Tesla Motors: Revolutionizing the Automotive Industry

Having a unique strategy is crucial for success, and Tesla Motors has set itself apart from competitors in the automobile industry. In today's global economy, having a distinct marketing strategy is essential to meet the changing needs of customers. Through a strategic analysis of Tesla Motors, we can understand why the company stands out and how effectively they execute their strategy. With the introduction of the Tesla Roadster, Tesla Motors has brought new competition to an industry that has not seen significant threats since WWII.

Tesla Motors is leading the way in the electric sports car movement within the automotive industry. Competitors are starting to understand Tesla's overall strategy of introducing a variety of models, including more affordable family vehicles. The goal is to shift the industry towards solar-powered electric sources instead of traditional hydrocarbons, marking a significant success for a U.S. auto company post-World War II. Rivals are wary of Tesla's Roadster, which outperforms gasoline sports cars like Porsche and Ferrari in terms of energy efficiency and handling.

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The higher cost of Tesla's electric vehicles is due to their innovative technology. Their strategy involves starting with high-end market offerings before gradually moving into lower price ranges with each subsequent model - beginning with a sporty four-door family car priced at half that of the Roadster, followed by an even more budget-friendly third model.

Tesla, a rapidly growing technology company, utilizes its cash flow to fund its own research and development projects. This strategy will ultimately reduce costs for the Roadster and enable the company to bring more products to market quickly.

The overarching concept is that affluent customers are essentially contributing to the development of a more affordable family car. Therefore, armed with this knowledge, Tesla is revolutionizing the car shopping experience by establishing high-end, company-owned stores in popular shopping areas rather than following the conventional dealership model favored by many of its competitors. This unconventional approach has led to tensions within the auto dealership industry, as Tesla's deviation from the traditional dealership route conflicts with regulations enforced by dealership associations in various states. By selling their products exclusively through company-owned stores, Tesla gains full control over sales and interactions with customers interested in environmentally friendly vehicles. (Tesla Motors)

Musk argued that existing franchise dealers have a fundamental conflict of interest that prevents them from effectively promoting the benefits of electric vehicles without undermining their traditional business. The belief that traditional dealerships could send conflicting messages to customers by primarily focusing on gasoline-powered cars is accurate. Many traditional dealerships operate on a red ocean strategy, where all products are similar, which does not align with Tesla's blue ocean strategy. Unlike traditional dealerships, Tesla's service operations are separate from the sales network, giving customers choices for repairs and services for their Model S. Options include visiting a licensed Tesla service center, calling a mobile service and repair team (Tesla Rangers), or utilizing Tesla's valet service for loaner cars. In marketing the Model S, Tesla emphasized speed, comfort, and handling before highlighting its low emissions. (Tesla Motors)

Tesla's salespeople were paid a salary instead of commission in the company-owned stores, reflecting their unique approach to getting products to customers while also maintaining efficiency in their operations. Unlike Fisker Automotive, which was founded by Henrik Fisker (a former Tesla employee who worked on the Model S), Tesla initially designed and produced the cars' powertrain in-house in California before combining it with a body and chassis from the Lotus Elise, which was assembled in the U.K. CEO Elon Musk eventually decided to consolidate operations in California to streamline engineering and manufacturing processes. By doing so, Tesla achieved complete control over the product without incurring the high costs associated with outsourcing manufacturing, ultimately avoiding the substantial expense of building a new auto plant estimated between 1 and 2 billion dollars.

Tesla acquired the massive NUMMI plant in Fremont, California for $42 million, which had the capacity to hold 500,000 cars per year. They also bought production equipment from struggling manufacturers at discounted prices. With this purchase, Tesla increased their output from 21,000 cars annually to 100,000 without straining the production equipment. This move gave Tesla full control over their product by allowing them to bring parts production in-house and manufacture 90% of Model S-specific plastic parts on their injection molding machines while producing their complete powertrain internally.

If you travel less than 350 miles per week, you will be energy positive in terms of your personal transportation. This means that you will be putting more energy back into the system than you consume in transportation, going beyond just conserving or nullifying your energy use for transport. The master plan includes steps like building a sports car, using the money to build an affordable car, and then using that money to build an even more affordable car. While doing all of this, there will also be a focus on providing zero emission electric power generation options. It's important to note that Tesla Motors will be co-marketing sustainable energy products from other companies along with the car.

One example of the options we will provide is a reasonably priced solar panel from SolarCity, a photovoltaics company (of which I am also the main investor). This particular system is compact and affordable, making it ideal for installation on your roof in a discreet area or as a carport. It is capable of generating approximately 50 miles worth of electricity per day.