11.3 Industry analysis The electric vehicles market

The Automotive Industry

This section discusses the automotive industry and how Tesla aims to penetrate the market.

Tesla's Approach to the Market

• Tesla is not directly trying to compete with traditional automakers in the mature automotive market.

• Instead, Tesla focuses on the electric vehicle (EV) market, which can be considered as an industry of its own.

• By specializing in EVs, Tesla has created a niche for itself within the automobile industry.

Development Stages of Electric Vehicles

• The introduction stage of EVs involved technological stabilization and multiple product iterations.

• In 2003, when Tesla was founded, the industry was in its introduction phase with mostly low-speed electric vehicles.

• Tesla's first product, the Roadster sports car released in 2008, went through several challenges and iterations.

• Initially, Tesla attempted to convert a Lotus Elise chassis but faced difficulties with technology and weight distribution.

• The final version of the Roadster had minimal parts in common with other devices at that time.

Growth Stage of Electric Vehicles

• Over time, Tesla introduced successful car models like Model S, Model X, and Model 3.

• In 2017 alone, they delivered over 100 thousand vehicles of Model S and Model X.

• This indicates that the electric car industry is entering its growth stage of development.

• However, there are still limited good products offered on the market due to high prices and few competitors.

Competition and Future Outlook

• Traditional car producers like BMW and Volkswagen have announced their focus on electric vehicles.

• Sales are expected to grow rapidly over the next five to ten years in the electric vehicle industry.

• To become profitable and compete effectively in this growing market, Tesla needs to claim a larger portion of it.

Tesla's Competitive Advantages

This section highlights Tesla's competitive advantages as a first mover in the electric vehicle market.

First Mover Advantage

• Being the first major auto producer with a complete focus on electric vehicles gives Tesla a significant advantage.

• Elon Musk emphasized that the only previous U.S. car producer startup company that did not fail was founded by him.

Conclusion

Tesla has strategically positioned itself in the electric vehicle market, which is considered an industry of its own. By focusing solely on EVs, Tesla has created a niche and gained a first-mover advantage. As the industry enters its growth stage, competition is expected to increase, but Tesla's early entry and technological expertise give it a strong position for future success.