Tesla: Plug-in Hybrid and Electric Car

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Tesla Motors
Norbert Binkiewicz

Justin Chen
June 4, 2008

Matt Czubakowski

1

SWOT Analysis

Strengths





Good engineering and technology research capability
Able to raise large amounts of capital
First mover advantage; the first company to offer a relatively practical fully electric car, customers include high-profile figures like Arnold Schwarzenegger, George Clooney, and Jay Leno
Designs and builds many of the components in its cars, including the power electronics, motor and battery packs

Weaknesses





Doesn’t have much brand recognition among the general public A very small company with small sales volume, so no economies of scale Possible supply problems with components, especially if demand increases The Tesla Roadster hasn’t been on the market for very long, the longevity of fully electric cars remains to be proven

Opportunities




Moving towards the family sedan market and making a product that is meant for more of the automotive market
Price of oil and gasoline skyrocketing, making the price premium for an electric car less of an issue
Expanding into developing lithium-ion batteries and other energy technologies, partnering with a battery company to improve battery technology

Threats





Wrightspeed X1, a prototype high performance electric car that caters to the same market; the only direct competitor to Tesla that offers a similar product Large automobile companies entering the market with full and hybrid electric cars, the GM Volt and Toyota Prius

The price of oil falling dramatically in the short run
A competitor having a breakthrough in related energy technologies, like hydrogen powered cars, natural gas, or ethanol

2

2

Six Force Analysis

Competitors


WrightSpeed X1 – small two-seater performance electric car based on existing design, meant for enthusiasts rather than daily drivers

Entrants




Large mass-market manufacturers (Chevrolet, GM, Toyota)
Luxury performance sports cars (BMW, Porsche, Mercedes)
Other boutique manufacturers (Italians, Aston Martin, etc.)

Rivalry


Low; high entry barrier, market sector is niche and largely untouched

Buyers



Individuals
o Bargaining Power: Little, since demand is very high
Licensees for EV technology
o Bargaining Power: Unknown

Suppliers







Battery Companies
o Bargaining Power: Low, since Tesla buys Li-ion cells from many different manufacturers
Engine Manufacturer (In-house)
Chassis/Engineering (Lotus)
o Bargaining Power: High, exclusive partnership, no clear alternative for current market
Transmission (In-house, previously Magna)
o Bargaining Power: Supplier failed, now production in-house Magna lawsuit [7]
Patent license (AC Propulsion) [1]
o Bargaining power: high, as Tesla develops motors, power electronics, etc. using AC's tech

Substitutes


Hybrids (plug-in and otherwise)
o Toyota FT-HS
o BMW 1 and 3 series (mild hybrids)
3




Small performance turbodiesels
Small non-hybrid sports cars
o Mazda Miata
o BMW Z4
o Honda S2000

Complements








3

CAFE Standards – must be 35mpg fleetwide by 2020
High oil prices – now at $125/barrel
Low electricity prices
Solar/renewable power
Dealerships/service centers
Electric "gas stations", home power stations
Tax/parking incentives – similar to hybrid tax breaks
Battery technology

Analysis of Competitor Strategies

Toyota Motor Company
Tesla Motor’s response to Toyota Motor Company’s longstanding hybrid technology and possible entry into the plug-in hybrid and fully electric car market: •









Toyota’s Prius first took the road in Japan in 1997, arrived in America in 2000, making it the most prevalent hybrid car.
As of September 2007, 430,000 have been sold in the US alone Toyota’s hybrid technology has been applied to a wide range of cars, ranging from the $21,000 Prius to the Lexus flagship...
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