1. Competitive Analysis of Tesla Motors

2. Outline Outline Introduction Case for the Electric Car
Internal Rivalry
Barriers to entry
Substitutes and complements
Supplier Power
Buyer Power
Strategy
Outline

3. Tesla Motors Tesla Motors California based start-up company
Developed a high performance electric sports car
Initial funding ($60m) provided by PayPal, eBay and Google Founders
Car does 0-60 mph in about 4 seconds
Car can travel 250 miles between charges
First 100 vehicles have been sold at the asking price of $100k

4. Industry Facts Industry Facts
Transportation accounts for 63% of Oil Demand

5. Industry Facts
Industry Facts

6. Industry Facts Industry Facts
Daily use of Petroleum worldwide. At present, consumers used 80 million barrels a day (MBD) of petroleum (each barrel contains 42 US gallons). Two thirds goes to transportation
53 MBD
for transportation overall
29 MBD
for transport for people
19 MBD
for transport for freight
5 MBD
for air transportation for people and freight.
Change title: Industry Facts

7. Industry Facts Industry Facts
US Automobile Industry represents 5% of Private sector GDP
76% of the market is made up of Ford, GM and Chrysler
18% of sales are from Japanese car makers
6.6m Americans are directly or indirectly employed in the automotive industry.
Hybrid sales represented 1.2% of the market in 2005, 1.6% in 2006 (est).
Forecasts estimate 5% of car sales will be hybrids by 2013

8. Market Definition Case for the Electric Car
Environmental friendliness and low emissions
High performance
Improved battery technologies and driving range
Electric cars are more energy efficient than gasoline cars.

9. Efficiency vs. Performance
Tesla Motors

10. Internal Rivalry Internal Rivalry A green vehicle:
Reduces consumption of petroleum
Uses renewable energy sources
Has Low emissions
Is Fuel efficient
Within the “green vehicle” market there are four types:
Electric Vehicles
Flexible-Fuel Vehicles
Hydrogen Vehicles
Hybrid Vehicles

11. Internal Rivalry
GM EV1 – Early Electric

12. Internal Rivalry
Honda Insight – Early Hybrid

13. Internal Rivalry
Toyota Prius - Hybrid

14. Internal Rivalry
Tesla Roadster - Electric

15. Internal Rivalry
Venturi Fetish - Electric

16. Entry Barriers to Entry Economies of Scale Regulation Issues
Technological Innovations
Brand Loyalty
Infrastructure
Entry
Tesla has an advanteage because it doesn’t have to have volume

17. Substitutes Substitutes Hybrids Flex Fuel Hydrogen Diesel
Compressed Natural Gas
Mass Transportation

18. Energy Efficiency
Energy Efficiency

19. Energy Efficiency
Energy Efficiency

20. Complements Complements Government tax breaks
Utility incentive programs
Free Parking at Airports
Single Occupancy use of carpool lanes
No parking meter fees
50% discount by California utilities for changing electric cars

21. Supplier Power Supplier Power Lotus main outsourcing partner
Lotus is providing chassis, body and building Tesla Roadster at Lotus factory in England
AC Propulsion drive train
Lithium Ion battery
Flexibility to adopt new technologies

22. Buyer Power Buyer Power
Ability of buyer to extract profits from seller
Green market is emerging
Buyer power is limited due to lack of competition

23. Buyer Power Buyer Power Implementation Phase Vehicle Technology
Market Competitive vehicle
Penetration across new vehicle production
Major Penetration
Total Time for impact
Turbocharged Gasoline Engines
5 years
10 years
20 years
Low Emission Diesel
15 years
10-15 years
30 years
Gasoline Hybrid
35 years
Hydrogen Cell Hybrid
25 years
55 years

24. Conclusion Conclusion Short to medium term strategy Sell 100 Roadsters
Create recognizable product
Self funding of future expansion plans
Change opinion of electric vehicles

25. Conclusion Conclusion Long term strategy Focus on brand recognition
Cost optimization
Compete in mass market
Build infrastructure

26. Conclusion Martin Eberhard, CEO
“There have been tons and tons of companies, for the last 40 years that have tried to make little commuter electric cars. The trouble is that, for the most part, it requires the buyer of such a car to change his or her nature. You’re buying a car that is not as good as an equivalent gas car at all—slower, uglier, with not as much range—and they’re trying to compete essentially on price, where they can’t win. None of those cars were built for people who really like to drive. I get the feeling they’re for people who don’t really think you should be driving, but think if you do have to drive, it should be an electric car. I think if you build a car for people as they are, not requiring them to change their nature, it’s much more likely for you to succeed. And I think our investors agree.”