Tesla Company Marketing Essay 2022

Running Head: MARKETING
tESLA COMPANY
Marketing
Essay
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Tesla motor is considered as one of the biggest American automotive company in the
automobile sector. It is also known for designing and manufacturing of luxury electric operated
vehicle power train equipment and batteries. This company is also registered in NASDAQ trade
center under the name of TSLA. 2013 was the first year in Tesla Company in which they have
shown profit in the market (Greiner & Ivory Sherman, 2019). This company was able to gain
attention of the business world when they introduced Tesla Roadster which was the first full-
electric vehicle. After gaining success, this company moved to their other project which is
known as model S. In this model, company tries to introduce luxury features in their electric car
and they are further moving to new concept a crossover in the form of model X.
In 2007, Eberhard founder of this company has resigned from his CEO post and preferred
to join as advisory board of the organization. He left the company but still remained shareholder
of this organization. Another change happened, when Vice president of electrical engineering
development left the company. In this way Musk obtained post of CEO in the company, this
announcement helped them to raise $226 million. In year 2012, Tesla Company has announced
that they are going to stop their roadster platform and will focus on Model S sedan which was
much admired by various automotive makers because of its high performance and pattern. This
model has three battery variant available which provides them approx. range of 235 miles
(Schreiber & Gregersen, 2019). In addition to this, battery options which offer high performance
provide acceleration from 0 to 60 miles within 4 seconds along with top speed of 130 miles per
hour. Frame pattern of Model S was very different from Roadster because battery was placed
underneath the floor instead of placing it in front like Roadster. This helps in creating more space
with effective handling due to a low center of gravity. In 2014, they focused their interest in
semiautonomous driving in model S.
This concept helped the company to gain the sale of over 100,000 units in Dec. 2015
which is three years after their launch. Companies' bestselling product was Model S which was
one of the unique products which offer plug-in facility in the car. Due to this innovative feature,
this product was able to gain second range in the bestselling plug-in car just one position below
Nissan Leaf. Although their main focus was mainly related to cars manufacturing but still they
have entered in the home and office equipment in which they install batteries and high powered
charges in European region, Asian region and also in North American region (WU, 2019). They

have also introduced their charger program in commercial business such as shops, restaurants
and other related potential customers. The founder of Tesla Company, Elon Musk aim was to
build an independent company which was focused on designing and manufacturing fully electric
operated car to the potential buyer within affordable price. This strategy helped this company to
gain the attention of those people who believes in car hybrid system.
Tesla Company mainly operates two types of strategies. One is genetic and other is an
intensive approach. In generic strategy, Tesla Company is mainly focused on generating
differentiation in order to create a competitive advantage over other car manufacturing
companies in the market. Tesla has adopted innovative environment-friendly technology while
most of the car manufacturing companies are focused on the internal combustion engine
(Kompalla et al., 2017). With the help of high-end electric vehicle development, this company
tried to create a new market place in the existing business world. This strategy offered the most
innovative product to the potential customers which are focused towards environment protection.
At present due to decline in production cost this company has shifted its strategy towards global
differentiation by offering luxury comfort to their high-end models within affordable price for
the target audience.
Tesla company strategy is mainly focused on specific technological product life cycle. In
addition, their aim was to enter into the electrically operated luxury car market in which potential
customer is willing to pay for innovative technology. After attaining maturity level this company
tries to enter a larger market in which competition is high due to low price rate (Subramanian, K.
P., & Balanagarajan, 2018). Tesla has adopted three-step strategies under which battery and
electric drivetrain technology is developed for each model whose payment is associated with
sales of previous products such as Model 3 and Model S. These models are mainly connected
with Roadster platform (Khan et al., 2018). In this strategy, company was focusing on making
Tesla Roadster with high price but in low volume. While model S is linked with the middle range
price with medium volume. Tesla Company third generation is mainly associated with low price
and low volume.
In intensive strategy, company adopted four-step strategies in which they first tried to
penetrate in the market which is growing intensively. In this, Tesla company has adopted
aggressive marketing related to electric cars which have increased their sales in United States.

This helped Tesla company in increasing its market shares in the present business market with
the help their pollution-free electric vehicle models (Teece, 2018). Then this company entered
into product development phase in which they came up with a new model in order to set up new
sales. In this company came up with Model S with most advanced technology fitted system
which helps them to lower down the business environment pressure on them. They combined
luxury as well as an electric operated system together to offer the most innovative product in the
existing market which helped them to increase their market share. This electric operated vehicle
helps the company to attract potential customer towards these products. In addition, this
company is focusing on intensive growth approach in the form of research and development
pattern (MacDuffie, 2018). In addition to this, Tesla Company also makes use of intensive
growth strategy. The purpose of this strategy was mainly focused on entering in to complete new
business market so that they can expand their business on the global level. This strategy is based
on mission and vision of the company which is linked with making use of most innovative
technology which is being transformed into environment-friendly fuel in the form of electric
motors. They have also entered into the market of heavy vehicle which has shocked entire
automobile industry on the global level because no automakers have ever imagined this kind of
concept related with heavy vehicles (Alam, 2019). This concept offers tesla a unique image in
the business market by focused on differentiation segment. In addition, they have also adopted
various strategies partnership with other companies which are working on the related concept.
Another strategic approach used by this company was making use of its innovative battery
product other than automobile products or non-automotive products (Zeng et al., 2019). These
strategies have a direct impact on the financial performance of the company in the business
market. In addition, company has focused on their automotive energy solution. Through their
continuous investment in research and development of the product, they are able to differentiate
their products by diversifying it from the old market into new identified business possibilities.
As per the study, it has been found that targeting premium customer is one of the
effective strategies of Silicon Valley and related global technology industries such as phones,
laptops, and other innovative products which is operating in maturity cycle and are going to
increase in future. As per CEO of Tesla company innovative technology related to any stream
first entries into optimization phase and then reaches to mass market. Competition is between
business markets of trillion dollars gasoline cars and electric car (Kanger et al., 2019). The

combination of this high-end vertical integration of motors offered a unique strategy in the
present automotive market in which most of the marketers are focused on development of
engines and new vehicle assembly. Tesla strategy is focused on pure electric technology which
they also want to introduce into large vehicle market.
During year 2017, Tesla Company delivered almost 29,870 vehicles which include 15200
Model S, Model X -13120 and Model 3-1550. This was considered one of the best performances
of Tesla Company related to their Model S and X. In this year company has successfully
achieved 27% rise in fourth-quarter along with 9% rise in third-quarter before this company was
continuously facing issues related to sales (Tesla, 2018). The company continued to focus on
delivering around 2520 Models of S and X along with combination of around 860 version of
Model 3 in orders to attract more customers. 2018 year was considered as one of the most
essential years for Tesla history because when company introduces their Model 3, they come to
various challenges related to battery setup and after few time related to an assembly line. But due
to effective teamwork company was able to recover from all challenges in the middle of 2018
which helped the company in bringing stability to their high-end volume (Perkins & Murmann,
2018). Due to this hard work, Model 3 was able to become one of the most successful passenger
vehicles in United States regarding their revenue for both Quarter 3 and Quarter 4. Company was
very successful in selling almost 140,000 units in which Model 3 is considered their most
premium vehicle in United States. First time in the history of US, electric vehicle is able to make
such remarkable sales.
(Source: OEM data , 2018)

Model 3 achievement has helped Tesla company to perform better during quarter 3 and
quarter 4 in 2018. It has been found that operation income of fourth-quarter stayed fixed despite
consecutive decline in revenue related to sales credits. These declines are actually the result of
heavy imported duty which is imposed on the product from china related to Model S and Model
X. This helped in introducing another mid-range form in the form of Model 3 (Tesla, 2018). This
concept improved the profit margin of Tesla in the second quarter of 2018 by transforming from
a negative level to other premium vehicles. But having a good margin was not enough to
maintain the performance of automobile industry for a long time especially in the fourth quarter
where it was hard to maintain the operating margin at 5.7%. It has found that GAAP of Tesla
was directly impacted by non-cash charge. In addition, system of free cash flow positively
impacted the performance of the company in the fourth quarter (MacDuffie, 2018). During the
second half, cash position of Tesla was improved up to $ 1.45 billion in spite of repayment by
the company in the form of bonds which was nearly $ 230 million. During year 2019, Model 3
was very successful in achieving growth on a continuous basis due to their full-year production.
In addition, company was focused to establish their production plant in Shanghai and probably
half of the Model 3 will be manufactured in this new unit (Lamb, 2019). At present, company is
working on Model Y in order to support the company for the effective sales of 2020. These
activities are planned in order to maintain a respectable position in the business market regarding
the sales of 2020 and so on.
(Source: OEM data, 2018)

As per the study, it has been explored that production rate of Model 3 was continuously
improving during the fourth quarter and has achieved its maximum growth in December month.
It simply states that company has passed s-curve and are moving towards a continuous
improvement process in order to attain regular growth in their sales. Company is planning to
produce 7000 vehicles on a weekly base in order to maintain a sales balance for their products.
The company was very successful in decline the product cost in Model 3 with the help of
innovative technology which is very essential in order to remain sustainable in the present
business market (Mehta & Bhavani, 2018). This process also ensures the continuous profit in the
form of sustainability. Establishment of new plat in china is the plan of lowering down labour
rate per hour so that maximum profit margin can be generated.
Tesla motors develop electric powertrain equipment's related to vehicle which was a very
unique combination in the automobile market. Tesla Company has introduced Tesla roadster
batteries instead of internal combustion engine under the name energy storage system. Instead of
investing in improving the performance of the internal combustion engine, company directly
focused their interest in innovative technology (Al-Zareer, Dincer & Rosen, 2018). In addition,
Tesla Company introduced a completely new power source which offered a great benefit to the
organization in the form of high performance. Tesla used technology which is mainly linked with
computer-operated field such as rechargeable lithium batteries. Tesla new product roadster
consists of almost 6831 lithium batteries in them which offered them effective performance. In
addition, it has found that these batteries combined form weight of around 1000 pounds. One of
the greatest benefits of these batteries is that they are able to offer five times more storage
capacity as compared to other batteries (Ziemann et al., 2018). These batteries are set up into
almost eleven sections along with 621 batteries on each section. Then a separate computer
processor is involved in each section for control in order to ensure that charging and discharging
operations are running smoothly. Then Tesla focused their interest on power electronics module
which offers power inverter along with charging system that has the ability to convert DC energy
into AC energy with the help of around 72 insulated gate bipolar transistors. This innovation
helped tesla in increasing the power efficiency when compared to their first generation electric
vehicle (Das, Williams & Greenwood, 2018). This kind of battery has the capability of
accelerating during the peak period by which it can crank out around 200 KW of energy which is
sufficient to light 2000 bulbs on immediate bases.

In order to control charge and discharge operations rates, this Power electronic module
control voltage stage which also include RPM, torque along with regenerative braking system.
This innovation of regenerative braking system helps in storing kinetic energy which otherwise
was lost in the form of breakdown. This technique helped in converting this lost kinetic energy
into ESS (Porras & Blatchley, 2019). It has been found that this kind of innovation combined
both efficiency and other technique of battery and motor system in around 85 and 95 percent.
This allows this energy motor to generate power of around 185 KW. Then they focused on
Aluminum heat dissipation fins and a rear-mounted ventilation port which protects the system
from getting overheated in case of high speed.
Tesla had invented two different ways of recharging their roadster. One is installing a
recharging station at garage of the owner with the help of an electrician. This system will consist
of 220-volts and 70 amp outlet that has the ability of full recharging the Roadster within 3.5
hours from zero charges. Another option they have provided is in the form of mobile charger in
which the person has to just plug in the kit in night till morning until the Roster gets fully
charged. In addition, they also offer various innovative features which allow this product to offer
their charge service to any electric equipment at the time of emergency with the help of this
mobile kit system. It has been seen that many auto owners are driving their cars with gasoline
from years and at present driving battery-operated car offered them better car experience. But
there were some incidents which have put the use of lithium-ion batteries into risk environment
which has the ability to reduce the sales for their product (Yamanaka et al., 2019). In this
situation with the innovative technology Tesla Company has ensured that proper safety is offered
related to use of Roadster power system. In this protection process, company has extensively
used catastrophe test which includes heating of each cell till they will not burst off. In addition,
they have managed to separate each cell from other adjacent cells in order to prevent damage
from the burst of other cells so that a chain reaction may not occur in the cells. A sensor detector
is also involved as a host which recognizes acceleration, temperature, and smoke. In simple
words, these sensors identify any kind of abnormal activities related to the battery in the form of
crash, it instantly disconnections the system by directly shutting down the processor from the
power system (Peng et al., 2019). There are other sensors which detect the possible dysfunction
related to the battery so that a protective environment can be offered to both products as well as
the person who is driving this product.

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