Porter's Five Forces Analysis Of Tesla

US auto industry is full of auto manufacturing companies, BMW Group, Chrysler/Dodge/Jeep, Ford Motors, General Motors, Honda/Acura, Hyundai/Kia, Mazda, Nissan, Subaru are the main competitors in US Auto market.

For 2012 as a whole, automakers sold approximately 14.5 million vehicles in the U.S. Market, a 13 percent increase from 2011 and the highest annual sales total since 2007 marking the third consecutive year of annual sales increases of at least 10 percent.

As fuel prices remain high and there is greater concern for the environment, more energy efficient cars are increasing in demand.

Global automobile sales forecasts project divergent market penetration rates of approximately 0.6 -0.9% for plugin hybrid electric vehicles (PHEVs) by 2015,

Market

Tesla’s long-term strategic goal is to create affordable mass market electric vehicles (EV). In order to achieve that goal it will increase the number and variety of EVs available to mainstream consumers by Selling it’s own vehicles in a growing number of company-owned showrooms and online. Selling patented electric powertrain components to other manufacturers and serving as a catalyst and positive example to other automakers.

Competitive advantage is the low cost of Tesla’s battery pack, which allow to sell the Model S at a reasonable price but with near-normal (up to) 300 mile range, a combination other EVs have yet to deliver.

Tesla Model S battery pack costs will be at/below ~$300/kWh, well below from other OEMs/battery makers ($500-600/kWh for 2011-2012 timeframe, and $375-500/kWh mid-decade target)

A key source of Tesla’s cost advantage is its ability to apply commoditized small cylindrical lithium cells (used in consumer electronics) to a car via proprietary thermal/power management.

It also has a comprehensive, proprietary technology with 40 patents awarded & over 200 patent applications

This would cut into Tesla’s plans to offer fully electric sedans at different price points.

Tesla should focus on improving their technological advantage in fully electric cars so that by the time Toyota enters the electric car market, Tesla has a technological Advantage.

BMW

Tesla’s one of the potential competitor is BMW, which continues to put effort into entering the luxury, high-performance, low-emissions, low-consumption auto market.

In august it unveiled the production version of the i3. The company’s first all-electric series production vehicle will be available next year some time before june and at a seriously competitive price

Moreover, the i3 is not merely but the first of a line of EV’s planned to deliver “individual mobility” – that’s what the “i” brand stand for.

BMW has designed and build its own electric motors for its models.

Daimler AG

The Mercedes-Benz B-Class Electric Drive will go on sale in the US and Europe from early next year. Most of the systems that charge and run the little B-Class will be shared with the upcoming SLS AMG Coupe