Tesla Company marketing Research final draft

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2017
Chenlei Liu(Leo) 1188695
Yuchen Wang 1100035
Tianyi Ma 1175659
Peilin Li 1184822
Shuwei Ding 1185680
Ying Wang (Rebecca) 1193652
EMBA E12A
3/17/2017

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Table of Contents
Part I: introduction............................................................................................................. 3
1.1 Objective of the project ....................................................................................... 3
1.2 Importance of increasing China market share............................................................ 4
1.3 Outline of project .................................................................................................. 5
2 Company History And Philosophy...................................................................................... 6
2.1 Brief history of the company ................................................................................... 6
2.2 Philosophy and marketing strategy .......................................................................... 7
Part III. Environment Analysis .............................................................................................. 9
3.1 Demographics....................................................................................................... 9
3.2 Environmental..................................................................................................... 11
3.3 Competition........................................................................................................ 13
PART IV: DESCRIPTION OF TARGET MARKET......................................................................... 15
4.1 THE MARKETING REASERCH OF NEW ENERGY AUTOMOBILE IN CHINA .................... 15
4.2 THE MARKETING REASERCH OF TESLA IN CHINA...................................................... 16
4.3 CITIZENS’ ATTITUDE TO PEV .................................................................................. 17
4.4 THE LIFESTYLE OF TARGET CONSUMERS IN CHINA.................................................... 19
4.3 CITIZENS’ ATTITUDE TO PEV .................................................................................. 22
4.4 THE LIFESTYLE OF TARGET CONSUMERS IN CHINA ..................................... 25
Part V: Analysis of Marketing Mix....................................................................................... 28
5.1 PRODUCT ........................................................................................................... 28
5.2 Price Points......................................................................................................... 31
5.3 Place.................................................................................................................. 36
5.4 Promotion .......................................................................................................... 38
PART VI: STRENGTHS, WEAKNESSES AND RECOMMENDATIONS ............................................. 44
6.1 Strengths............................................................................................................ 44
6.2 Weaknesses........................................................................................................ 45
6.3 Recommendations............................................................................................... 47
Part VII. References.......................................................................................................... 48

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Tesla----Increasing Market Share in China
Part I: introduction
1.1 Objective of the project
New energy vehicles will replace the traditional car which is an inevitable trend
in nowadays. The reason is that the resource conditions and environmental conditions
are forcing the traditional car gradually go out of the market, the government policies
also have roles in promoting this trend. Behind this implication, the current
development trend is that the traditional car prices will soon be replaced into
large-scale in the new energy automotive market. The next few years is the golden age
for Tesla to accumulate the advantages, it is best to accelerate the development,
master the core technologies.
Tesla Motors, a company that manufactures and sells electric vehicles and car
components, which founded in 2003 and are headquartered in Silicon Valley,
California, USA. Tesla Motor Company is the world's first use of lithium-ion battery
electric car company.
Tesla's special feature is that the Co-found Elon Musk realized that this world no
longer needs a car company, but a production of IT and new energy vehicles
combined with the transport when the company has just establishment in 2003. Its
products feature with a unique designed appearance, energy saving, environmental

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protection and other advanced technological ideas which are popular spread all over
US market.
Today, Tesla is trying to copy its success from the United States to other
countries and regions, China is one of the target market, but more than a year
expanded in China, Tesla encountered its lowest sales performance. From our
academic research, we will approach the US high-tech electric car company Tesla and
summed up its successful ways of US model, and to sort out the Tesla's China Road,
trying to show the Chinese enterprises need to pay attention to new ideas.
1.2 Importance of increasing China market share
At the beginning of 2013, Tesla CEO Elon Musk decided to let Tesla developed
in China. At the beginning, Tesla attracted a lot of attentions, even many celebrities
have become the first order users. Nevertheless, the story is different from the United
States, it seems Tesla was full of trouble in China. Tesla in China's history led to a
variety of thinking, this paper will analize the marketing strategies, future plans from
environment, target markets, marketing mix concepts and strengths and weakness to
unfold Tesla China.
In the short term, take a decade as an example, the production of fuel cell
vehicles will be leaps and bounds, the limelight will not be in the second place. In
another word, the current domestic policy support is mainly for fuel cell vehicles,
many cities of the bus system and taxi systems are beginning to support the
introduction of its fuel cell vehicles by its local government. However, in the long run,

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after ten years later, electric cars will gradually become a mainstream. In one hand,
the fuel cell vehicle in the final analysis is a transitional product, retaining many of
the characteristics of traditional cars, which also led to its technological innovation
and its potential is limited. On the other hand, compared to electric vehicles and fuel
cell vehicles, it is just the equivalent of power generation take over to the power plant.
In contrast, the power plant technology is more professional, there is no space
constraints (under this circumstance, the weight loss technology will be excluded),
and the power generation will be more efficient.
In conclusion, electric cars will have a huge potential market until it encounters
the next innovation revolutions in other aspects of vehicles. In 2017, Tesla should
focus on its Chinese electric car market
1.3 Outline of project
In the following research, based on our primary research, we will briefly describe
the history and Philosophy of Tesla. Also, focus on environmental analysis, we will
explain the demographics, environmental, social cultural and legal laws of electric
cars in China market. Furthermore, according to marketing management, we will
separately introduce the target market and the potential consumers in China. At last,
but not the least, we will analyze a comprehensive market in products, price,
promotion and places this four aspects. As a conclusion of our report, we will
summarize the strengths, weaknesses of Tesla China market as a marketer. Also, as
forecasting, we will give our recommendations for increasing the current market share

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of Tesla China.
2 Company History And Philosophy
2.1 Brief history of the company
Tesla was founded in 2003 not by Elon Musk, but by martin Eberhard and Marc
Tarpenning. The two bootstrapped the fledgling auto company until Elon Musk led
the company’s $7.5 million Series A financing round in February 2004, when Elon
Musk became the company’s chairman of the board (Escher, 2015) .
Tesla’s engineers first designed a powertrain for a sports car built around an AC
induction motor, patented in 1888 by Nikola Tesla, the inventor who inspired the
company’s name. The resulting Tesla Roadster was launched in 2008. Accelerating
from 0 to 60 mph in 3.7 seconds and achieving a range of 245 miles per charge of its
lithium ion battery, the Roadster set a new standard for electric mobility. (Musk,
2015)
On June 30th, 2008, Tesla unveiled the Model S — the first car they’d really
come to be known for. With a starting price of $50,000 and seating for seven, the
Model S was supposed to be Tesla’s more “affordable” family sedan. (Escher, 2015)
According to Elon Musk, Model S has redefined the very concept of a four-door car
and achieved a 5-star safety rating from the U.S. National Highway Traffic Safety
Administration.

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Tesla unveiled its first SUV and AWD vehicle on February 9, 2012, the Model X.
The stunning gullwing-type doors featured in the concept will be included in the
production vehicle. (Escher, 2015) Model X is the safest, fastest and most capable
sport utility vehicle in history. With all-wheel drive and a 100 kWh battery providing
295 miles of range, Model X has ample seating for seven adults and all of their gear.
And it’s ludicrously fast, accelerating from zero to 60 miles per hour in as fast as 2.9
seconds.
According to Greg Kumparak, in the middle of 2014, Tesla announced that it
would be using everything it’s learned about making cars so far to introduce a
significantly more affordable model called the Model 3, which can do 0-60 mph in 6
seconds. Model 3’s estimated starting price will start at $35,000. And Model 3 is able
to be ordered now and is scheduled to start shipping at the end of 2017.
Tesla’s vehicles are produced at its factory in Fremont, California, previously
home to New United Motor Manufacturing Inc., a joint venture between Toyota and
General Motors. The Tesla Factory has returned thousands of jobs to the area and is
capable of producing 2,000 cars a week. (Musk, 2015)
2.2 Philosophy and marketing strategy
2.2.1 Missionof Tesla
Tesla has a very clear mission: to accelerate the world’s transition to sustainable
energy. Tesla wants its owners to enjoy the benefit of charging at home so they never

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have to visit a gas station or spend a cent on gasoline (Musk, 2016). Superchargers
now connect popular routes in North America, Europe, and Asia Pacific. Elon Musk
also mentioned “the long term plan is to build a wide range of models, including
affordably priced family cars” (Musk, 2006). Tesla aims to occupy the world’s
electricity energy market and replace petroleum and natural gas.
2.2.2 Global Strategy
Tesla is expanding its manufacturing across the world. The company now has
manufacturing sectors in Tilburg Netherlands, Lanthrop California, and a Gigafactory
in Nevada that is planned to mass-produce the affordable Model 3. In 2020, this
Gigafactory will also produce more lithium ion cells than the world’s total combined
output in 2013.
According to Elon, Tesla is also accelerating store openings and plans to add a
new retail location every four days on average during the remainder of Q3 and
through Q4. Tesla keeps adding stores in new population-dense markets like Taipei,
Seoul, and Mexico City, while also adding stores in most mature markets like
California.

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Part III. Environment Analysis
3.1 Demographics
3.1.1 Global automobile holdings
Global automobile holdings all over the world have been more than 1.1 billion
by the end of 2012. And in China, the number was just more than 109 million. In
America, the number was more than 250 million (2012, Japan Automobile
Manufacturers Association). In year 2015, the automobiles in china have increased to
172 million(2016, Musxh), and that in America have been 259 million(2016, Zheng).
We can conclude from this part that the growth rate of automobile holdings in
China is very fast, and that in America is very slow.
3.1.2 Automobile holdings ofnew energy vehicles
The number of new energy vehicles in china is 583.2 thousand by the end of
2015, increasing 169.48% compared to that in year 2014, 56.93% of which were
pure electric vehicles (332 thousand) increasing 317.06% compared to that in year
2014(2016, E and Dou).
From this part, we can see clearly the new energy vehicles have a very good
market prospect in China, especially the pure electric vehicles. At the same time, we
can find the potential in Chinese marketing.

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3.1.3 New cars in China
In China, a total of 23.85 million cars in 2015 new registered, has a net gain of
17.81 million cars, are the historical highest level in years. And the desire to buy cars
continued strong(2016, E and Dou).
From this part, China has been the biggest market in cars sale because of the
largest sales in the whole world.
3.1.4 The amount of drivers in China
In China, motor vehicle drivers already amounted to 327 million people,
including vehicle driving more than 280 million people. In recent years, the number
of motor vehicle drivers showed a trend of growth, nearly five years the average
annual increment of 22.99 million people. Drivers driving experience less than one
year, 36.13 million people, 11.04% of drivers(2016, E and Dou).
From this part, we can find there are a lot of potential customers in China,
more and more young people are able to be divers.
3.1.5 Sales of new energy car
The new energy car sold 123 thousand in 2015. Tesla with up to 22000(2015,
Defender of Leningrad). Chinese new energy car sales in 2015 of 2015 thousand Tesla
is only 4000. Less than 8% of its global total sales of 50500 vehicles. But in 2014
only 2499 Tesla, up 62% from a year earlier. But this is far from Tesla CEO Elon
Musk want Numbers(2016, Yichuidingyin).

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We can find Tesla have large troubles in Chinese market.
3.1.6 Poor conditions
Lack of charging pile still become the bottleneck of restricting China's new
energy vehicle development. By the end of 2015, China's new energy vehicles less
than 10:1(2015, Defender of Leningrad).
3.2 Environmental
3.2.1 Chinese policy direction:
3.2.1.1 The Ministry of Finance: Vehicle and vessel tax of the new energy
cars will be canceled.
On 7th of May in 2015, the Ministry of Finance, State Administration of
Taxation and the Ministry of Industry and Information Technology announced “The
inform about the favorable policy of using new energy vehicle and vessel on tax”, it
shows, from 7th of May, vehicle and vessel tax of the new energy vehicle and vessel
will be canceled and that of energy-efficient vehicle and vessel will be half of
before.(2015, Zhonghangqingbaowang).
3.2.1.2 The Ministry of Science and Technology: We will perfect the power
system and the industry chain of the electric automobile.
On 25th of February in 2015, the Ministry of Science and Technology
announced”The intensive special execute solutions about the government focusing on
research and development of new energy automobile”, it shows, the government will

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perfect the power system and the industry chain of the electric automobile until 2020.
At present, the change, which makes the power electrification, lightweight
structure and vehicle intelligent as the cores, is underway. ”The intensive special
execute solutions about the government focusing on research and development of new
energy automobile” raised the clear goals about the core technology of the electric
automobile, such as the specific parameters about the monomer ratio energy of the
power battery, the technology level of drive motor, and provide the technology
support to achieve , new energy automobile ownership will be 5000 thousand by the
end of 2020(2015, Zhonghangqingbaowang).
3.2.1.3 The Ministry of Transportation: encourage the generalization of new
energy automobile and hope the local government do not restrict on purchases and
driving.
On 18th of March in 2015, the Ministry of Transportation announced “About the
implementation opinions of accelerate the application of new energy vehicles in the
transportation industry”. ”Opinion” pointed out, the priority rights of buses and taxis
in cities should be awarded the new energy vehicles, and tend to the transportation
enterprise whose generalization of the new energy automobile is better, or found the
special transportation enterprise for the new energy automobile. They also hope to get
the local people and the government's support, do not restrict on purchases and
driving, appropriately relax the right to run the new energy taxi indicators.(2015,
Zhonghangqingbaowang)

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3.2.2 Some concrete measures insome cities:
3.2.2.1 In 2017, Beijing's new energy vehicles subsidies will be carried out in
accordance with the 50% of the country's fiscal subsidies subsidies, state and this
municipality financial aid is highest do not exceed 60% of the total vehicle sales
price.(2017, Jun)
3.2.2.2 Until 2020, the Anhui province to ensure that the new energy
automobile production reached 200000, realize large-scale exports. Product sales
should be more than 10% of the total sales of new energy vehicles and 20% of the
total sales of Chinese independent brand new energy vehicles.(2017, Jun)
3.2.2.3 On February 9, 2017, Nanjing government public“Improve the public
transport enterprise cost regulation finance subsidies implementation plan”, it points
out, for new energy vehicles bus, the enterprise can apply for individual subsidies,
that is because of the new energy bus purchase cost is higher, offer certain
subsidy.(2017, Jun)
3.3 Competition
3.3.1 Cruising ability:
Compared with all of the products from other companies in new energy cars,
Tesla has better cruising ability.
Brand Tesl
a
B
MW Ford Benz KIA
Che
vrolet

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Model Mod
el X i3 Focus
B-C
lass
Sou
l EV
Spar
k EV
Cruising
(km)
402
~434 130
122~
135 140 150 132
(Note: The data in the chart is recording from www.qq.com Technology Channel,
2015, Yang)
3.3.2 Strong power:
Compared with all of the products from other companies in new energy cars,
Tesla has better power to speed up.
Bran
d Tesla KIA
Be
nz
B
MW
F
ord
Chev
rolet
VW
Mod
el
Mo
del S
Sou
l EV
B-
Class i3
F
ocus
Spark
EV
e-Golf
BHP
373 X 177 170 143
X 115
Time
to
100km/h
4.2s 11.5s 8s 7s X 7.2s
10s
(Note: The data in the chart is recording from www.qq.com Technology Channel,
2015, Yang)

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3.3.3 Technology of the rechargeable and battery
Tesla pile on behalf of the world's most advanced battery technology. Tesla
charging technology upgrading, faster charging, charging time before is relatively
decreased by 30%, with only 20 minutes' amount in half, and a 60 KWH battery
version of the Tesla Model S full of electricity can range of 368 km. At the same time,
the charging rate is 20 times ordinary electric vehicle charging speed(recording from
www.qq.com, Technology Channel). In addition, Tesla was the first to take solar
charge of the company.
PART IV: DESCRIPTION OF TARGET MARKET
4.1 THE MARKETING REASERCH OF NEW ENERGY
AUTOMOBILE IN CHINA
In recent years, the market of new energy automobile has been kept on
expending intensely, and the concept of environmental protection has been
increasingly accepted by people in China.
The new energy automobile has been divided into three main parts: pure electric
vehicle(PEV), hybrid electric vehicle(HEV) and fuel cell electric vehicle(FCEV). In
year 2015, 0.379 million new energy automobiles have been manufactured in China ,
and 0.143 million of them are pure electric vehicle. The amount of PEV is about 2
times larger than what it was in the year 2014. In 2016, the number of new energy
automobiles manufactured in china is 0.517 million, including 0.417 million

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PEVs,which is 3 times of itwas in the year 2015. The vast expanding velocity of the
new energy automobile market in chinahas shown us a massive potential
opportunity which can not be ignored..
So, how about Tesla china? Does it also obtain enough profit in this
development?
4.2 THE MARKETING REASERCH OF TESLA IN CHINA
In the year 2014, Tesla had set the goal, reaching 10000 purchasing-amount. But
the data showed us that they only sold 2499 cars. In 2015, Tesla tried to challenge the
goal again but still failed. Consequently they cut down the objective amount to 5000
cars. According to the media, on January 26th, the CEO of Tesla revealed that in the
year 2016, although they cut down the expectation, they still didn’t reach the goal
eventually. (Lu, 2016)
To solve the problem of the floundering marketing in China, some experts
analyzed that even with some help from the government, the number of the chargers
still remains a huge problem. Nowadays, Tesla has built up 15 service organizations,
over 340 charging station and more than 1600 charging module in 7 main cities of
china. But this still much less than other competitive. (Lu,2016)
Regardless of these basic problems, I think Tesla also need to focus on the
characteristics of Target market, people’s attitude towards PEV and the target
consumers’ lifestyles and their ways of selecting automobiles.

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4.3 CITIZENS’ ATTITUDE TO PEV
By analyzing people’s attitude towards PEV in China, we may get more
inspiration of extending Tesla’s market in China.
On May 18th 2016, a researchcarried out by 21st Century Newspapertried to
figure out people’s attitude towards PEV in china. Now, the pollution problem, the
advanced technology and the positive policies are boosting the development of PEV.
Most of the interviewee were among 25 and 40 years-old. According to the following
two charts, more than 62% of the interviewees think highly of the future of PEV,
because of clean energy, advanced technology, government support and great success
around the world. And 60% of them are willing to buy PEV. There are five reasons
why they choose to buy PEV:
1. the environment has become one of the most important problems in China, 67%
of them consider that PEV will solve these problems to a great extent.
2. the government support, people who buy the PEV will get discount or some
other preferential policy, and this clearly illuminates that 55% of the customers will
buy PEV due to this reason.
3. PEV do not need to follow the limitations of regular car(due to the intense
traffic on weekdays, not all the vehicles are allowed on some arterial roads) and
therefore it will bring a lot of convenience to consumers.
4.31% of the interviewees think PEV has the lower using cost than the regular
car.
5. Buying PEV also becomes a fashion in recent years. On the other side, only 5%

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of the interviewees claimed that they refuse to buy PEV because of the inconvenience
of charging, lower efficiency comparing to internal combustion engine, the limitation
of battery’s lifetime and the hidden shortage of the new technology.(Angibi, 2016)
inconvenience of charging, lower efficient than internal combustion engine, the
life of the battery and the hidden danger of technology.(Angibi, 2016)
The research indicates that the driving experience of PEV, the performance of
62%
Yes
27%
Not
sure
11% No
People in China look foward to
PEV
1 2 3
70% environment problems
57% advanved technology
56% government strategic industry
44% new political policies
22% success in
overseas market
0 20 40 60 80
1
2
3
4
5
Reasons for people looking forward to PEV
0
50
100
1
2
34
5
Reasons for people
prefer to buy PEV
0
50
100
1
2
34
5
Reasons for people don't
wang to buy PEV

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battery volume, the convenience of charging comes first of the reasons for people to
make a decision. secondly is the appearance, decoration, configuration, cost and
after-sales service. Therefore rental PEV or test drive may be a better chance for
Tesla accessing to Chinese market. During the process of purchasing, 87% of
interviewees will think firstly of the car’s endurance and convenient of charging. But
the lack of charging devices is also the problem which limits the development of PEV
in Chinese market.
4.4 THE LIFESTYLE OF TARGET CONSUMERS IN CHINA
Across Asia, rising incomes are creating an enormous new class of consumers.
Much of that growth is coming from China, whose working population is larger than
those of the US and Europe combined. While the consuming power of the wealthy
Chinese grows much bigger than ever before,, their needs and preferences will have a
powerful influence to the global economy.
Today’s China consumer market is dominated by a relatively middle class. So
learn about types of Chinese consumer and our target consumer (middle class) seems
equally important to solving the basic problem.
The “average Chinese consumer” does not exist. China’s consumers can be
divided into four tiers: Movers&Shakers, Urban Middle, Urban Mass and Rural
Workers.
Movers&Shakers are Chinese wealthiest citizens who already made up a large
part of global demand for high-end goods. Their consuming patterns will continue to

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influence trends as the country grows. This group has only a small population of 1.4
million in China and their average annual income is about 0.5 million dollars.
Urban Middle, people used to call them the white-collar, is Chinese narrow
middle class. Nearly half of them are on the public payroll, so policies to increase
income will have a strong effect here. About 146 million people are in this stage and
their average annual income is 11773dollars.
The group, Urban Mass, blue-collar workers and migrant workers who have
moved to cities to find better-paying jobs—is expected to see the biggest rise in
income. This will allow them to broaden their spending beyond consumer staples.
More than 236 million people are in this level, the average income of them is 5858
dollars per year and with the rapid pace of the economic development, the number is
keep raising intensely every year.
Rural Workers: Half of China’s workers still live in rural areas. With lower
incomes and fewer available jobs, their spending is concentrated on essentials such as
food and housing. (China NBS, CNPolitics, Goldman Sachs Global Investment
Research.)
According to Chinese income stages and potential developmental space, It is
obviously that future growth will come from two key groups: the white-collar “Urban
Middle”, and the blue-collar “Urban Mass”. In addition, people among 25 to 40 of age
consists the largest population in China, and most of them are in the middle class, the
white-collar and the blue- collar of the society. So we prefer to focus on how people
in these level living in China. We will discuss their lifestyles in a few parts.

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Food and clothing consumed nearly half of all personal spending in China. As
disposable incomes rise, those consumption patterns are going to change. But
affordability will still be an issue, especially for the Urban Mass.
Only 4 percent of the Chinese population hold a passport, compared to 35
percent of Americans—but that 4 percent spends almost $200 billion overseas
annually, more than any other nation. Chinese urban middle class dominates tourism
spending, and it is expected that 12 percent of the population will hold a passport
within a decade.(Reed, 2016)
Chinese people spend an average 86 dollars a year on music-related activities.
Streaming services are used by 66 percent of Chinese consumers, and 71 percent of
more affluent ones. 57 percent of China's middle class enjoy live music.(Chang, 2016)
Online shopping in China accounts for 16 percent, or $672 billion, of all
spending — and about half of that takes place on mobile devices, according to a study
by E-Marketer, a market research company.(Chang 2016)
In 2013, China accounted for 35 percent of the world's total online shopping. By
2018, it is estimated that China's spending will exceed the rest of the world's
combined, and will account for one in every five yuan ever spent in
China. (Chang,2016)
Because of the largest population in the world and the increasingly intense traffic
problems,people prefer to seek a convenient living place, which means a comfortable
traffic with few traffic jam and not too far away to school or workplace. Therefore
beyond all doubt, they don’t need an expensive car. The purpose of owning a car is

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just for fast transportation.
After taking care of their basic needs, China’s consumers will be looking to their
futures: health, welfare and their chilren’s education. These concerns are especially
important for a country with an aging population.
China’s one-child policy results with most families having six adults taking care
of one child, forcing most of the people ages from 25 to 40 focusing on their children.
That’s fueling growth in education, housing and other sectors.
Beijing recently overtook New York as the “Billionaire Capital of the World” and
country-to-city migration is at its highest level in recent history. Compare to the USA,
the average Chinese consumer spends 7 dollars a day, still much less than American.
Therefore Tesla may open up a brand new way in term of Chinese lifestyles,extending
their market in China.
In a nutshell, due to the income level in China and Chinese lifestyles, it seems
advisable that Tesla regard the people from 25 to 40 year-old who are in the Urban
Middle and Urban Mass as their target market.
4.3 CITIZENS’ ATTITUDE TO PEV
By analyzing people’s attitude towards PEV in China, we may get more
inspiration of extending Tesla’s market in China.
On May 18th 2016, a researchcarried out by 21st Century Newspapertried to
figure out people’s attitude towards PEV in china. Now, the pollution problem, the
advanced technology and the positive policies are boosting the development of PEV.

23 / 50
Most of the interviewee were among 25 and 40 years-old. According to the following
two charts, more than 62% of the interviewees think highly of the future of PEV,
because of clean energy, advanced technology, government support and great success
around the world. And 60% of them are willing to buy PEV. There are five reasons
why they choose to buy PEV:
1. the environment has become one of the most important problems in China, 67%
of them consider that PEV will solve these problems to a great extent.
2. the government support, people who buy the PEV will get discount or some
other preferential policy, and this clearly illuminates that 55% of the customers will
buy PEV due to this reason.
3. PEV do not need to follow the limitations of regular car(due to the intense
traffic on weekdays, not all the vehicles are allowed on some arterial roads) and
therefore it will bring a lot of convenience to consumers.
4.31% of the interviewees think PEV has the lower using cost than the regular
car.
5. Buying PEV also becomes a fashion in recent years. On the other side, only 5%
of the interviewees claimed that they refuse to buy PEV because of the inconvenience
of charging, lower efficiency comparing to internal combustion engine, the limitation
of battery’s lifetime and the hidden shortage of the new technology.(Angibi, 2016)
inconvenience of charging, lower efficient than internal combustion engine, the
life of the battery and the hidden danger of technology.(Angibi, 2016)

24 / 50
The research indicates that the driving experience of PEV, the performance of
battery volume, the convenience of charging comes first of the reasons for people to
make a decision. secondly is the appearance, decoration, configuration, cost and
after-sales service. Therefore rental PEV or test drive may be a better chance for
Tesla accessing to Chinese market. During the process of purchasing, 87% of
interviewees will think firstly of the car’s endurance and convenient of charging. But
the lack of charging devices is also the problem which limits the development of PEV
62%
Yes
27%
Not
sure
11% No
People in China look foward to
PEV
1 2 3
70% environment problems
57% advanved technology
56% government strategic industry
44% new political policies
22% success in
overseas market
0 20 40 60 80
1
2
3
4
5
Reasons for people looking forward to PEV
0
50
100
1
2
34
5
Reasons for people
prefer to buy PEV
0
50
100
1
2
34
5
Reasons for people don't
wang to buy PEV

25 / 50
in Chinese market.
4.4 THE LIFESTYLE OF TARGET CONSUMERS IN CHINA
Across Asia, rising incomes are creating an enormous new class of consumers.
Much of that growth is coming from China, whose working population is larger than
those of the US and Europe combined. While the consuming power of the wealthy
Chinese grows much bigger than ever before,, their needs and preferences will have a
powerful influence to the global economy.
Today’s China consumer market is dominated by a relatively middle class. So
learn about types of Chinese consumer and our target consumer (middle class) seems
equally important to solving the basic problem.
The “average Chinese consumer” does not exist. China’s consumers can be
divided into four tiers: Movers&Shakers, Urban Middle, Urban Mass and Rural
Workers.
Movers&Shakers are Chinese wealthiest citizens who already made up a large
part of global demand for high-end goods. Their consuming patterns will continue to
influence trends as the country grows. This group has only a small population of 1.4
million in China and their average annual income is about 0.5 million dollars.
Urban Middle, people used to call them the white-collar, is Chinese narrow
middle class. Nearly half of them are on the public payroll, so policies to increase
income will have a strong effect here. About 146 million people are in this stage and

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their average annual income is 11773dollars.
The group, Urban Mass, blue-collar workers and migrant workers who have
moved to cities to find better-paying jobs—is expected to see the biggest rise in
income. This will allow them to broaden their spending beyond consumer staples.
More than 236 million people are in this level, the average income of them is 5858
dollars per year and with the rapid pace of the economic development, the number is
keep raising intensely every year.
Rural Workers: Half of China’s workers still live in rural areas. With lower
incomes and fewer available jobs, their spending is concentrated on essentials such as
food and housing. (China NBS, CNPolitics, Goldman Sachs Global Investment
Research.)
According to Chinese income stages and potential developmental space, It is
obviously that future growth will come from two key groups: the white-collar “Urban
Middle”, and the blue-collar “Urban Mass”. In addition, people among 25 to 40 of age
consists the largest population in China, and most of them are in the middle class, the
white-collar and the blue- collar of the society. So we prefer to focus on how people
in these level living in China. We will discuss their lifestyles in a few parts.
Food and clothing consumed nearly half of all personal spending in China. As
disposable incomes rise, those consumption patterns are going to change. But
affordability will still be an issue, especially for the Urban Mass.
Only 4 percent of the Chinese population hold a passport, compared to 35
percent of Americans—but that 4 percent spends almost $200 billion overseas

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annually, more than any other nation. Chinese urban middle class dominates tourism
spending, and it is expected that 12 percent of the population will hold a passport
within a decade.(Reed, 2016)
Chinese people spend an average 86 dollars a year on music-related activities.
Streaming services are used by 66 percent of Chinese consumers, and 71 percent of
more affluent ones. 57 percent of China's middle class enjoy live music.(Chang, 2016)
Online shopping in China accounts for 16 percent, or $672 billion, of all
spending — and about half of that takes place on mobile devices, according to a study
by E-Marketer, a market research company.(Chang 2016)
In 2013, China accounted for 35 percent of the world's total online shopping. By
2018, it is estimated that China's spending will exceed the rest of the world's
combined, and will account for one in every five yuan ever spent in
China. (Chang,2016)
Because of the largest population in the world and the increasingly intense traffic
problems,people prefer to seek a convenient living place, which means a comfortable
traffic with few traffic jam and not too far away to school or workplace. Therefore
beyond all doubt, they don’t need an expensive car. The purpose of owning a car is
just for fast transportation.
After taking care of their basic needs, China’s consumers will be looking to their
futures: health, welfare and their chilren’s education. These concerns are especially
important for a country with an aging population.
China’s one-child policy results with most families having six adults taking care

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of one child, forcing most of the people ages from 25 to 40 focusing on their children.
That’s fueling growth in education, housing and other sectors.
Beijing recently overtook New York as the “Billionaire Capital of the World” and
country-to-city migration is at its highest level in recent history. Compare to the USA,
the average Chinese consumer spends 7 dollars a day, still much less than American.
Therefore Tesla may open up a brand new way in term of Chinese lifestyles,
extending their market in China.
In a nutshell, due to the income level in China and Chinese lifestyles, it seems
advisable that Tesla regard the people from 25 to 40 year-old who are in the Urban
Middle and Urban Mass as their target market.
Part V: Analysis of Marketing Mix
5.1 PRODUCT
5.1.1 Original Concept of Tesla
In order to build the Brand of Tesla, understanding the purpose of Tesla is very
important. In 2006, Elon Musk the Co-Founder & CEO of Tesla Motors wrote an
article, and published on the Tesla’s blog. In the article, the initial product of Tesla
Motors is a high performance electric sports car named the Tesla Roadster. This car is
a first step to build the tesla’s brand in motors. It tells the world that the electric car
can do the same thing like Porsche or Ferrari do or even better. The seed of electric

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car was planted at that moment and it created the first impact to the motor market.
Elon Musk also mentioned “the long term plan is to build a wide range of models,
including affordably priced family cars” (Musk, 2006).
Elon Musk said several goals he wants to achieve in the future. Firstly, use the
money they made from sales of the sports can to build an affordable car or more
affordable car while providing the zero emission electric power generation
options.(Musk, 2016) Secondly, create stunning solar roofs with seamlessly integrated
battery storage.(Musk, 2016). Thirdly, expand the electric vehicle product lie in to
satisfy the needs from different market segments.(Musk, 2016). Fourthly, “Develop a
self-driving capability that is 10 times safer than manual via massive fleet learning”
(Musk 2016). These goals are the signals implied the Tesla is focusing the new energy
service –combination of electric and solar. Tesla is trying to develop the new
technology to revolute the situation of sustainable cars and sustainable energy, which
is trying to use the electric and solar to replace or reduce the requirement of gas and
patrol. In this project, the car market would be the target of Tesla as tesla knows that
electric power would be the widely used in motors to replace the gasoline in the
future.
5.1.2 What Tesla Did to Build Its Brand?
Actually, Tesla let others do the talk for itself, instead of paying any
advertisements. In 2006, Building the sports car roadster to beat a gasoline sports car
really attracts the people. Since 2008, Tesla provide its products from roadster to

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model S and Model X, The price is getting low from luxury sports car then trend to
family cars, in order to make the car could be affordable by normal income families,
the Model 3 is coming soon(2017).
Tesla is contributing to offer the best experiences to the customers. The official
website is a social platform which customers can express their opinion to the company,
so the Tesla Company is able to identify the needs of customers. It is a
communication between the company and customers, which brings the better services
experience.
For offering the affordable car to each family, Tesla defines their target market as
thigh income people at the beginning and trend to low price market later(Musk,2016).
In order to reduce the cost, firstly, the super manufactories are in the plan of Tesla
(Musk,2016). Secondly, currently the Tesla is doing its trade online in china market,
which also reduces the cost by eliminating agent or building the 4S store (Musk,2016).
Tesla also locates their flagship stores near the large retail brands such as big
shopping center or BWM stores. However, in China, only one shop established in
Beijing and others are the shop provider the experience only. This action means Tesla
wants to let the customers feel the Tesla first instead of opening the shop.
5.1.3 Brand Image
Tesla is more than a car, it stands for good taste, avant-garde, fashion and
revolution. Tesla is focusing on building a great customer experience by an affordable
electric car.

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In my opinion, because the electric car is so special now in the existing market,
this factor has made Tesla itself wide known in the world, which means there are no
major advertising campaigns, and non-aid celebrity endorsements. As tesla bring the
great experience to customers, the customers themselves share the original content on
the third social media, which brings better effect and no cost as the successful
advertising.
5.2 Price Points
5.2.1 Existing Products andPrice Points
Now, Tesla has updated three types of car for selling on their official website of
china. These three types are Model X, Model S, and Model 3. From my perspective,
consider the exchange rate of Chinese Yuan and American dollar, and based on the
research of Chinese market, the price of best sale is located where it between 45,000
$ to 70,000 $ .Though the Model 3 is satisfied this price section, it is not that
attractive as an SUV. In addition, it has not coming yet until the beginning of 2018.
Tesla is working on the solar roof, power-wall and power-pack, not for selling in
China(2017) .These three energy sets are not suitable for modern city filled with full
of people, the amount existing apartments in china is much more than houses. Hence
our team is going to focus on the motor market of China.
Price points
Table 3

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The price of Model S in Chinese market
Type kWh Wheel Drive KM $
Model S
60
Rear Wheel Drive 400 109,400
All-Wheel Drive 408 116,300
75
Rear Wheel Drive 480 118,400
90 All-Wheel Drive 557 136,900
100
ALL-W-D Maximum
Performance
613
195,900
Notice :the table 1 shows the price of Model S in Chinese market ,The model 3
has rear-wheel drive type and all-wheel drive type ,the price is from100,000$ to
150,000$.It depends on the battery capacity. If the customer requires the powerful
speed acceleration, the 100 kWh batteries with All –W-D maximum performance is
about 200,000$.
Table 4

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The price of Model X SUV in Chinese market
Type kWh Wheel Drive KM $
Model X
75
All Wheel D
Rive
417 133,900
90 489 148,300
100
565 152,600
ALL-W-D Maximum
Performance
542 205,800
Notice: the table 2 is showing the price of the Model X SUV from Tesla, the price is
about 1milion Chinese Yuan .And the model 3 is coming soon at the end of 2017, the
price would be around 35,000$.
5.2.2 Reseaonal price (Performance Convey the Value,
Experience the Future)
5.2.2.1 Electric Capacity & charging speed
Tesla‘s battery provides better cruising ability which keeps the driving range at
least more than 400KM. It is three times more or four times more than the similar
electric cars, compared to BMW i3, Ford, Benz B-class Electric Drive and KIA Soul
EV(2017).

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Battery charging rate is about 20 times faster than normal electric vehicles
charging speed.
5.2.2.2 Powerful Acceleration
Tesla's Model S P100D is the fastest accelerating production car in the world, the
Model S P100D hit 0-60 mph in 2.275507139 seconds using All-Wheel Drive Dual
Motor, pairing the high performance rear motor with a high efficiency front
motor .This new mode called Ludicrous+.（Musk,2017）
For the Model 3, it is able to achieve 345 Km of range per charge while the
price is only starting at $ 35,000. The acceleration from 0 to 100 km/h is under 6
seconds, which is faster than most of traditional cars that the price is more than$ 35,000
(2017).
5.2.2.3 Adaptive Lighting
“Tesla now features full LED adaptive headlamps. Besides enhancing the
already great styling, they also boost safety: 14 three-position LED dynamic turning
lights improve visibility at night, especially on winding roads”(2017).
5.2.2.4 Bio-Weapon Defense Mode
“This mode highlights the sustainability and healthy life.” Tesla now features a
Medical grade HEPA air filtration system, which removes at least 99.97% of
particulate exhaust pollution and effectively all allergens, bacteria and other

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contaminants from cabin air. The bioweapon defense mode creates positive pressure
inside the cabin to protect occupants” (2017).
In order to provide better diving experience and entertaining, each tesla car has a
large touchscreen .it includes the Media-AM/FM/HD radio, online radio, on-demand
Internet radio, Bluetooth In addition, it replaces the traditional Control system by
touchscreen; it provides Controls-Driving personalization, climate controls, and cabin
controls. For safety part, the tesla shows the vision from Camera-High definition
backup camera by touchscreen. The interesting thing is that the customer enables to
check the Energy-Real time energy consumption and range estimation. This could
offer a personal driving style by estimating the energy consumption. Of course, the
Phone-Bluetooth-enabled and voice-controlled hands free phone systems are provided
(2017).
5.2.2.6 Fancy Storage
There are two trunks in Tesla, one is at the front, and the other one is at the back.
This offer more storing space. Because there is no gas engine like traditional car does.
5.2.3 Car Positioning for Chinese market
As our group determine the target market is the 25- 40 year-old people ,
affordable price is from 45,000 $ to 70,000 $. In order to keep the brand image
staying luxury, the final price point decided is around 50,000$. In the other words, the
Model 3 would be the most appropriate option for china-market at the moment.

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However, there is a restriction of model 3.Obviously; the tesla cut the power capacity
of model 3, in order to reduce the price of it.
Now we have model S and model X two types of luxury cars, and one model 3
for affordable car. But there are some price space for the Model C(CHINA) which the
price interval is between 70,000 $ to 800,00$. The latent market for Model C is huge,
as china is a developing country .Chinese people likes to comparison, therefore to
satisfy the Chinese people’s vanity is the key to catch the customers. People will
compare Model C and Model 3, and people like the product named after legend,
dragon or themselves, C is stand for china. Like iPhone 5s, acquired a huge sale in
china because of the color gold.
5.3 Place
5.3.1 What is Place
We called Place as distribution channel, which refers to the sum of all aspects
of conveying products from enterprises to the consumers.
5.3.2 Main channels to open up the Chinese market
Use the way of combining experiential marketing and e-commerce sales, and
to promote to the second and third tier cities at the same time.
One way is to open direct experience store. Different from the traditional
dealer network, Tesla uses experience store sales model like Apple's. These
experience stores directly managed by Tesla, and have nothing to do with distributors.

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In Tesla's experience stores, customers only need to pay a $500 deposit, to experience
the door-to-door service. This will not only reduce the cost of purchasing, but also
bring unprecedented convenience to customers. Tesla plans to open 25 experience
stores all over the world in 2013. Tesla opened the first direct experience store in
Beijing on November 4th, 2013.
Another way is to create E-commerce channel. Tesla was the first brand
relies on Internet sales among all sorts of sales models. This will pose a challenge to
the traditional Chinese automobile marketing mode. Now in China, automotive
industry, along with the new energy vehicles, relying heavily on 4S stores as the main
direct sales model. After entered the automotive market Tesla may have an impact
with the China's existing marketing model.
The last way is to develop the second and third tier city market. Promoting to
the second and third tier cities is based on the particularity of Chinese consumer
groups. Low-end consumer groups are China's largest consumer groups. Although the
label of Tesla is a Luxury Coupe, However, in order to adapt to China's consumer
market, Tesla needs to promote to the second and third tier cities of China in several
ways. First we need to create a new model of lower price, like recently released
Model 3, collect the opinions of the Chinese market on this new model, then products
and services accordingly. Secondly, build charging stations in the main sections of the
second and third tier cities, and build Tesla's 4S store next to them. Add Tesla
advertising boards near highway and gas station. Communicate and cooperate with
new media to provide educational guidance to consumers. For example, create a

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media open day. Invite all the media and city residents to demonstrate auto
disassembly and reorganization, the working components inside the car, and explain
the working mechanism to them. The guidance of education should be a long process.
After that, numerous charge piles should be put into the residential quarters, ski
resorts, restaurants, hotels, where people usually stays. When the owner returned to
the car, the car will be ready to go. We can cooperate with Minsheng Bank, Crowne
Plaza Hotel, Verma Sam club, Hang Lung Properties and various high-end hotels and
tourist resorts to build Tesla public charging network. Last, build fancy center of
science and technology in these cities, with Tesla electric power development history
and auto parts show inside. The center will make people feel the charm of power of
science and technology.
5.4 Promotion
5.4.1Advertising promotion
In create Advertising promotion by using television advertising, news paper,
electronic platform App, social software, official website, and by providing
sponsorship. The first one is created by television advertising and news papers. Car
makers spend hundreds of millions of dollars every year to promote their products. A
new report from Global Equities Research analyzes just how much each car company
actually spends on selling its cars. Not surprisingly, makers of premium brands spend
the most.

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The table above shows Ad dollars per car sold from Global Equities. As we
can see in the table, Tesla spent $6 of ad per vehicle for the product but generate more
than $8 Billion in revenues and more than $14 Billion in bookings. Tesla almost never
put any ads in America, because of the benefit could bring from ads can be brought by
musk himself. We could say that it is merely Musk himself that could helping launch
a million vehicles. Tesla’s capital investment is used to lay down the foundation for
tomorrow’s success. Till Feb. 2016, the official website announced the first promotion
video of Model S. for its automatic driving technology(Global Equities, 2016).
Tesla in China also adhering to the idea of not advertising, however we think
advertising is still necessary in Chinese market. Even though the influence of Musk is
enough to cover all over the world, but he is still a new face for many Chinese people.
Many consumers don't know much about Tesla and its technology of electrical power,
and even lots of Chinese people have never heard of Tesla brand.
The second one of Advertising promotion is by using Electronic platform
App. Tesla develop a unique information system and e-commerce platform according

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to its own characteristics. Tesla officially launched Tesla Motors App, This program
contains all the product introductions, direct outlets, and after-sales contact. At the
same time convenient Tesla owners communicate directly with the car anytime and
anywhere by enhance the user experience from many subtle aspects, such as checking
the charging situation, positioning and tracking vehicles, set autopilot function calls of
vehicles, etc..
In China, Tesla could cooperate with China's large B2B platform, such as
1688.com, HC360.com, 86mai.com, to open Chinese online B2B channels. Internet
marketing model allows Tesla to more widely integrated supply chain and expand
sales channels. Tesla concept cars using the Internet thinking to promote technological
innovation of electric vehicles, and at the same time make it easier for customers to
contact with Tesla, so that making Tesla more clear about the needs of customers, then
making the product (or service) and information customized and personalized.
The third one of Advertising promotion is by using social software. Tesla
released a sharing of its electric car patent through Twitter, which set off a wave of
patent opening in the world. With this patent boom, the country's major media
platforms made a free ad for Tesla, has attracted numerous consumers' attention.
In China, WeChat business is a new type of e-business based on WeChat
mobile ecosystem and social integration. It can be divided into two parts: B2C, which
is WeChat subscription and C2C, which is WeChat friends circle. Tesla could promote
through WeChat B2C business.
The fourth one of Advertising promotion is by using Official website. The

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official website offers a full range of models. The Tesla homepage constantly update
and promote the latest automotive products and energy power products every. In
China, Tesla also has official website, www.tesla.cn. There are detailed introductions
for each series on official the website. And also test drive appointment and vehicle
orders can be completed on the official website.
In order to develop the Chinese market, we could implant Tesla's official
website in China's major mainstream information platform, such as news.cn,
chinanews.com, and ifeng.com, campus network platform, such as campus.qq.com,
renren.com, and 0xiao.com, and online vehicle trading platform, such as che168.com,
chevip.com. Different from Native American effects, the implantation of these
mainstream sites will undoubtedly bring more hits to Tesla China where few people
know about Musk. The sales and public awareness of Musk and Tesla will increase a
lot by doing this.
The fourth one of Advertising promotion is by providing sponsorship. In
China we can provide sponsorships to some famous activities, like football
sponsorship, basketball sponsorship. It will attract humorous potential consumers to
advertise for these competitions.
5.4.2 Personal selling
Tesla uses experience store sales model like Apple's. These experience stores
directly managed by Tesla, and have nothing to do with distributors. We can create
more in Chinese market, like provide free charging pile installation service, gift every

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new orders and new car owners a portable charger. We could also carry out the
replacement of second-hand car business in some second-tier cities like Chengdu.
Using the double eleven festival of China to carry out direct sales promotion, like new
buyers will get free replacement mini car wiper, and five times free recharge card, and
10,000 km free maintenance. Purchasing power should be very high at this festival.
5.4. 3 Public Relations
Although Tesla Motors has no advertising department, nor an ad team, and
certainly, no Chief Marketing Officer (CMO), spokeswoman Alexis Georgeson, who
is the closest to a PR person in the company says:
“Right now, the stores are our advertising. We’re very confident we can sell
20,000-plus cars a year—without paid advertising. It may be something we’ll do years
down the road. But it’s certainly not something we feel is crucial for sales right now.”
(Alexis Georgeson, 2013)
One thing Tesla does well with a minimum cash flow is to create a buzz.
Without spending any money on direct advertising campaigns, Elon Musk and the
creative minds behind the company know how to generate buzz, and in this modern
age, that means using social media. A campaign a’la Apple would make sense.
As an famous figure, Tesla's soul character Musk received a lot of attention
from fans and media. Mask himself active in Tesla's blog, Twitter, YouTube interview
all the year round. As a celebrity, Musk's every move could be a kind of invisible sales
of Tesla products.

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Tesla seize 3 points for celebrity promotion. Firstly, The car's brand name
does not like Mercedes Benz, Ford, which build from the founder, instead, Tesla was
named after the great physicist and inventor, Tesla. Secondly, In Tesla's customer list,
there are film stars like Brad Pitt, George Bruni, Schwarzenegger, and also business
leaders like Larry Page and Sergey Brin. These people have huge wealth and noble
status of celebrities showing their favorite to Tesla will greatly increase the brand
awareness and social concern, and plays a very positive role in the construction of
brand image. Thirdly, In reality, Tesla founder, Ellen Musk, is the prototype of "Iron
Man". Tesla electric car company leading by Musk is on behalf of the future direction
of the development of high-tech companies. The global hit movie series of "Iron
Man" make a good publicity for the Tesla company. The celebrity generally have high
visibility and reputation, and specific personality charm, who plays an unparalleled
role for the promotion of enterprise products and image. Fans love, trust and even
imitate to celebrities, as a result, which will make them love, trust and imitate the
product which celebrities used. So this can also help corporate gather many fans who
are likely to be the potential consumers.
In this case, when Tesla enter the Chinese market, we can invite Chinese
celebrities like CEOs from Millet, 360, CISCO, and BBK group. Tesla can also hire
film stars, like Jacky Chen, Lau Tak Wah, Zhonglei Wang, the CEO of Huayi Brothers
Media Group for the new car advertising. At last, we need to build good relationships
with environmental organizations in China, like China Environmental Protection
Association, to make Tesla establish a good image of environmental care. In China,

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the government has great influence on the development of enterprises. Get the
government, half the success. So PR of Tesla also need to try to build strong
relationships with the government, especially for whom in second and third tier cities.
This requires numbers of PR with strong social networking sites in China.
PART VI: STRENGTHS, WEAKNESSES AND
RECOMMENDATIONS
6.1 Strengths
6.1.1 New Selling Approach
According to marketing channels, both China and Tesla car producers choosing
selling mode generally rely on car dealers. However, Tesla has tried to avoid this
traditional approach, bypass the dealer, open stores and service centers by their own
in downtown. Self direct selling mode is one of their strengths. At present, Tesla has
a number of direct sales stores in the United States. Perhaps this way is extremely
successful in the past, making Elon Musk believed and expressed his proud all over
the world.

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6.1.2 Environment Friendly
Due to the green technology, the US federal government and state governments
strongly recommended these new energy incentives and provided considerable
subsidies. Also, there are preferential policies for the use of new energy products
end-customers. Tesla was blessed by governments and earned its high return. Turn to
China, Chinese government highly recommended and support this new environment
friendly industry as well.
6.1.3 Advanced Technology— Auto Control system
The auto-control system marks how special Tesla is. It made Tesla became a
product of advanced technology, meanwhile, it attracted the elites and wealthy
people’s attention. Tesla used to be a tool for people showing them off in front of
others.
6.2 Weaknesses
6.2.1 competing low-end car marketing
Though, the direct selling ways brought Tesla great marketing and selling
performances in the United States. However, in China, the experience stores and
service centers only have opened within six domestic cities. This model didn’t
guarantee the user experience and made the Tesla less vulnerable to decentralization
from user’s feedback.
As the shortcomings of this model are also very obvious, because not only direct

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selling, Tesla has to compete with traditional dealers, distributor’s customer service
makes the sales and post-sales became very demanding, costly. They also have to
accept slow sales network expansions. It brought many obstacles being a single sales
mode seller. In China, if Tesla does not seek cooperation, either open joint ventures,
or giving up their own direct sales mode (monopoly charging every niche market and
other locations), they will probably fall into difficulties and hard to survive in China's
low-end car market. Currently, the most difficulty for Tesla is facing and competing
low-end car marketing promotions.
6.2.2 Poor energy infrastructure
There is a fear that the poor infrastructure will be another obstacle to the
development of Tesla in China. However, from my personal prospective, I believe
that this fear will no longer exist within a few years. May be a few years later,
charging piles and power stations could be seen everywhere.
6.2.3 Long manufacturing period
From the customers feedback, I have known that, normally, customers had two
wait long time, such as three months to get their new car. This is a huge problem we
have to solve it in the near future.
Due to policy constraints, Tesla can not easily get the necessary land for the
construction of the charging stations, in addition, Tesla didn’t get along with the
national electricity cooperation of China. This led at the end of November of 2014,

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Tesla in China has only owned less than 50 power stations, and however the power
station in the United States was over 120 in 2016.
6.3 Recommendations
6.3.1 Targeting in Low-end market
Recommended Tesla lower down its profile, repositioning its target market and
cooperating with the domestic producers, lower down the producing costs and make
the products price fit for Chinese middle class. Once consider the localization
strategy, take more attention of Chinese consumers’ demands, such as parking spaces,
garages. China market will immediately usher in the era of its large-scale electric
vehicles popularization.
6.3.2 Speeding up installing Charging infrastructures
Recommended Tesla hired some senior managers who are get along with
Chinese governments and having network with electricity bureaus. Once, Tesla has
the permissions to own land to set up power stations and building up power piles
spread majority cities, Chinese customers will easy to accept electric cars as their
primary transportation tools. That will solve the sense of insecure of crowds. The fear
of insufficient infrastructure will not be an obstacle to the development of Tesla in the
country.

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6.3.3 Setting up and cooperating withlocal factories
As we know that, Tesla products are expensive. Based on the research from my
team members, I would have summarized and recommended Tesla cooperating with
domestic companies and cut down the costs, mean well, be a wise investor, invested
local factories. Once Tesla set up its join factories, they would be able to let down the
costs..
6.3.4 DecentralizedAuthority n
As we have known from News, Tesla’s headquarter seems do not trust Tesla
China. They seem to be two different companies. The former is a successful model in
their strategic system, while the latter lack of experience, it’s impossible for Tesla
China changing overnight. Tesla should give Tesla China enough spaces to develop
and decide their localizational marketing strategies. Since, China market has great
differences with American market. Decision autonomy in proper way will help Tesla
China growing faster.
Part VII. References
1.Japan Automobile Manufacturers Association, The picture about prevalence of
automobiles in some main countries2012
2.Musxh, China road transport online, Vehicle ownership of China in 2015
2016-02-19

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3.Xiaoliu Zheng, http://www.wtoutiao.com/, Motor vehicle ownership for everyone in
every country(or area) 2016-09-03
4.Zhichao E、Ming Dou, www.people.com , Automotive Channel, Vehicle ownership
of China in 2015 has been to a new record, there are 31 in per 100 families Defender
of Leningrad, www.sohu.com, Automotive Channel , Review the sales ranking of the
new energy cars in America in 2015 , 2015-12-29
5.Yichuidingyin, www.sohu.com , Automotive Channel, Tesla was still unaccustomed
to the climate of a new place in China, 2016-04-06
6.Zhongshangqingbaowang, www.askci.com, The confluence of the new policies for
the new energy cars in China in 2015 2015-12-24
7.Yue Jun, www.xnyauto.com, The channel of policy and law 2017-02-20
8.Huppert Yang, www.qq.com, Technology Channel, Truising ability of Tesla can KO
its competitors 2015-09-29
9.Alexis Georgeson, (June 10, 2013). Tesla Generates Small Sales, Big Buzz Without
Paid Ads. Retrieved from
10.http://adage.com/article/news/tesla-generates-small-sales-big-buzz-paid-ads/24199
4/
11.Global Equities, (July 9, 2016). Tesla spends just $6 per car in advertising.
12.Retrieved from http://www.teslarati.com/tesla-spends-just-6-per-car-advertising/
13.Alexis Georgeson, (June 10, 2013). Tesla Generates Small Sales, Big Buzz
Without Paid Ads. Retrieved from
14.http://adage.com/article/news/tesla-generates-small-sales-big-buzz-paid-ads/24199

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15.Global Equities, (July 9, 2016). Tesla spends just $6 per car in advertising.
16.Retrieved from http://www.teslarati.com/tesla-spends-just-6-per-car-advertising/

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