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Competitive Analysis of Tesla Motors

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Presentation on theme: "Competitive Analysis of Tesla Motors"— Presentation transcript:

1 Competitive Analysis of Tesla Motors

2 Outline Outline Introduction Case for the Electric Car
Internal Rivalry Barriers to entry Substitutes and complements Supplier Power Buyer Power Strategy Outline

3 Tesla Motors 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

4 Industry Facts Industry Facts
Transportation accounts for 63% of Oil Demand

5 Industry Facts Industry Facts

6 Industry Facts Industry Facts
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. Change title: Industry Facts

7 Industry Facts 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

8 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.

9 Efficiency vs. Performance
Tesla Motors

10 Internal Rivalry 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

11 Internal Rivalry GM EV1 – Early Electric

12 Internal Rivalry Honda Insight – Early Hybrid

13 Internal Rivalry Toyota Prius - Hybrid

14 Internal Rivalry Tesla Roadster - Electric

15 Internal Rivalry Venturi Fetish - Electric

16 Entry Barriers to Entry Economies of Scale Regulation Issues
Technological Innovations Brand Loyalty Infrastructure Entry Tesla has an advanteage because it doesn’t have to have volume

17 Substitutes Substitutes Hybrids Flex Fuel Hydrogen Diesel
Compressed Natural Gas Mass Transportation

18 Energy Efficiency Energy Efficiency

19 Energy Efficiency Energy Efficiency

20 Complements 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

21 Supplier Power 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

22 Buyer Power Buyer Power
Ability of buyer to extract profits from seller Green market is emerging Buyer power is limited due to lack of competition

23 Buyer Power Buyer Power Implementation Phase Vehicle Technology
Market Competitive vehicle Penetration across new vehicle production Major Penetration Total Time for impact Turbocharged Gasoline Engines 5 years 10 years 20 years Low Emission Diesel 15 years 10-15 years 30 years Gasoline Hybrid 35 years Hydrogen Cell Hybrid 25 years 55 years

24 Conclusion Conclusion Short to medium term strategy Sell 100 Roadsters
Create recognizable product Self funding of future expansion plans Change opinion of electric vehicles

25 Conclusion Conclusion Long term strategy Focus on brand recognition
Cost optimization Compete in mass market Build infrastructure

26 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. You’re buying a car that is not as good as an equivalent gas car at all—slower, uglier, with not as much range—and they’re trying to compete essentially on price, where they can’t win. None of those cars were built for people who really like to drive. I get the feeling they’re for people who don’t 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, it’s much more likely for you to succeed. And I think our investors agree.”

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