Tesla Case

Reading Note

Tesla Motors Inc. is an automotive company, which was established in 2003 by a group of Silicon Valley engineers who wanted to develop electric vehicles. In 2013 was a great year for Tesla, they outsold Nissan and GM in electric cars and their Model S had sold more that BMW 7series and Audi A8. Tesla applies product innovation by designing only electric cars underlining characteristics as long driving range, sportive performance and design. So, apparently, a different niche market than big companies, such as BMW and Audi that compete in mass market. Actually, also observing the previous mentioned results, Tesla is already a competitor in luxury segment of car market; in addition to that car industry could change very fast, for example the core technology could switch from I.G. engine to electric engine boost by a new better electric battery technology. Moreover Tesla has set up different alliances with major industries (supplier, original manufacturers and R&D), it has already now a good production capacity and probably, more “know-how” in electric cars than competitors. Due to this facts both BMW and Audi (and other competitors) shouldn’t underestimate the Tesla value. In the other side, for Tesla these collaborations could contain dangerous risks because in future these partners could become direct competitors, it has to be careful in choosing partners and strategies. Regarding the secret future intention of Tesla, I think that in car market the level of competition is extremely high, it would be very difficult for a start-up company to penetrate the market, but in my opinion this plan could be a good choice, if Tesla are able to apply a similar price than competitor maintaining these quality standards it will take a good market share. More over medium sector (3series, A4) attract more customers permitting Tesla to improve selling numbers and brand awareness.