cs telsa-web
TRANSCRIPT
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Competitive Analysis of Tesla
Motors
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Outline
Outline
1. Introduction
2. Case for the Electric Car
3. Internal Rivalry
4. Barriers to entry
5. Substitutes and complements
6. Supplier Power
7. Buyer Power
8. Strategy
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Tesla MotorsTesla 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
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Industry FactsIndustry Facts• Transportation accounts for 63% of Oil Demand
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Industry FactsIndustry Facts
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Industry FactsIndustry 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
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Market DefinitionCase 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.
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Tesla MotorsEfficiency vs. Performance
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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
Internal Rivalry
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Internal RivalryGM EV1 – Early Electric
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Internal RivalryHonda Insight – Early Hybrid
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Internal RivalryToyota Prius - Hybrid
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Internal RivalryTesla Roadster - Electric
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Internal RivalryVenturi Fetish - Electric
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Entry
Barriers to Entry
• Economies of Scale
• Regulation Issues
• Technological Innovations
• Brand Loyalty
• Infrastructure
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Substitutes
• Hybrids
• Flex Fuel
• Hydrogen
• Diesel
• Compressed Natural Gas
• Mass Transportation
Substitutes
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Energy EfficiencyEnergy Efficiency
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Energy EfficiencyEnergy Efficiency
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ComplementsComplements
• 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
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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
Supplier Power
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Buyer PowerBuyer Power
• Ability of buyer to extract profits from seller
• Green market is emerging
• Buyer power is limited due to lack of competition
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Buyer Power
Buyer Power
Implementation Phase
Vehicle Technology Market
Competiti
ve vehicle
Penetration
across new
vehicle
production
Major
Penetration
Total Time
for impact
Turbocharged
Gasoline Engines
5 years 10 years 10 years 20 years
Low Emission
Diesel
5 years 15 years 10-15 years 30 years
Gasoline Hybrid 5 years 20 years 10-15 years 35 years
Hydrogen Cell
Hybrid
15 years 25 years 20 years 55 years
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ConclusionConclusion
• Short to medium term strategy
• Sell 100 Roadsters
• Create recognizable product
• Self funding of future expansion plans
• Change opinion of electric vehicles
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ConclusionConclusion
• Long term strategy
• Focus on brand recognition
• Cost optimization
• Compete in mass market
• Build infrastructure
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ConclusionMartin 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.”