Seminar paper from the year 2016 in the subject Business economics – Business Management, Corporate Governance, grade: 1, 0, Post University, course: Competitive Intelligence, language: English, abstract: The overall electric vehicle industry has grown significantly in the last five years. One of many reasons for that was the introduction of Tesla`s first electric vehicle in 2009 with a strong differentiation strategy. Tesla is now focused on its entry into the mass automotive market. To achieve that, the company is committed to invest heavily in its production capacity and model line-up, most recently with the introduction of Model 3.
Tesla’s competitive advantages for this strategic goal include a superior electric vehicle technology and recharging infrastructure, brand recognition, a first mover market position, and a strong network of strategic partnerships. However, since the company entered the industry in the premium sport and luxury sedan vehicle niche segment, it has a resource disadvantage in regards to know-how, large-scale manufacturing processes and model line-up when it comes to the mass automotive market. Additionally, the company is relying on an overall growth of the EV demand, technological improvements and a high number of customer referrals in the near future.
There is a large number of existing premium manufacturers in this space, several of which already enjoy major manufacturing and economies of scale advantages that will make this endeavor highly costly and risky. However, the combination of Tesla’s competitive advantages and aggressive marketing could result in the capture and sustainment of a significant percentage of market shares in the mass automotive segment.
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