Tesla, Inc.

Andrew Pavelich
Ashley Sutherland
Austin Cuevas
Danielle Orozco
James Lauritano
Peyton Burger
Company and Industry Overview

Tesla is a sustainable energy company operating in the lithium battery manufacturing industry.

The company produces fully electric vehicles and energy storage systems in an effort to achieve

their mission of accelerating the worlds transition to sustainable energy (About Tesla). The

Lithium Battery Manufacturing industry involves creating batteries using lithium as the anode,

which can then be used in vehicles and other electronic devices (LeClair, 2016).

Current Marketing Challenges

One of Teslas current marketing problems has to do with its relatively small network of retail

and service centers. With less than 100 locations in 24 states, Tesla struggles to answer one

important question: how will they sell cars? Several states are strongly against Teslas model of

selling directly to consumers rather than through a franchised dealer. Unless the consumer lives

near a major city that has a Tesla gallery, they are unlikely willing to travel several hours each

way to purchase a Tesla vehicle and get the required regular service and maintenance done

(Gardner, 2016). Tesla is going to struggle with expanding their market and selling enough

vehicles to eventually become profitable if they continue to sell this way.

The second marketing challenge came in a very unanticipated way. With the announcement of

the new Model 3, many consumers are developing misperceptions that the vehicle is a new and

improved Version 3 of Teslas existing products. The company is concerned that these

misperceptions will lead consumers to expect a newer and better vehicle, when the Model 3 was

actually designed to be an affordable and mass-produced sedan. If Tesla doesnt clear up these

misperceptions before the production and launch of the Model 3, the company will likely have to

deal with disappointed customers.

Teslas final marketing challenge is their lack of charging stations. Many Tesla owners only have

access to the charger at their house. This is a major issue for users in urban areas without garages

in their houses. For example, the only 4 charging stations in Tucson are located at resorts and not

available to the general public. Tesla plans to produce 400,000 more electric vehicles by the end

of next year, and the company must manufacture more charging stations to sustain this increase

in production (Morris, 2017). There also must be enough power on the grid during times of peak

demand to keep up with charging requirements.

SWOTT Analysis

We evaluated Tesla Inc. using a SWOTT analysis looking at their different strengths,

weaknesses, opportunities, threats and trends. Teslas strengths are in innovative technology and

growth, which have helped them become an industry leader. Their weaknesses consist of debt,

net loss and high prices, but they are working on ways to resolve these issues. There are several

opportunities within Tesla, including the concept of car sharing within the Tesla network,

resulting in less energy consumption. Another opportunity is self-driving cars and improved

safety features. A threat for the company is the constant growth of their industry. BMW and GM

have both created more affordable cars that are also electric, making it harder for people to

choose Tesla first. Trends within the industry include cheaper pricing and bigger batteries

(LeClair, 2016). Below we have attached our SWOTT diagram.

Competition

Tesla's current competitors are any automobile corporation that have electric vehicle options. A

few examples include the Ford Focus Electric, Nissan Leaf and Chevy Bolt. These cars pose a

major threat to Tesla because despite their slightly lower quality, they are much more affordable

than any of Teslas options. In addition, Tesla competes with other luxury car brands because of
their quality and high prices. The unique selling proposition that Tesla has over their competitors

is that they are currently the only fully electric automobiles with long distance range, giving

Tesla a competitive edge.

Target Markets

Teslas primary target market consists of upper middle class males with a household income of

over $100,000 annually, and an age ranging from 30-60 years old (Gene, 2016). Please refer to

the attachments below for a percentage breakdown of the primary target markets, gender, and

estimated income. Teslas secondary market is Millennials, with an age ranging from 18-29. The

more affordable Model 3 is projected to be very popular amongst this market (Korosec, 2015).

The tertiary target is a broader market, aimed at individuals and families who are conscious of

the effect of gasoline vehicles on the environment and overall environmental safety. The main

goal for all three of these target markets is to provide stylish, luxury, energy efficient vehicles.

Summary

As explained in the sections above, Tesla faces some challenges as it transitions the world to

sustainable energy. Tesla struggles with marketing its cars as it has very few retail centers,

service centers, and charging stations (Gardner, 2016). Additionally, Tesla fears their customers

will have a misperception of their new Model 3 vehicle. Despite these challenges, Tesla

continues to pursue its mission. They take the lead in luxury energy cars and now are entering

the market for affordable energy cars, as well. With their strengths in innovation and growth,

Tesla is likely to overcome their challenges and remain a leader in their industry.
 Attachments
Attachement 1 :

Attachment 2 :

SWOTT Diagram :
 References
About Tesla. Retrieved September 15, 2017, from https://www.tesla.com/about
Gardner, G. (2016, April 10). Tesla faces five big challenges. Retrieved September 16, 2017,
from https://www.usatoday.com/story/money/cars/2016/04/10/tesla-faces-five-big-
challenges/82859740/
Gene (2016, September 26). A look at who's buying Tesla's Model X: younger, richer, and
outside of CA. Retrieved September 17, 2017, from http://www.teslarati.com/tesla-
model-x-demographic-buyers-younger-richer-not-all-ca/
Korosec, K. (2015, July 30). Tesla has a new kind of customer: The middle-class Millennial.
Retrieved September 17, 2017, from http://fortune.com/2015/07/29/tesla-millennials/
LeClair, M. (2016, August). IBISWorld Industry Report OD4499. Lithium Battery
Manufacturing Industry in the US. Retrieved from IBISWorld database.
McCown, B. A. (2015, April 27). Tesla And Energy Storage: The Race To Power The Future.
Retrieved September 17, 2017, from
https://www.forbes.com/sites/brighammccown/2015/04/23/energy-storage-powering-the-
future/
Morris, D. Z. (2017, August 6). Where Are All of These Electric Cars Going to Charge?
Retrieved September 17, 2017, from http://fortune.com/2017/08/06/electric-car-charging-
points/
Muoio, D. (2017, May 26). Tesla just deployed a new marketing strategy to avoid
misperceptions about its long-awaited Model 3. Retrieved September 16, 2017, from
http://www.businessinsider.com/tesla-model-3-marketing-strategy-2017-5
Peters, I. (2017, July). IBISWorld Industry Report 33611a. Car & Automobile Manufacturing in
the US. Retrieved from IBISWorld database.
Trefis Team. (2015, July 2). Teslas unique position in the car market is one of its biggest
strengths. Retrieved September 17, 2017, from
https://www.forbes.com/sites/greatspeculations/2015/07/02/teslas-unique-position-in-the-
car-market-is-one-of-its-biggest-strengths/#19c514a33ad7