the leading industry analysts it
can be safely predicted that by 2035 BEV cars will be close to 100% of new car
registrations in Germany See Appendix M) The reason for this radical development in the
auto industry is that the current barriers to adoption will all be broken. The total cost or
price of BEV’s will be less than other options, the battery technology will be very
advanced, and the charging infrastructure will be highly developed. All these factors will
make the other options in the market obsolete.(Ehring & Witteveen, 2017)
C. Industry Life Cycle Analysis
The EV industry is in the introductory or market development phase in Germany because
of the following factors. The technology that runs the cars (battery) and supporting
infrastructure is new and developing. (Summit & Outlook, 2014)The industry standards
and regulations are still developing in Germany and globally.(MacDougall, 2013)The
product is still going through fundamental changes and breakthrough is expected by
2020. (New & Finance, 2017). The consumer demand though looking positive is still
dependent on the development of technology and infrastructure. (McKinsey, 2016)

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Figure 2: Industry Lifecycle
Tesla’s emergent strategy is aligned with the introductory stage of the industry lifecycle.
Tesla’s strategy is focused on market and product development which is the right strategy
at this stage of the lifecycle.
D. Degree of Turbulence
Regarding degree of turbulence, the industry can be classified as “Creative.” The variety
of change is very high, the product, infrastructure, and technology are constantly
developing and subject to change. The frequency of change can be classified as frequent
as the changes are constantly being rolled out. The urgency is very high as both the
consumers and market elements are pushing for new developments. The events and
outcome are unpredictable because consumer preferences and market factors are still
developing, and the development of these factors will determine the outcome which is still
unclear. Tesla is highly flexible and innovative, and this allows them to react to the high
degree of turbulence that is a feature of this industry.
D. Competitor Analysis
Tesla faces competition in Germany with local car manufacturers. German Car
manufacturers have historically dominated the German market, and Tesla in the E-Car
market has only recently challenged them. The characteristics used for the competitor
analysis here are those that have been identified as key success factors for this industry
as mentioned in (Gissler, Raab, Tix, & Merk, 2016)
• Battery Technology: Tesla has the most advanced battery technology in the
industry. BMW is the only competitor that is investing in the research for battery
Sales
Introduction Growth Maturity Decline
Industry Lifecycle EV in Germany

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technology otherwise the other competitors lack the resources for advanced
battery technology. (Ali, 2018)
• Charging Infrastructure-Charging infrastructure will play a key role in the
adoption of BEV’s and the car manufacturer that can ensure its customers will find
a charging station as and when they need will be successful. Tesla has the widest,
charging network. According to one expert: “it does seem that whatever the
problems in the way of the successful development of electric cars, Tesla will sail
serenely on, bypassing the massive traffic jams at highway recharging stations as
its lucky owners plug into private superchargers only they can use.”(Winton, 2017)
• Flexibility: Tesla is built from the ground up as compared to legacy automakers
who already have a lot of existing infrastructure that makes them less agile and
flexible.
• Leadership Capability: Tesla has a visionary leader in the form of Elon Musk.
Elon Musk has had an instrumental role in shaping the electric vehicle market, and
his vision has proved a key in moving the industry forward.
• Mass Market Production: Tesla’s biggest obstacle has been mass production
and time and again they have fallen short of their targets for producing vehicles.
This is one area in which the legacy car manufacturers are way ahead of Tesla,
and their assembly lines are very efficient at mass production.
• Local Market Knowledge: Tesla is an American automaker with very little
knowledge of the market. All other Tesla competitors have this advantage over
Tesla that they have local market knowledge.
• Financial Strength: Tesla has still a long way to go before it can become
financially independent. It has been close to bankruptcy in the past and has faced
financial difficulties however Tesla’s competition comes with deep pockets, and
they have built their financial strength over several years.
Features Importance TESLA BMW Daimler VW
Battery Technology High
Charging Infrastructure High
Flexibility High
Leadership capability High
Mass Market Production High
Local Market Knowledge Moderate
Financial Strength Moderate
Figure 3: Competitor Analysis

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The Competitor analysis figure above shows the position of Tesla with regards to key
features in comparison to its competition. A blue circle indicates that the organization has
the capability in that feature. For example, Tesla has the capability for battery technology
while in terms of Financial strength Tesla does not have the capability. Tesla current
strategy has given it a great launching pad to excel in an industry full of legacy players.
In a short span of seven years Tesla has taken a lead against its key competitors.
E. Target Customer Persona & Customer Lifecycle Stage
This target persona has been adapted from (Deloitte, 2011) and (Trommer, Jarass, &
Kolarova, 2015).
Figure 4 : EV Customer in Germany
The customer here are those people who is in the market to purchase a car. The customer
lifecycle analysis will help us understand German customer who are in the market for
EV’s and will also provide direction for Tesla in terms of its marketing strategy, the
objective is to move as many customers as possible from Awareness to Post action stage.
According to (Deloitte, 2011) 9% of surveyed users in Germany include early adopters or
those looking to purchase an EV in the next 12 months.

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Figure 5 Customer Lifecycle Stage
In terms of catering to the needs of the customers Tesla’s strategy is only focused on the
luxury sedan market and it is not catering to the target market for EV’s as portrayed in the
Persona. In terms of customer Lifecycle stage, it can be seen that a large portion of the
customers in Germany are interested however their needs or expectations are not being
met by existing payers in the market.
4. MICRO ENVIRONMENT ANALYSIS
A. SWOT Analysis2
Strengths
• First Mover in the EV Industry: Tesla has pure and complete advantages over
other companies in manufacturing environmental friendly cars and BEV’s for the
large luxury car segment. The cars use only electricity, the engines are powered
by batteries.
• Flexible and Agile: In an industry full of Legacy players Tesla is a newbie that has
started from scratch. In an industry that requires flexibility and the ability to quickly
react to changing conditions starting from scratch is a great strength as it allows
Tesla to innovate and be agile.
• Exclusive Focus on Sustainability – The sustainable innovation model adopted
by Tesla is one of its most critical strengths. From its vehicle to solar energy and
energy storage systems, all its products are related to sustainability. The focus is
on helping the world transition towards a better and energy efficient world. Its
vehicles and energy storage systems are highly innovative and equipped with best
in class technologies and several exceptional functionalities.
2
For Opportunities and Threats please refer to PESTEL Analysis.
5
9

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• Gigafactory/Battery technology–The purpose of this factory is manufacturing
lithium batteries for Tesla cars. TESLA has announced a new giga factory in
Germany for European Market which will increase Tesla's ability to deliver high-
speed, high-quality production exponentially, while substantially reducing capital
expenditures per vehicle.
• Charging Infrastructure – Tesla has an independent fast charging network that it
owns and offers exclusively to its customers.
• The TESLA Brand – Tesla is a well-recognized brand. Apart from its vehicles, it is
also known for a large range of other kind of sustainability products. The brand has
gained reputation and global recognition through its products and services
• Elon Musk – Elon Musk is a visionary leader and his vision and direction has
shaped the EV industry.
• Customizing Customer Experience – Tesla’s distribution network gives it a direct
link with the customers and its ability to personalize customer experience provides
customers with a unique combination they have not seen before in the Auto
industry.
Weakness
• Limited Experience in Mass Production: Tesla does not have sufficient
experience in auto manufacturing or in supply chain when it comes to producing
for the mass market and time and again they have had to revise their targeted
production because they could not meet the targets. It is a weakness they
understand, and they need to resolve it, In the words of Elon Musk On the call,
Musk stressed that as good as Tesla is at design and technology, the company
needs to up its game as a manufacturer. "We take it very seriously, and we need
to solve it if we're going to scale and scale rapidly," (DeBord, 2016)
• High Costs – Tesla vehicles are costlier than the ordinary vehicles and, in this
regard, they rank among the premium category vehicles. Apart from its Model 3,
Model S and Model X are costly and therefore not affordable for the middle-class
consumers. The high cost of Tesla vehicles is an important weakness that has kept
Tesla’s sales from growing fast.
• Over-Promising and Under Delivering: Tesla and Elon Musk have developed a
reputation of over promising and under delivering in targets. They need to build a
brand that is trustworthy and reliable for customers.
• Control over Finances
Tesla has demonstrated that it has difficulty managing its costs and its over
ambitiousness can spiral out of control. In addition, it has yet to show profitability.

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B. VRIO Analysis
Looking at the Strengths of TESLA, especially when we talk about TESLA providing
environment friendly cars which resonates with the 2020 Vision of the German
Government (1 million electric vehicles on road), this can really help TESLA in terms of
sales growth (increasing market share).
Resource/Capability V R I O Competitive Implication
Battery technology/Gigafactory V R I O Sustained Competitive
Advantage
Super Charger Network V R Temp Competitive Advantage
Ability to innovate V R Temp Competitive Advantage
Distribution Network V R Temp Competitive Advantage
Manufacturing Capabilities Competitive Disadvantage
Figure 6 VRIO Analysis
Another factor to consider is, TESLA’s announcement to open a Giga Factory on the
German-French border, we think, this will be a critical factor in terms of providing
opportunities for TESLA’s growth as it will increase the efficiency of production line and
lead to a faster delivery time thus resulting in customer satisfaction. It will also reduce the
capital expenditure per vehicle for TESLA (by manufacturing lithium batteries) and
eventually increase profits in the long run. Considering the political support and looking
at the way the German market is shaping up, we do feel that TESLA can do exceptionally
well in Germany.
However, there are always two sides to a coin, there are some factors that we feel, might
become a hindrance for TESLA such as high cost, Germany is a high potential market
however the electric car market is still at an early stage, so people might have the
spending power but they still might not be comfortable to switch from a petrol/diesel option
to an electric one. It is all about the mindset of the consumer. Companies like Daimler,
BMW and Mercedes are the big fishes in Germany and to overcome that, would be a
huge challenge for TESLA as it is starting from scratch and gradually building its brand
unlike a BMW or Mercedes. TESLA needs to build trust between them and the German
consumer.
5. STRATEGY RECOMMENDATIONS
The overall strategy direction that we recommend is both the product development
(battery technology) and market development (mass market appeal). The reason is that
Tesla is right now catering to a very small niche segment, the luxury sedan market. To be
a successful automaker, it has to design and develop its product that appeals to the mass
segment and Elon Musk’s vision is also directing Tesla in the same direction. The different

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strategic steps Tesla can take to realize this strategy are described below with the help of
TOWS tool for deriving strategic options.
a) SO Strategic Options
Gigafactory is the Key to Mass-market Production- Tesla’s greatest strength is
its Gigafactory and if used according to plan it can allow Tesla to capitalize on the
market opportunity of EV’s. According to analysts Tesla’s vision is to revolutionize
the auto manufacturing process with Gigafactory and once done it can mass
produce EV’s at a much higher rate as currently possible with traditional
manufacturers.
b) ST Strategic Options
Battle the Threat of Legacy Automakers with agility-Tesla is highly flexible and
agile since it is not a legacy automaker. Tesla has no existing systems, plants or
engine technology that needs to be updated or changed. It can build everything
from scratch and this gives it high degree of flexibility when compared to
competition.
Charging Infrastructure to create loyal Customers- In the German market
consumers largely prefer German car brands and one way for a foreign brand like
Tesla to win them over is to satisfy their need for a charging infrastructure. As
identified in the Target persona in the macroenvironment analysis, a good charging
infrastructure is a key determinant for the adoption of EV’s in Germany.
c) WO Strategic Options
Minimize Costs with the help of Govt Incentives - Tesla’s vehicles are costlier
than other vehicles however they are also truly electric BEV vehicles which
qualifies them for the highest tax incentives offered the government. Tesla can
overcome its high costs by incorporating incentives offered to consumers in its final
cost or price estimates.
d) WT Strategic Options
Attract Industry Experts - Tesla needs to attract experts to help it build the
capabilities required to produce vehicles for the mass market and Elon Musk
understand that this is a week area for the organization and if they can master this,
it will allow them to truly outshine their competition.

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6. CONCLUSION
Our Internal concludes that there is great potential for the EV industry to develop in
Germany and the BEV product is set to change the auto industry as it exists. The
industry is on the verge of a revolutionary change and our internal analysis reveals
that Tesla is sitting on a great platform to launch itself in this promising industry and
the German Market. Tesla has certain weaknesses that we have highlighted in our
SWOT however they can be overcome or compensated for with the right strategic
moves.
Tesla’s ambitions and drive towards electromobility will benefit the consumers and the
industry. We would like to end by stating that all the indicators point in the direction
that Tesla is going to be the game changer in the auto industry.

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7. BIBLIOGRAPHY
1. DeBord, M. (2016). Elon Musk just made a totally mind-blowing change to Tesla’s
strategy.
2. Deloitte. (2011). Unplugged: Electric vehicle realities versus consumer expectations.
3. Desjardins, J. (2018). Visualizing Elon Musk’s Vision for the Future of Tesla. Retrieved
from http://www.visualcapitalist.com/elon-musks-vision-future-of-tesla/
4. Ehring, M., & Witteveen, J. (2017). Breakthrough of electric vehicle threatens
European car industry, (July), 1–18.
5. GFK. (2016). Germans’ purchasing power climbs 2.8 percent in 2018, (February),
6. Gissler, A., Raab, C., Tix, M., & Merk, S. (2016). Electric Vehicle Market Attractiveness
Unraveling Challenges and Opportunities. Accenture. Retrieved from
https://www.accenture.com/t00010101T000000__w__/gb-en/_acnmedia/PDF-
37/accenture-electric-vehicle-market-
attractiveness.pdf%0Ahttps://www.accenture.com/t00010101T000000__w__/nz-
en/_acnmedia/PDF-37/accenture-electric-vehicle-market-attractiveness.pdf
7. KBA. (n.d.). Kraftfahrt-Bundesamt.
8. Kissinger, D. (2018). Tesla Inc. Five Forces Analysis (Porter’s Model) &
Recommendations.
9. Knight, W. (2016). Tesla’s Strategy Is Risky and Aggressive, but It Has Worked.
10.Lambert, F. (2018). Germany is getting 12,000 new electric car charging stations by
converting distribution boxes. Retrieved from https://electrek.co/2018/03/05/electric-
car-charging-stations-converting-distribution-boxes/
11.MacDougall, W. (2013). Electromobility in Germany: Vision 2020 and Beyond.
Germany Trade & Invest, 46.
12.McKinsey. (2016). Electric Vehicles in Europe. Amsterdam Roundtables Foundation
and McKinsey & Company, (20), 60. https://doi.org/10.2800/100230
13.Mintzberg, H., Sumantra, G., Lampel, J., & Quinn, J. B. (2003). The Strategy Process:
Concepts, Contexts, Cases.
14.New, B., & Finance, E. (2017). Electric Vehicle Outlook 2017, (July).
15.Reuters. (2018). German cities free to ban older diesel cars immediately.
16.Steitz, C. (2018). Plug wars: the battle for electric car supremacyNo Title.
17.Summit, V., & Outlook, E. (2014). Market Outlook of the Electric Vehicle Market and
Charging Infrastructure Virtual Summit : EMOBILITY OUTLOOK 2014 Global
Megatrends Affecting Mobility in the Future.
18.Trommer, S., Jarass, J., & Kolarova, V. (2015). Early adopters of electric vehicles in
Germany unveiled, 1–11.
19.Winton, N. (2017). As Auto Makers Seek To Match Tesla Charging Network, Problems
Loom.

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8. APPENDIX
A: In the broadest sense, an electric vehicle is any vehicle that has at least one elec-
tric motor in the power train driving the vehicle. In its purest form, the vehicle is
powered only by the onboard electric motor(s), and, as such, is considered to be an
“electric vehicle” (EV).(MacDougall, 2013)
B: A battery electric vehicle (BEV), as the name implies, uses chargeable batteries to
power electric motors and motor controllers for propulsion. New battery technology
advances (more specifically, lithium-ion batteries) are making BEVs an increasingly
attractive proposition as oil prices continue to rise. BEVs are currently best suited to
the small car segment and shorter travel time and business models (e.g. car
sharing).(MacDougall, 2013)
C: Tax Incentive Mechanisms 1. Motor Vehicle Tax Exemption All completely
electric-powered vehicles are exempt from motor vehicle tax. The exemption period
has been extended from five to ten years for all vehicles registered by December 31,
2015. Thereafter, completely electric vehicles registered between January 1, 2016,
and December 31, 2020, are motor vehicle tax exemption for a period of five years. 2.
Company Car Taxation The Annual Tax Act 2013 rule regulating private use of
commercial vehicles has been improved in order to positively counteract the relative
price gulf between electric and hybrid electric vehicles and conventionally powered
vehicles. The higher cost price of electric vehicles compared to vehicles with
conventional combustion engines will be balanced in terms of the measurable benefit
attributed to possession of a company car. This will effectively ensure that electric and
hybrid electric vehicles are not subject to an income-tax disadvantage as was his-
torically the case.
Road Traffic Measures 1. Special Parking Places for Electric Vehicles The German
Federal Government is comprehensively behind electric vehicles. Special parking
privileges for electric vehicles belong to the array of promotional measures drawn up
to further promote electromobility. To that end, the government has prepared a traffic
guideline statement outlining the uniform sign-posting of parking places (particularly
charging stations in public traffic areas) which allows local authorities to implement
existing legislation more easily. 2. Suspension of Restricted Entry Access for Electric
Vehicles Delivery vehicles are ideal for electric drive systems. Restricted entry access
will be relaxed or entirely suspended for delivery vehicles. This includes, in particular,
time entry restrictions and access restrictions remitted to conventionally driven
vehicles for noise limit reasons. Prioritization of loading and delivery traffic is already
possible under law (e.g. in pedestrian zones according to supplementary designation).
Special prioritization only for electric-powered vehicles would represent a significant

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handicapping of normal loading and delivery vehicles. For that reason, an
improvement, for this reason, must be justified by environmental benefits. The federal
government will work with the federal states and separate local authorities to further
develop the existing environmental law framework conditions. 3. Authorized Use of
Bus Lanes for Electric Vehicles Granting electric vehicles authorized the use of bus
lanes potentially represents an attractive additional incentive for electric vehicle
purchase and use. For this purpose, practical experiences obtained in the flagship
and model regions will be assessed to determine the viability of such a scheme and
to minimize any possible adverse effect on bus traffic. 4. Special Traffic Lanes for
Electric Vehicles Special traffic lanes and loading lanes could be used to provide an
additional medium to the long-term incentive to electric vehicle use. The practicability
of such an initiative will be evaluated within the framework of the flagship and model
regions projects. Based on these experiences the government will complement the
relevant parent act where necessary. (MacDougall, 2013)
D: Telekom, a large European telecommunications company headquartered in
Germany, confirmed that they are putting in place a massive plan to more than double
the current electric car charging infrastructure by converting their distribution boxes.
With around 10,800 public charge points in Germany at the moment, the plan alone
would double the current charging infrastructure in the country.(Lambert, 2018)
E: Long term Strategic Options for Tesla

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F: Tesla Model Specs

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G: Porter’s Five Forces Analysis
1. The threat of new entry
(a) High cost of brand development (weak force)
(b) High cost of doing business (weak force)
(c) High economies of scale (weak force)

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Tesla’s business is difficult to compete with, especially because of the high cost of brand
development, along with the popularity of Elon Musk. For example, it is difficult for new
entrants to match the company’s strong brand.
n addition, automobile manufacturing has high costs, which impose a barrier to new firms.
Also, established players like Tesla benefit from increasing economies of scale, which
new entrants can only achieve upon exceeding a production threshold. Based on the
external factors in this aspect of the Five Forces Analysis, the threat of new entry is only
a minor strategic management concern in Tesla Inc.’s industry environment.(Kissinger,
2018)
2. Bargaining power of buyers
The bargaining power of buyers is moderate. This is because TESLA depend on
their partnership with Daimler and Toyota, according to the Annual Report of
TESLA. This relationship with Daimler and Toyota is very important for TESLA,
because supplying these companies aggregates the high share of their profit
and they can’t lose these companies which makes their power substantially high.
Despite that, they also retail their cars to individual consumers and government
enticements allow possible consumer tax credit deduction. These programs
dynamite the demand of the electric cars that make bargaining power of buyer’s
low.
3. The threat of substitutes
The threat of substitutes in an automated car industry is considerably low, this is
because there are few choices of substitution of car. One of the substitution could
be cycling or walking which is inconvenient for long-distance journeys. Another
substitution could be mass transport which include trains, buses, and subways
which are suitable for local and distance travelling. These days people prefer their
own vehicles which is more suitable for them.
4. The bargaining power of suppliers
The bargaining power of suppliers is very high. This is mainly because TESLA is
very reliant on their suppliers and if any issues are caused with mechanisms
delivering will propagate in production severance that will reflect negatively on
TESLA’s company image. This is also because TESLA purchases mechanisms
from over 200 suppliers all over the world and despite of building close
partnerships with their main suppliers (e.g. Panasonic), working together on

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replacing Lotus supplier’s chassis with trading by themselves and developing the
new battery cells, suppliers stay single source of components used in their cars.
5. The intensity of rivalry in the industry
The rivalry in the automated car industry is very competitive. However, within this
market in which TESLA has positioned itself, the rivalry is very moderate. This is
only because of the small number of completion in the aspect of different 18
models. Moreover, this market is very attractive too and also is expanding very
fast, therefore more companies such as Audi, Volkswagen, and BMW have entered
recently with the plug-in models into the market. Besides this, companies have
been trying to generate their own niches by developing alternatives like
environmental friendly cars such as hybrid cars, small performance turbo diesel
and d biodiesel cars. Companies will have to become more intensive and will need
to keep improving and generating better cars because in the future, rivalry will be
more demanding.(Kissinger, 2018)
H: Powertrain Portfolio

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I: Fuel Cell Disadvantage
In a fuel cell, hydrogen and oxygen meet on an electrolyte membrane and are
chemically converted to water. This reaction releases current that can be used to
drive an electric motor. In comparison to the BEV, however, this method has a clear
disadvantage in terms of efficiency: in order to have 20 kWh of electricity available
for 100 kilometres at the car wheel, the BEV requires around 26.3 kWh of electricity
produced by e g. a wind energy plant (Eaves & Eaves, 2004). A power network
efficiency of 92%, the charger's efficiency of 89%, the battery of 94% and the
powertrain of 89% also "consume" electricity. The FCV, on the other hand, requires
67.3 kWh of power generation, which is about 2.5 times as much as a BEV. Here,
electrolysis with an efficiency of 72%, pipeline transport with 86%, fuel cells with
54% and the electric drive train with 89% efficiency "consume" the largest share of
the renewable electricity generated, so that only just under 30% is available for
driving The advantage of FCV is that hydrogen can be stored in principle.
J: Tesla Sales Figures
Germany 2014 2015 2016 2017
Total Tesla Sales
815
1,582
1,904
3,331
Model S
815
1,582
1,474 2,241
Model X
430
1,090
(KBA, n.d.)
K: Labor Requirements for BEV powertrain

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L: Charging Points EU
M: Market Share of BEV and forecasts
(Ehring & Witteveen, 2017)