Presentation on theme: "Competitive Analysis of Tesla Motors. Outline 1.Introduction 2.Case for the Electric Car 3.Internal Rivalry 4.Barriers to entry 5.Substitutes and complements."— Presentation transcript:
Competitive Analysis of Tesla Motors
Outline 1.Introduction 2.Case for the Electric Car 3.Internal Rivalry 4.Barriers to entry 5.Substitutes and complements 6.Supplier Power 7.Buyer Power 8.Strategy
Tesla Motors California based start-up company Developed a high performance electric sports car Initial funding ($60m) provided by PayPal, eBay and Google Founders Car does 0-60 mph in about 4 seconds Car can travel 250 miles between charges First 100 vehicles have been sold at the asking price of $100k
Industry Facts Transportation accounts for 63% of Oil Demand
Daily use of Petroleum worldwide. At present, consumers used 80 million barrels a day (MBD) of petroleum (each barrel contains 42 US gallons). Two thirds goes to transportation 53 MBD for transportation overall 29 MBD for transport for people 19 MBD for transport for freight 5 MBD for air transportation for people and freight.
Industry Facts US Automobile Industry represents 5% of Private sector GDP 76% of the market is made up of Ford, GM and Chrysler 18% of sales are from Japanese car makers 6.6m Americans are directly or indirectly employed in the automotive industry. Hybrid sales represented 1.2% of the market in 2005, 1.6% in 2006 (est). Forecasts estimate 5% of car sales will be hybrids by 2013
Market Definition Case for the Electric Car Environmental friendliness and low emissions High performance Improved battery technologies and driving range Electric cars are more energy efficient than gasoline cars.
Tesla Motors Efficiency vs. Performance
Internal Rivalry A green vehicle: Reduces consumption of petroleum Uses renewable energy sources Has Low emissions Is Fuel efficient Within the green vehicle market there are four types: Electric Vehicles Flexible-Fuel Vehicles Hydrogen Vehicles Hybrid Vehicles Internal Rivalry
GM EV1 – Early Electric
Internal Rivalry Honda Insight – Early Hybrid
Internal Rivalry Toyota Prius - Hybrid
Internal Rivalry Tesla Roadster - Electric
Internal Rivalry Venturi Fetish - Electric
Entry Barriers to Entry Economies of Scale Regulation Issues Technological Innovations Brand Loyalty Infrastructure
Substitutes Hybrids Flex Fuel Hydrogen Diesel Compressed Natural Gas Mass Transportation Substitutes
Complements Government tax breaks Utility incentive programs Free Parking at Airports Single Occupancy use of carpool lanes No parking meter fees 50% discount by California utilities for changing electric cars
Supplier Power Lotus main outsourcing partner Lotus is providing chassis, body and building Tesla Roadster at Lotus factory in England AC Propulsion drive train Lithium Ion battery Flexibility to adopt new technologies Supplier Power
Buyer Power Ability of buyer to extract profits from seller Green market is emerging Buyer power is limited due to lack of competition
Buyer Power Implementation Phase Vehicle Technology Market Competiti ve vehicle Penetration across new vehicle production Major Penetration Total Time for impact Turbocharged Gasoline Engines 5 years10 years 20 years Low Emission Diesel 5 years15 years10-15 years30 years Gasoline Hybrid5 years20 years10-15 years35 years Hydrogen Cell Hybrid 15 years25 years20 years55 years
Conclusion Short to medium term strategy Sell 100 Roadsters Create recognizable product Self funding of future expansion plans Change opinion of electric vehicles
Conclusion Long term strategy Focus on brand recognition Cost optimization Compete in mass market Build infrastructure
Conclusion Martin Eberhard, CEO There have been tons and tons of companies, for the last 40 years that have tried to make little commuter electric cars. The trouble is that, for the most part, it requires the buyer of such a car to change his or her nature. Youre buying a car that is not as good as an equivalent gas car at allslower, uglier, with not as much rangeand theyre trying to compete essentially on price, where they cant win. None of those cars were built for people who really like to drive. I get the feeling theyre for people who dont really think you should be driving, but think if you do have to drive, it should be an electric car. I think if you build a car for people as they are, not requiring them to change their nature, its much more likely for you to succeed. And I think our investors agree.