University Assignment: Tesla's Entry into the U.S. Auto Industry

This assignment is a case study analyzing Tesla's entry into the U.S. auto industry. It addresses key questions, including how Tesla overcame barriers to establish brand loyalty, manufacturing, and a dealer network, while securing capital. The paper explores the challenges reshaping the automotive industry, such as electrification and autonomous driving. It details Tesla's strategic Master Plan, assessing its success, and highlights the importance of the Model 3. The paper proposes strategies to enhance Tesla's sales and service, emphasizing improvements in battery production, manufacturing techniques, and renewable energy adoption. The analysis references Sull & Reavis (2019) to support the findings.

Running head: TESLA’S ENTRY INTO THE U.S. AUTO INDUSTRY
Tesla’s Entry Into the U.S. Auto Industry
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1TESLA’S ENTRY INTO TEH U.S. AUTO INDUSTRY
Questions:
1. How did Tesla overcome the barriers of creating brand loyalty, building
manufacturing capabilities and factories, developing a dealer network, and attaining
the capital requirements to develop and build a new car?
There were strong obstacles to joining the automotive industry. New
competitors had to struggle with building brand loyalty, building production capacity
and warehouses, establishing a supply chain and meeting capital requirements to
design and build a new vehicle that could cost as much as $6 billion for up to several
years. The most important manner in which Tesla did bring hold of the brand loyalty
is the production of cars with improved technology. According to Sull & Cate (2019),
there were different thoughts of the millennia parents regarding the ownership of the
cars. The customers who purchased the Tesla cars found safety in the cars due to the
fuel efficiency. Also the buying factors such as the price, the brand quality as well as
the spaciousness played an important role in determining the brand loyalty of the
customers. Along with the reluctance of the customers the purchasing of cars from the
dealership made the people reluctant to work because of the long working hours as
well as the unstable payments (Sull & Cate, 2019)
2. Mention and explain the challenges that have been reshaping the automobile industry
in recent years.
The automobile industry faced a number of challenges in the recent years of
2018 and 2017. There had been a growing amount of change in the trend of
electrification. A lot number of people shifted towards the adoption of the Electric
Volts (EVs), since there had been changes in the climate and the environment (Sull &
Cate 2019). This adoption of the new technique gave rise to the urgent need for the
public charging stations. Although this had been environment friendly, there had been

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another associated problem with this adoption. The experts from the industry had
warned the people that this electrification would exert a lot amount of stress over the
electric grids, if the owners of the cars chose the peak hours of the day to charge their
cars. This gave rise to the need of the fossil fuel plant because the demands of the
owners increased. This challenge would not have been such an important one if there
had been the option for charging the cars from the solar energy. Also according to
Sull & Cate (201), another important challenge that the automobile industry had to
face is the increasing shift to the autonomous driving techniques, such as the alternate
transportation and the new techniques in car sharing. The automated driven cars had
the ability to reduce the ownership of the private cars.
3. Describe Tesla’s strategic Master Plan, and comment if you think it has been
successful.
The strategic Master Plan of Tesla includes the entry into that part of the
market where the customers are ready to pay the finest prices and then eventually
reduce the prices of the models with each successful car models that would arrive in
the market (Sull & Cate, 2019). The new strategic plan of Tesla was indeed
successful, because it got hold of the market by introducing the automobiles that
included the luxury gas fuelled models. For example, according to the strategy, the
best car that Tesla had launched in the niche market was the two-seat Roadster. This
car was able to hit almost 60 miles per hour in just 4 seconds. Although it did face a
number of challenges, it got neutralized because by the time the company stopped
making Roadster, there were almost 2500 models that were sold (Sull & Cate, 2019).
Another best model of Tesla that had the maximum number of sales included the
Model S Sedan, which also successfully won the award of the Motor Trend. Moreover
in accordance with this, the company introduced the Model X, which had a new

3TESLA’S ENTRY INTO TEH U.S. AUTO INDUSTRY
technology where the doors of the cars opened upwards. by the year of 2018 a large
number of Model X had been sold.
4. Explain the importance of Model 3 in the future of Tesla.
Tesla’s main attempt was to introduce a Model of the car that would be easy to
manufacture with just few parts, and 25 percent less components that the previous
models of the company. This however includes few components that would be
outsourced and few parts such as the battery and the motor would be manufactured in
the company itself. The manufacturing factory that was situated in the Nevada desert
produced more than 3000 batteries per week (Sull & Cate. 2019). The Model 3 also
include the introduction of the beta production line that would be helpful for saving
time as well as money. Most parts of the production of the Model 3 were automated
and were aimed at the use of artificial intelligence and the robots for building the cars
faster than the human efforts. The main challenge was the sale of the model 3 in the
market in the future. The sales and the service also needed to be automated because
this was different from the manual dealers and service (Sull & Cate. 2019).
5. Propose an improved strategy for Tesla to improve sales and service in the upcoming
years.
In order to improve the sales and the service of the cars of the company of
Tesla, there needs to be improvement of the battery production factory at Nevada.
This would help in the reduction of the cost of the batteries as well as reduction of the
human effort in making the batteries. Also by improving the innovative
manufacturing techniques there could be reduction of the waste materials from the
manufacture as well as it could reduce the environmental footprint (Sull & Cate
2019). The company should reshape its goals and increase its production sand in
turn , there could be improved sales of the products. Another improved strategy that

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the company can adopt is the use of the solar panels and the renewable sources of
energy, that would make it the most sustainable energy company.

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Reference:
Sull, D., & Reavis, C. (2019). Tesla’s Entry into the US Auto Industry.