Electric Vehicle Market Analysis

This assignment delves into the burgeoning electric vehicle (EV) market. It examines various aspects influencing its growth, including supportive government policies like grants and bans on fossil fuel vehicles, evolving consumer attitudes towards EVs, and Tesla's innovative marketing approach. The analysis also explores the technical characteristics of EVs, their environmental impact, and challenges such as charging infrastructure limitations.

Running head: BUSINESS POTENTIAL OF TESLA MOTORS
Business potential of Tesla motors
Name of the student
Name of the university
Author note

1BUSINESS POTENTIAL OF TESLA MOTORS
Executive summary
The aim of this report is to discuss about the approaches being initiated by Tesla in
gaining their competitive advantages. Moreover, the market potentiality of Tesla in the
market of United Kingdom had also been discussed. It is been concluded that, the key
competitive advantage being gathered by Tesla is from their innovative and sustainable
products. Initiation of distinctive marketing approach helps them to act as
complimentary to their innovative products.

2BUSINESS POTENTIAL OF TESLA MOTORS
Table of Contents
Introduction...................................................................................................................... 3
Market potentiality in the market of United Kingdom........................................................4
Marketing strategy of Tesla..............................................................................................5
Marketing mix for Tesla................................................................................................6
Recommendations...........................................................................................................9
Conclusion..................................................................................................................... 11
Reference.......................................................................................................................12

3BUSINESS POTENTIAL OF TESLA MOTORS
Introduction
The current business scenario, especially the automotive sector is facing
challenges regarding their effect on the environment. In the present state of affairs,
environmental degradation became a key issue for all the stakeholders to consider.
Automotive manufacturers are facing the challenges of producing more environment
friendly cars in order to reduce the environmental effect of their products (Mayyas et al.
2012). Along with that, government of different countries is also introducing different
regulations to reduce the use of conventional gasoline vehicles and to opt for electric
and hybrid vehicles.
At this point of time, a group of engineers entered in the existing business
scenario of automotive industry with the mission of changing the perception of the
people about electric cars (Tesla.com 2017). From there, they came up with the first car
from the stake of Tesla, model S and then model X. Both the cars redefined the
scenario of electric automotive by being the fastest and cleanest in their respective
category. Moreover, initiation of various other unique technologies and business
approaches, Tesla is enhancing their competitive advantages as well as redefining the
whole automotive industry.
This report will discuss about the approaches being initiated by Tesla in gaining
their competitive advantages. Moreover, the market potentiality of Tesla in the market of
United Kingdom will also be discussed. Necessary recommendations will be provided in
order to further enhance the operational activities of Tesla.

4BUSINESS POTENTIAL OF TESLA MOTORS
Market potentiality in the market of United Kingdom
United Kingdom is one of the fastest growing markets in Europe for the electric
vehicles. The last few years saw an unprecedented growth of the market of plug-in
electric cars. By the end of July, 2017, the rate of new registrations for new electric cars
stands at 107000 compared to only 3500 in 2013 (Lane 2017).
Figure: 1
Growth of electric car market in UK
Source: (Lane 2017).
Along with the change in the taste and preference pattern of the customers in
United Kingdom towards electric cars, the regulations initiated by the government is
also contributing in increasing the sales of electric cars. Recently the government of

5BUSINESS POTENTIAL OF TESLA MOTORS
United Kingdom has taken the initiation of banning all the petrol and diesel cars by the
year 2040 (Asthana and Taylor 2017). This will be a huge market opportunities for the
electric car manufacturers such as Tesla. Thus, entering the market of United Kingdom
at this present initial stage will help them to create the brand image in the long run.
Specifically for Tesla, the market opportunity will be more compared to their
competitors. This is due to the reason that, the approaches of the product portfolio of
Tesla is quite distinctive compared to the leading electric cars in the market of United
Kingdom such as Nissan Leaf.
While, majority of the electric cars are oriented towards the less amount of
emissions and urban commuting, Tesla is more focused in offering racier version of the
electric cars with having great looks, acceleration and practicality. Moreover, the
initiation of supercharging stations by Tesla will also help them to enhance the
convenience to their customers and they will be more lured to have the access of cars
from Tesla (Hardman, Shiu and Steinberger-Wilckens 2015). Another key market
opportunity for Tesla in United Kingdom will be the providence of incentives for the
customers in buying the electric cars (Gov.uk 2017). In motivating the people to opt for
electric cars, government of United Kingdom is offering incentives in the price of the
electric cars. Thus, customers will more opt for electric cars and the market potential for
Tesla will get increased.
Marketing strategy of Tesla
The marketing and promotional activities being initiated and maintained by Tesla
are pone of the key reasons behind their rapidly growing popularity in the global market.

6BUSINESS POTENTIAL OF TESLA MOTORS
Unlike their conventional competitors, Tesla adapted a less extensive marketing policy
in reaching out to the potential customers. According to their marketing strategy,
offering a great, value creating and unique product to the customers will automatically
helps to promote the brand in the market. Rather than extensively depending on the
paid mediums, they are more dependent on the earned mediums. 4p’s of marketing mix
will be used to discuss the marketing strategy of Tesla.
Marketing mix for Tesla
Product Tesla is having diversified product portfolio ranging from batteries to
solar panels to super charger and home UPS. However, the cash
cow for them is their automobile department. Their entire product
portfolio is a prime medium to gain competitive advantages due to
the reason that, all of their products are being positioned as devices
running in renewable source of energy. Thus, Tesla is gaining
competitive advantages in the market by marketing their products as
environment friendly and cleaner products (Helmers and Marx 2012).
Moreover, as discussed earlier, the approach of their electric
vehicles is distinctive compared to other electric vehicles in the
market in terms of looks, utility and performance. Thus this is also
helping them in creating distinctive image as well as competitive
advantages from the market. Initiation of superchargers by their own
also enables them in having extra source of revenue from the
market. The superchargers by Tesla are unique in providing fast
charging to the cars (Rajagopalan et al. 2013). Thus, apart from the

7BUSINESS POTENTIAL OF TESLA MOTORS
cars, these are also a good mode of having continuous rate of
income from the market. This is not applicable for their competitors
as they do not possess these kinds of offerings.
Price In the case of pricing strategies, Tesla follows an unique strategy. At
the initial stage, they first introduced the Model S, which is having
extravagant price tag. Thus, it will only be accessible to the super
rich customer segments. They have priced it higher to accommodate
the flow of fund in research and development of this project. Thus,
the money being gathered from the niche market made way for
further development in introducing cheaper cars, which lead to the
initiation of Model X. It is cheaper compared to the Model S,
however, still out of reach of the mass market customers. Now,
according to the pricing strategy of Tesla, the initiation of premium
pricing and premium products in the initial stage helped them to gain
an extra customer attraction and helped them in sourcing the
requirement of extra fund to develop the mass market cars (Martins,
Rindova and Greenbaum 2015). The capital being accumulated from
the Model S and Model X are being used in development of their
mass market car Model 3. Thus, due to their pricing strategy, they
have entered the mass market after gaining enough goodwill from
the niche market and have acquired capital for further development.
In addition, with having the product portfolio containing Model S, X
and 3, Tesla will now have products to cater to different customer

8BUSINESS POTENTIAL OF TESLA MOTORS
segments.
Place In the case of choosing the place or sales point, Tesla has taken a
unique approach. According to them, due to the fact that, Tesla is a
new entrant in the market, thus they are in the need of more
customer awareness and footfalls in their showrooms. However, the
showrooms of conventional car makers are situated in independent
locations. On the other hand, Tesla has made their showroom in
different malls having huge customer footfalls (Forbes.com 2017).
The space of the showrooms is similar to an average store in any
mall, where only a single car can be squeezed in. However, this
helped them to present their cars to more number of people. They
have got chance catch the glimpse of the cars by going for shopping
or movie in the mall. Moreover, Tesla has also initiated the online
shopping of their products. According to this concept, customers can
book their chosen car from their official website and according to
their personal specification such as color and battery capacity. Thus,
in terms of offering their products, Tesla is way ahead from its
competitors by offering from diversified places.
Promotion As discussed earlier Tesla depends more on earned media rather
than paid media. Thus, they are more focused on generating positive
word of mouth from the existing customers. Viral marketing is one of
the key sources of promotion for them (Schulze, Scholer and Skiera
2014). Viral marketing helps them in reaching to more number of

9BUSINESS POTENTIAL OF TESLA MOTORS
customers effectively and it helps them in having positive impression
for their products among the potential customers. They also involves
sales promotion in public place but they promote their products as
cleaner and sustainable option to the conventional products. Thus, it
helps them in gaining positive goodwill and impression in the market.
According to the promotional policy of Tesla, if the product is
distinctive and can meet the customer requirement effectively, then it
will automatically gather popularity in the market without having any
extensive marketing activities. Thus, Tesla is more concentrated in
developing more updated products than investing in marketing
activities. Other promotional initiatives such as inclusion of their
patents in the open source movement help to create the positive
impression about the brand and convey their objective of enhancing
the global sustainability. Customer referral programs are also being
initiated by them to increase the customer loyalty.
Recommendations
Though Tesla is going well in the present business state of affairs and having
favorable and positive future potential in the market. However, there are several areas
which need to be improved by them in order to gain more competitive advantages from
the market and to stable their position for the coming years. The recommended steps
will be discussed in the following sections.

10BUSINESS POTENTIAL OF TESLA MOTORS
 In the current global economy, the growth rate of developing countries is more
compared to the developed economies. Thus, it is important for Tesla to tap the
market in the developing countries such as India and China along with the
western markets. Moreover, in the recent times, government of India and China
have also initiated the regulations regarding banning the petrol and diesel
vehicles. Thus, these countries will also be huge market opportunities for Tesla.
Moreover, initiation of services in more countries will help them to become a truly
global organization along with increased brand awareness and equity.
 Tesla has started the production of their mass market car Model 3; however, it is
being priced at $35000, which may not be affordable to a large section of
customers. This is due to the reason that, a car priced at $35000 may not be
called as true mass market model. Thus, it is of need for Tesla to introduce
cheaper models in the market to reach out to larger customer segments along
with achieving their goals of sustainable world (Graham-Rowe et al. 2012).
 Future of the electric cars depends on associated infrastructure such as charging
points and stations. Thus, the superchargers being initiated by Tesla should be
placed in various locations in a market prior to their entry. This is due to the
reason that, customers will not get motivated to buy electric cars if they do not
have the access to the infrastructure.
 The battery packs being offered by Tesla are offering more range compared to
their competitors. However, in order to cater to customers from different regions
around the world, they have to enhance the range of their battery along with their

11BUSINESS POTENTIAL OF TESLA MOTORS
lasting ability. Only then customers will get motivated to shift from their
conventional vehicles to electric vehicles.
 As Tesla is more oriented towards earned media than paid media, thus, initiation
of social media marketing will be more beneficial for them. It will help them to
engage with the customers effectively and can determine the expectation and
requirement of the market. Moreover, the customer feedback regarding their
existing products can also be effectively generated.
Conclusion
Thus, it can be concluded that, the key competitive advantage being gathered by
Tesla is from their innovative and sustainable products. Initiation of distinctive marketing
approach helps them to act as complimentary to their innovative products. The business
approach being discussed in this report helps to conclude that Tesla has changed the
existing scenario of automotive industry and market by raising the benchmark to a new
height. However, there are some recommendations being discussed in this report.
Effective implementation of these recommendations will help the organization in having
sustainable development n the coming years.