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Situation Analysis ___________________________________
Tesla Motors, Inc. Situation Analysis 2
Contents
Situation Analysis
o Company Analysis…………………………………………..…………… 3
o Consumer Analysis……………………………..…………………… 3
o Marketing Analysis……………………..…………………… 4-‐8
o Product Analysis…………………………………………… 8
o Competitive Analysis………………………..………………………….……….. 9-‐10
References……………………………..………………………………… 11-‐12
Tesla Motors, Inc. Situation Analysis 3
Company Analysis
Tesla Motors, Inc. was founded in 2003 in the Silicon Valley area. Silicon Valley engineers
grouped together to prove that electric vehicles could change the world. Martin Eberhard and Marc
Tarpenning founded Tesla Motors, however current CEO Elon Musk led the first investment round in
2004. The company remained in stealth mode until July of 2006. During 2006, Tesla revealed its first
production car, the Roadster. Tesla Motors is an American company that designs, constructs and sells
electric cars.
Consumer Analysis
Tesla Motors won a, near, perfect score in an annual owner-satisfaction survey for its
Model S. A year after Tesla Model S was introduced; it got the highest marks in owner
satisfaction in latest annual auto survey. Last spring, the Model S earned a road-test score of 99
on their 100-point scale, making it the highest-rated car they’ve tested in the last five years.
“Tesla has helped transform the popular image of electric cars… to something that can be
fun and luxurious and packed with cutting-edge technology,” (Garthwaite, 2013). There is plenty
of buzz in the media concerning the Model X, high expectations have been set for the new
product and must live up to the expectations. “This is the car to get Tesla off government life
support and marketplace profitability, for a couple of very simple reasons: It was built on the
Model S sedan platform, it’s a seven-passenger SUV that doesn’t look like one and has genuine
eco-cred,” (Motavalli, 2012).
Tesla Motors, Inc. Situation Analysis 4
Marketing Analysis
Market Segmentation
Demographics
According to the United States Environment Protection Agency, the consumer
segmentation based on demographics included the following attributes: higher-than-average-
income ($114k), Urban or suburban residence, private garage with electric power, low weekly
mileage (100 miles), environmental sensitivity, concern about dependence on foreign oil,
political activity, and willingness to pay for convenience. In addition to the EPA’s consumer
profile, the U.S. Department of Energy also collected data that considerably resembles the
demographics from EPA research. The DOE info graphic below illustrates the some the income
aspect of EV owners. According to this data, the basic Tesla market segmentation should consist
of; 40-60 and preferably have an income of more than $100,000.
Tesla Motors, Inc. Situation Analysis 5
Geographic
In terms of EV geographic information, the Seattle Times has reported top markets for
EV sales from largest to smallest are as follows; San Francisco, Los Angeles, Seattle, New York,
and Atlanta. Together these metros comprise fifty-two percent of the U.S. EV market. As the
figure below suggest, the target consumer is more likely to come from an urban area or large
city.
Tesla Motors, Inc. Situation Analysis 6
Psychographic
With the demographic profile of EV owners, probable Tesla consumers could be identified as:
Early Adopters/Tech Savvy Individuals
• Similar to early hybrid owners
• Those interested is environmental best practices
• Educated; four-year degree or higher
• Value conscious; owners of EV’s want an EV that can compete with gas-powered
competition on price, quality, and performance. Interested in an EV that can go long
distance with proficient performance.
Market Needs
The main problems within the Tesla Motor consumer market, revolves around showing
the general public that EV’s are more valuable than gas-powered vehicles. In concern to EV
competition, the Tesla Model S, will out-accelerate any electric powered vehicle. In 2013,
Technology Review reported that the Tesla Model S has been outselling both Nissan Leaf and
the GM Volt- regardless of the fact that it cost twice as much. This leads to the Market Growth
According to market information from WSJ Market Watch, Tesla Motors will
successfully grow into a mass producer of EV’s by 2020. The image below is a NASDAQ
Analyst Forecast of Tesla Motor, Inc
• Obvious underlying need of lower production cost so that Tesla motors can compete with
EV market prices.
Tesla Motors, Inc. Situation Analysis 7
Market Growth
According to market information from WSJ Market Watch, Tesla Motors will
successfully grow into a mass producer of EV’s by 2020. The image below is a NASDAQ
Analyst Forecast of Tesla Motor, Inc.
Market Competition
In 2013, the WSJ reported that top competitors that Tesla Motors will face including the
following: BMW, Cadillac, Volkswagen, Porsche, and Audi.
Tesla Motors, Inc. Situation Analysis 8
Market Trends
According to the blog, Scientific American, Motor Trend named the Tesla Model S the
2013 car of the year. The first time an EV has ever won. Overall, current EV market trends
evident through research only benefit Tesla. Although the company faces competition, they are
at an advantage from production and sales of power trains and battery packs to other auto
manufactures.
Product Analysis
The Tesla Model X not only sports luxury, but also utility and efficiency. This SUV has
the lowest center of gravity allowing it to switch lanes, turn and make sudden moves safely and
securely with all seven passengers in the car. The Model X is built with duel motor all-wheel
drive, upping the torque to 50 percent, and enabling the car to reach 0 to 60 miles per hour in five
seconds. The ability to maneuver safely, quickly, efficiently and in style appeals to men and
women between the ages of 30 and 45 years old, with children, looking to protect their wallet as
well as the environment.
Though style typically ranks lower when considering safety, the Model X sports both
style and performance well. The falcon wing doors will not only turn heads, but are also perfect
for the tightest of spots. These doors open up and out of the way, providing better parking
options and an easily accessible entry into the car. The ability to slide the second row of seating
also helps passengers enter the vehicle. Small children and adults will no longer need to climb
into the car or fight over the passenger’s seat because the second and third rows are just as
comfortable and accessible as the front.
Tesla Motors, Inc. Situation Analysis 9
The Tesla Model X comes complete with a futuristic Tesla Touch screen allowing drivers
to access any information or entertainment needs on the road. The Model X is perfect for
consumers dreaming of owning an SUV due to the money they will save at the pump. The Model
X does not use any gasoline, and is powered by a 60 or 85 kWh battery. Consumers will save
money in the long wrong when switching to Tesla.
Competitive Analysis
2014 will be a breakthrough year for Tesla Motors. Currently, Tesla vehicles can be
found in small numbers throughout the major American markets, and some overseas particularly
in China. Tesla Co-Founder and CEO, Elon Musk, has launched Tesla gaining spectacular media
coverage and notice from a specific clientele. So far, Tesla hasn't been able to break through to
the mainstream American masses. As the Tesla Supercharger network expands from its current
number of 100, Tesla hopes to launch Model X in 2014 to great demand.
Since the Model X has not yet been released, consumers and the media are only left to
speculate on the qualifications of the new model. However, other car companies are beginning to
offer their version of the luxury electric SUV. The most direct competitors of the Model X are:
• Audi Q-8 E-tron: This is the car that will most directly compete with the Model X,
although it is to be released in 2015.
• Other hybrid models from Toyota and Honda: the fact that many other automakers create
hybrid models of sedans and SUVs is limiting Tesla and holding them back.
Tesla Motors, Inc. Situation Analysis 10
As we begin the Model X campaign, we need to distance Tesla and find the sole factor that
separates it from it's lesser priced, more generic counterparts. Although Tesla already has a
dedicated "niche" following, for the Model X to be successful it needs to gain more widespread
appeal through an integrated campaign.
Tesla Motors (Model X) Competitors: Luxury models that are NOT electric
• Chevrolet Corvette Stingray
• Mercedes-Benz S Class
• Jeep Cherokee
• Lexus RX 350
• Cadillac CTS
Tesla Motors, Inc. Situation Analysis 11
Works Cited
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Tesla Motors, Inc. Situation Analysis 12
not-be-the-year-of-the-electric-car/>. "Model X | Tesla Motors." Model X | Tesla Motors. Tesla Motors, n.d. Web. 07 Apr. 2014. <http://www.teslamotors.com/modelx>. Morris, Christopher. "ValueWalk." ValueWalk. ValueWalk, 03 Feb. 2014. Web. 07 Apr. 2014. <http://www.valuewalk.com/2014/02/tesla-model-x-release/>. Motavalli, Jim. "Why The Tesla Model X Is A Home Run." Forbes. Forbes Magazine, 13 Feb. 2012. Web. 07 Apr. 2014. <http://www.forbes.com/sites/eco-nomics/2012/02/13/why-the-tesla-model-x-is-a-home-run/>. NASDAQ. "Tesla Motors, Inc. Analyst Forecasts Earnings Growth." NASDAQ.com. NASDAQ, Apr. 2014. Web. 07 Apr. 2014. <http://www.nasdaq.com/symbol/tsla/earnings-growth>. Rogowsky, Mark. "Numbers Don't Lie: Tesla Is Beginning To Put The Hurt On The Competition." Forbes. Forbes Magazine, 24 Aug. 2013. Web. 07 Apr. 2014. <http://www.forbes.com/sites/markrogowsky/2013/08/24/numbers-dont-lie-tesla-is-beginning-to-put-the-hurt-on-the-competition/>. Shukla, Vikas. "Tesla Motos Inc (TSLA) Model X Rival Confirmed: Audi !8 E-tron." ValueWalk. ValueWalk, 31 Jan. 2014. Web. 07 Apr. 2014. <http://www.valuewalk.com/2014/01/tesla-motors-inc-tsla-model-x-competitor-audi-q8-e-tron/>. Sparks, Daniel. "Motley Fool: Betting on Tesla Stock in 2014." USA Today. USA Today, 25 Dec. 2013. Web. 7 Apr. 2014. <http%3A%2F%2Fwww.usatoday.com%2Fstory%2Fmoney%2Fmarkets%2F2013%2F12%2F25%2Fwhy-im-betting-on-tesla%2F4189143%2F>. Spiegel, Mark. "New Models From Honda And Audi Will Consign Tesla And Its Superchargers To A Smaller Niche." Seeking Alpha. Seeking Alpha, 01 Feb. 2014. Web. 7 Apr. 2014. <http%3A%2F%2Fseekingalpha.com%2Farticle%2F1986611-new-models-from-honda-and-audi-will-consign-tesla-and-its-superchargers-to-a-smaller-niche>. Stoklosa, Alexander. "2014 Tesla Model X." Car and Driver. Car and Driver, Feb. 2012. Web. 07 Apr. 2014. <http://www.caranddriver.com/news/2014-tesla-model-x-photos-and-info-news>. "Tesla Cars." Top Speed RSS. Top Speed, n.d. Web. 07 Apr. 2014. <http://www.topspeed.com/cars/tesla/index423.html>. Voelcker, John. "5 Things You Probably Didn't Know about Tesla Motors." The Christian Science Monitor. The Christian Science Monitor, 19 Sept. 2013. Web. 07 Apr. 2014. <http://www.csmonitor.com/Business/In-Gear/2013/0919/5-things-you-probably-didn-t-know-about-Tesla-Motors>. White, Joseph B. "BMW, Cadillac Aim to Pull Plug on Tesla With Pricey New Cars." The Wall Street Journal. Dow Jones & Company, 20 Nov. 2013. Web. 07 Apr. 2014. <http://online.wsj.com/news/articles/SB10001424052702303653004579210053345661982>. "Why It's Okay That Tesla Makes Cars for Rich People." Technology Review. MIT Technology Review, 6 May 2013. Web. 7 Apr. 2014. <http%3A%2F%2Fwww.technologyreview.com%2Fview%2F514601%2Fwhy-its-okay-that-tesla-makes-cars-for-rich-people%2F>.