Tesla Situation Analysis/Marketing Plan Paper
MKT 304 – 13548
Team Number: S11
Team Members
Zaynah Baig
Sebastian Lopez
Ismael Ruano-Cervantes
Huy Duong
Kenner Guerra
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Table of Contents
Executive Summary……………………………………………………………………………4-5
Company………………………………………………………………………………………….6
Company Description………………………………………………………………...……6
Tesla SWOT Analysis…………………………………………………………………………7-10
Tesla’s Strength………………………………………………………………………….7,8
Tesla’s Weaknesses……………………………………………………………….……….8
Tesla’s Opportunities…………………………………………………………………….. 9
Tesla’s Threats………………………………………………………….………………9,10
Competitor SWOT Analysis……………………………………...…………………………10-15
Competitor SWOT Analysis (BMW)……………………………………………...………..10-12
BMW’s Strengths……………………………………………………………………..10,11
BMW’s Weaknesses………………………………………………………….…………..11
BMW’s Opportunities……………………………………………………..……………..12
BMW’s Threats…………………………………………………………….…………….12
Competitor SWOT Analysis (Toyota)………………………………………….…………..12-15
Toyota’s Strengths………………………………………………………….…………….13
Toyota’s Weaknesses…………………………………………………………..…………13
Toyota’s Opportunities ……………………………………………………….………….14
Toyota’s Threats…………………………………………………………………...….14,15
Customer Analysis…………………………………………………………………………..15-17
Segmentations……………………………………………………………..………….15,16
Wants and Needs…………………………………………………………..………….16,17
Marketing and Product Objectives…………………………………………….…………..17-19
Current Market……………………………………………………………...……………17
Target Market…………………………………………………………………………17,18
New Product……………………………………………………………………………..18
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Positioning……………………………………………………………………………….19
Perceptual Map…………………………………………………………….……………..19
Product……………………………………………………………………………...……….20-21
Unique Attributes and Benefits…………………………………………………………..20
Potential Impact…………………………………………………………………...……..21
Pricing………………………………………………………………………………………..21-22
Pricing Strategy……………………………………………………………………….….21
Specific Price………………………………………………………………………….....22
Promotion………………………………………………………………………...………….22-25
Commercial Advertising……………………………………………………………...23,24
Public Relations Strategies………………………………………………….………...24,25
Place………………………………………………….……………………………….……...25-26
Place Distribution Strategy………………………………….……………….……….25,26
Organization……………………………………………………………………….………..26-27
Implementation Plan…………………………………………………………………….….27-28
Works Cited………………………………………………………………………...………..29-35
Appendix…………………………………………………………………………………….35-36
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Executive Summary
Tesla Inc. has become a leader in the EV market and it comes with the rise in individuals
trying to buy environmentally friendly vehicles. Tesla has been able to offer four different
models, the Model 3, Y, S, and X. Tesla’s great marketing strategy of delivering products that are
safe, affordable, and deliver great experiences when driving has allowed them to be talked about
everywhere. Tesla is not only in the present in the automotive industry, but they are also part of
the energy generation and storage industry. This has allowed them to conduct large amounts of
research and development as well which has helped with developing many of their products.
Their mission of making sure they deliver great experiences while creating a sustainable car has
allowed them to keep a foot ahead of the competition.
Tesla’s strengths in R&D have helped them create powertrains and energy storage
systems like their battery pack system which allow them to drive further distances, charge at a
faster rate, and be less expensive when charging. Of course, they have also had weaknesses that
include the problem of having vehicles being recalled which can lead to a bad reputation for
safety, and having high operation cost, but this hasn’t stopped them from creating innovative
products.
Companies have become socially responsible with the topic of offering environmentally
friendly cars, and this has allowed for competitors like BMW and Toyota to compete against
Tesla. BMW being a luxury brand has allowed them to cater to the wealthy, but their large
investment in R&D has also allowed them to compete against Tesla.
Consumers play a big part in whether you become successful in selling, and knowing
exactly who to target or who is buying your product can help determine if you succeed. The
majority of these electric vehicle purchases are being made by male customers between the ages
of 25-34. Tesla has been seen as a brand that sells expensive electric vehicles and only wealthy
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people are the ones who drive them, but now with the reduction of prices, it has enabled others to
be able to afford them.
Tesla’s expansion has also enabled them to create new models like the fully electric semitrucks and the Roadster. This has opened the door for the idea of combining their solar energy
company with their current electric vehicles, and possibly creating a model that can run solar
panel roof tops that allow drivers to charge their vehicles on the go, which would allow for
improved mileage compared to their previous models. The product being named Sol-Active E
would be targeted for the wealthy and or middle class looking for a model that is higher in price
($98,842) compared to current models due to the fact that it offers better mileage and a new innovative
product with better technology for supplying energy.
In order for the Sol-Active E to thrive Tesla’s best options to promote the new model
would be to use their good brand name to enhance their public relations as well as dive into the
world of advertisements. Tesla isn’t known for running advertisements but it would be great for
Tesla to reach more people during events like the Super Bowl to showcase an upcoming model.
Tesla would be able to continue to sell their vehicles directly through their company owned
stores. Tesla offers a great option of ordering online and picking up as an option which would
help. Tesla would first offer the Sol-Active E by having a limited number of cars available for
pre-order. During the year of 2025 the first round of production would take place in which Tesla
can see how well their first round of cars perform within the U.S. in certain states to see if they
can take this model abroad and cater to other countries. Tesla during the year of 2025 would be
able to promote, do test runs, and deliver their product by December 2025 to see how well the
model is performing and make any improvements to the car based on feedback received.
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Company Description
It is no surprise that with the rise of technological advancement and sustainability, many
automobile makers have chosen to invest into manufacturing electric vehicles. Tesla Inc. is a
company that has had great success with its electric vehicles and has been able to achieve great
success compared to other automobile companies. According to Tesla Inc.’s 10-K 2022 report,
they design and manufacture fully electric vehicles, solar energy generation systems, and energy
storage products. They are currently operating in two segments, being the automotive and energy
generation and storage. They currently offer four different models, the Model 3, Y, S, and X.
These different models are all four door vehicles that compete with large and mid-sized sedans,
as well as many of the SUVs in the current markets. They have been in the early works of other
models which would include a fully electric semi-truck, a Cybertruck, and the Roadster. Tesla
was first founded in 2003 in San Carlos California. It was able to conduct many of its operations
in Palo Alto but with the introduction of the Texas Gigafactory, it made a move to Texas in 2021.
Tesla has been able to sell their vehicles not only in the United States, but they have also been
able to sell them in Asia and Europe. Their affordable prices, and simple car designs have led
them to be one of the leaders in the EV industry, because they were one of the first ones to
introduce such an idea, and market their cars without having to do the traditional marketing.
They have been able to attract many of the customers with word-of-mouth marketing because
they have established a brand that’s focus is being electric while also being able to deliver an
experience when using their products. The experience someone gets when riding in their cars is
not very common, especially when they offer the ability to have the car drive itself to a
destination of your choice. The idea of self-driving cars is what has also made them standout
from many competitors in the automotive industry.
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Tesla SWOT Analysis
Internal
External
Pros
Cons
Strengths
Weaknesses
Focus on R&D
Cost Inefficiency
Robust Powertrain Technologies
Product Recalls
Opportunities
Threats
Increasing Demand for Energy
Environmental Regulations
Positive Outlook on the US Automotive
Rapidly Changing Technology
Industry
Strengths
Focus on R&D: Tesla utilizes its extensive research and development (R&D) potential to launch
new and innovative products. Its core skills include powertrain engineering, vehicle engineering,
innovative manufacturing, and energy storage. Its R&D activities focus on the development of
manufacturing processes, Model S cost reductions, right-hand drive Model S (TSLA, 2018).
Additionally, R&D includes significant engineering and design activities carried out by the
company. This helps support new products, general development, other research, and
development activities previously mentioned. Tesla carries out these R&D activities at their Palo
Alto facility in California.
Robust Powertrain Technologies: Tesla utilizes its core skills in powertrain, vehicle
engineering, and innovative manufacturing. These utilizations allow the company to gain a
competitive advantage over its competitors. Tesla’s core intellectual property includes the
electric powertrain, which comprises the battery pack, power electronics, motor, gearbox, and
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control software (TSLA, 2018). Tesla’s battery pack system stores a significant amount of energy
to power and run their electric vehicles. The battery pack has a modular design, enabling it to
advance technological developments for various vehicles and other products. The electric
powertrain includes power electronics which can manage the flow of electrical current
throughout the vehicle. Moreover, the powertrain has intricate control software that can monitor
the performance and safety of its own system. Tesla’s powertrain and battery pack inculcate a
modular design, which enables next generation electric vehicles to integrate this technology
(TSLA, 2018).
Weaknesses
Cost Inefficiency: Tesla had reported in FY2017 that they received a decline in its cost
efficiency, which can affect their operational efficiency. The company reported an increase in its
operating costs as a percentage of sales, which stood at 113.8% in FY2017, as compared to
109.5% in FY2016 (TSLA, 2018). As the result of this decline, Tesla reported a decrease in their
operating margins. This is due to the increase in operating costs. This increase could be due to
72.9% increase in selling/general/admin expenses to US$2,476.5 million in FY2017 from
US$1,432.1 million in FY2016 (TSLA, 2018).
Product Recalls: A major impact on the brand’s image of Tesla could be its product recalls. This
will also increase operational costs, as Tesla has to bear the costs involved with worldwide
recalls, further with the loss of sales of the product during the recall period. In March 2018, the
company recalled 123,000 Model S vehicles (TSLA, 2018). The reason for this recall was an
issue with the power steering component. There was extreme corrosion in the power steering
bolts of the vehicles concerned. With the result of this recall, Tesla’s shares fell nearly 4% afterhours of the announcement.
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Opportunities
Increasing Demand for Energy: There has been a global demand for energy which may lead to
a potential increase in demand for products and services to build energy infrastructure, which
could contribute to the growth for companies such as Tesla. According to the World Energy
Outlook published by the International Energy Agency (IEA), in 2040 the global energy
requirement will approximately increase by 30%. Countries such as China, India, Latin America,
etc. are likely to drive that demand. In addition, it is estimated that an investment of US$44
trillion is required for the global energy supply with an additional US$23 trillion in
improvements in energy efficiency (TSLA, 2018).
Positive Outlook of the US Automotive Industry: A positive outlook from the US automotive
industry has allowed Tesla to gain opportunities across its operating markets. From industry
estimates, there has also been an expected sales of cars, SUVs, and light trucks to be stronger in
2018 than in previous year. Automakers have also been expected to sell 16.9 million light
vehicles in the US in 2018. The company’s Model 3 demand is towering, with over 400,000 preorders. It is expected that 200,000 Model 3 deliveries will be made in 2018 (TSLA, 2018).
Threats
Environmental Regulations: As an automotive manufacturer, Tesla is subject to environmental,
health and safety laws and regulations at numerous levels, including laws relating to the use,
handling, storage, disposal and human exposure to hazardous materials, both in the US and
international markets (TSLA, 2018). The costs of compliance, including remediating
contamination if any is found on the company’s properties, and of any changes to the operations
mandated by new laws or amendments to existing laws may be significant (TSLA, 2018). Tesla
could face delays in obtaining necessary permits and approvals required by such laws with
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manufacturing facilities, so this could impede the operation of these facilities. If Tesla violates
any of these laws, it may result in significant fines and penalties, remediation costs, third party
damages, or a suspension of cessation of the operations.
Rapidly Changing Technology: Since Tesla participates in the automobile manufacturing
market, they are subject to rapid technological changes. This can cause existing products or
products under development to become obsolete or unmarketable due to new technologies and
adoption of new industry standards. In this scenario, to compete effectively, the company must
continuously innovate and introduce new products that gain market acceptance (TSLA, 2018).
Tesla’s business may be negatively affected unless they understand the customers’ requirements
and adapt to approaching technologies in the market and introduce new products and solutions.
Competitor SWOT Analysis
Competitor SWOT Analysis: BMW
BMW Group was established in 1916 in Germany and is a leading premium motor
vehicle supplier. BMW Group has four brands including BMW and Rolls-Royce. They strive to
“become the world's leading provider of premium products and premium services for individual
mobility,” (BMW Group, 2020). In 2013, BMW Group introduced its first all-electric car called
the BMW i3.
Strengths
Position in premium motor vehicle market- BMW group holds a strong position in the
premium motor vehicle market internationally they even call themselves “a leader in the
premium sector” (BMW Group, 2022). Their automotive segments are as follows, BMW, Mini,
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and Rolls-Royce. Their deliveries for BMWs alone in 2022 which totaled 2.1 million. Not to
mention their EV deliveries have grown to 83,949, about a 7.6 percent increase in the quarter
(Automotive News, 2023).
Research and Development- BMW Group places a huge importance on research and
development to further improve their products. Their commitment to R&D can be observed by
their 2020 press release announcing their 30-billion-euro investment (almost 3.2 billion USD) to
“future oriented technologies” until 2025 (BMW Group, 2020). Part of this development is
already in motion as they announced in the same press release; that they have secured the
materials for improvements in their EVs.
Weaknesses
Recalling products- Product recalls can cause issues for any company but very recently
BMW group has had an issue with airbags. The airbag issue has arisen in older BMW vehicles
like the 3 and 5 series. The air bags' exposure to heat and humidity has caused the airbags to
explode, causing injuries and even deaths (NHTSA, 2023). Another recent recall within the same
year occurred due to an audio module software failure. The recall is effective for newer models
such as the 330i and 330i xDrive. This failure does not allow the driver to be given a warning to
fasten their seatbelt. (USAToday, 2023). Frequent recalls like these do not allow for there to be
much trust between the company and their customers.
Unfunded Pension Plans- An unfunded pension plan is when the company takes out
money from current assets to pay out the retired employees as pension. This is different from a
funded pension plan where funds are set aside and invested in future retired employees. BMW
Group provides unfunded pension plans for their workers which is riskier than funded plans,
since unfunded counts as a liability. It also affects the company’s liquidity.
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Opportunities
The market for EVs is growing- Electric vehicles are becoming more in demand as an
interest in sustainability and cost efficiency has risen. According to JD Power electric vehicles
rose about 83 percent in the year 2020, which was aided by the increase in accessibility to
charging stations and better batteries. (J.D. Power, 2023)
Launch of new products- As a part of the group’s plans to advance within the electric
vehicle industry the MINI Electric was released in 2020. It has been rated as number one in
ownership experience when it comes to mass market electric vehicles by J.D. Power. (Mini USA,
2023). BMW group also recently announced the Rolls Royce Spectre and calls itself the “world’s
first ultra-luxury electric super coupe” (Rolls Royce Motorcars, 2023). With the highly
anticipated release of the Spectre and the MINI Electric’s great reputation so far BMW Group’s
new product launches seem to be going well.
Threats
A lot of market competition- The auto industry is growing more and more competitive,
especially the new and rapidly growing electric vehicle market. One of BMW Group’s biggest
competitors is Mercedes. Both companies are luxury or premium manufacturers, and mostly
target the same audience. Not to mention Mercedes is also trying to break into the EV market
with their recent launch, the Concept CLA Class. Other BMW competitors include Audi and
Tesla. Competition increasing can make it harder for BMW Group to stand out from its
competitors.
Competitor SWOT Analysis: Toyota
Toyota Motor Corporation is an auto manufacturer that was founded in Japan in 1937.
Today they have grown into the #1 retail brand in the U.S. according to their website. (Toyota
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USA, 2020). Toyota Motor Corp owns two major brands in the U.S.: Toyota and Lexus, as well
as various brands in Japan. Recently in 2021, Toyota Corporation released two battery electric
vehicles: Toyota bZ4X and Lexus RZ (Toyota, 2021).
Strengths
Brand Image- Toyota Corp. has a strong brand image specifically with their Toyota
brand. Their philosophy is “you are what drives us” and claim that they “create vehicles by
listening and responding to you” (Toyota, 2023). This image asserts that the brand is a reliable
consumer oriented one. In 2022 J.D. Power awarded the brand with both a quality award and two
dependability awards. (J.D. Power, 2022). Creating a strong brand image such as this one creates
value for consumers.
Profitability- Toyota’s profitability in Quarter 2 of 2023 reached a new high in profits
showing just how profitable the company is. Although analysts projected 880 billion yen (about
587 million USD), they reached a reported 1 trillion yen (about 6.6 billion USD), causing a 2.5
percent rise in shares as well. (NADA, 2023)
Weaknesses
Trade Receivables- Trade receivables, better known as account receivables, represent
how much customers owe a company. Based on Toyota Motor Corporation’s financial summary
2023, their accounts receivable is equal to about 55 billion USD (Toyota, 2023). Having such a
high account receivable is not a good thing, many customers owe you and it means that Toyota
Corp is at risk. It can lead to being severely short on cash. (PNC Bank, 2023)
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Opportunities
Manufacturing Market- As the auto industry continues to grow it represents a good
opportunity for Toyota Corporation. The company manages several brands and has 14
manufacturing plants in the United States and about 32,000 employees. (Toyota, 2023). The
company has also stated they are committed to “assembling vehicles where they are sold”, this
benefits them not only financially but also helps them understand their customers better (Toyota,
2023). There is also the growing EV market which according to IEA had its sales increase by 55
percent in 2022. (IEA, 2023).
Threats
Environmental Regulations- Increasing environmental regulations are impacting not just
Toyota Corp. but many companies across the auto industry. Many regulations mainly aim to limit
carbon emissions. According to the U.S. EPA “A typical passenger vehicle emits about 4.6 metric
tons of CO2 per year” (U.S. EPA, 2023). Lawmakers want to push for more EVs, as they do not
emit CO2 when being used. For example, recently the Biden Administration wanted to push for
two-thirds of new passenger cars sales in the U.S be electric by the year 2032. For companies
like Toyota this seemed unrealistic (New York Times 2023).
Technological Advancements- Along with the auto industry experiencing major growth it
means there are huge advancements being made in technology. As competition grows more
intense, it is not easy to predict how technology will change by the time a company like Toyota
Motor Corporation may want to launch a new product.
Competitor Gaps and Industry Trends: Toyota & BMW
One industry trend that can be noted is the rise in demand for electric vehicles. As stated
previously the sales of EVs have been increasing (IEA, 2023). Due to this trend companies are
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taking notice and attempting to enter the EV market. There are some gaps that can be identified
when it comes to the EV market and the companies Toyota Corp and BMW Group. Both are
having a tough time catching up to the dominating force in the EV market, Tesla. Toyota is still
missing key factors to help catch it up. These include an advanced battery and a specific
production site (Automotive News, 2023). BMW is also competing as Tesla is threatening to
overtake their position in the luxury vehicle market (Automotive News, 2022). Both BMW and
Toyota have well established consumer bases but as the demand for EVs increases it is creating
gaps that they may find difficult to fill.
Customer Analysis
When it comes to customer analysis, there are three key components: understanding
consumer characteristics, segmenting the market, staying informed about the industry
trends. In the context of Tesla, their customer base is quite diverse, spanning from Generation X
to Generation Z.
Segmentations
With Tesla being in a very competitive industry, the EV industry it’s no question
why they must stand out from their fellow competition. EV consumers represent a wide range
of demographics, socioeconomic, and behavioral characteristics. Demographically speaking,
most EV consumers happen to be male. Benjamin K. Sovacool said, “In our findings,
gender is a constant and significant influence in relation to car use.” In his findings, he found
that only 15.4% of women have experience driving an EV compared to 28.7% of males. (Global
Environmental Change 2018)
According to the research conducted by Benjamin K. Sovacool the percentage of males who
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drive further distances a day are higher than that of females. (Global Environmental Change
2018) This information supports the idea that since men drive further distances than women an
EV vehicle is more appealing to them. EV buyers can also be segmented into different age
groups. A person’s age can heavily influence their preference for EVs. That is why EV
companies, especially Tesla, try to target all age groups from the tech-savvy millennials to the
more seasoned professionals. According to the research done by Benjamin K. Sovacool, people
ages 25-34 have a higher interest in EVs than those older. (Global Environmental Change 2018)
This is due to the younger generation being more knowledgeable about the health of the
environment and being more tech-savvy than the older Generation which makes learning how to
drive an EV a lot easier for them. Another reason why EVs are more appealing to the younger
generation than it is to the older generation would be because the younger generation tends to
drive further distances than the older.
Wants and Needs
Now that we understand how the EV market is segmented, we can move on to the
customer's wants and needs. Generation Z and Millennials have a different approach to
satisfying their wants and needs compared to the older generation. With the younger
generation being more technology-oriented it’s no surprise that they are looking for a
EV vehicle that has state of the art technology and self-driving capabilities to accommodate
their needs. Besides being technology-oriented young consumers tend to prefer a vehicle
that is high performance and fast over one that is safe. The opposite can be said about the older
generation since the older generation most likely has kids or grandchildren so they need a
vehicle that can keep them and their family members safe. EV vehicles strike a great balance
between high speed and performance but at the same time providing great safety features to
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ensure a driver's safety. Although the older and younger generations may differ in their wants
and needs one similarity they both share is that both of them want to ultimately help the
environment and for them to do so they need a vehicle that uses clean fuel that doesn’t
damage the environment. With gas prices continuing to rise and EVs becoming cheaper and
more accessible to everyone consumers are slowly making the transition over to EV vehicles.
This is where Tesla stands out from its competition in this aspect as one of the company's goals
is to strike for a sustainable future. According to Tesla, in 2022 their customers avoided
releasing about 13.4 million metric tons of CO2 into the atmosphere. Their goal is to keep on
increasing this number over the years and their consumers feel the same way and are with them
in achieving this goal.
Marketing and Product Objectives
Current Market
Tesla’s current market consists of EV (Electric Vehicles) with its most popular and
common vehicle being the Model Y. They have been leaning on making more sedan and SUV
type of vehicles to match their demographic groups. With their demographics in mind, Tesla was
more of a middle/upper class luxury as it was priced high. Now with changes and price
deductions, Telsa has been in the eyes of the lower/middle class as the release of the Model 3 has
been more targeted towards the younger audience and Model Y towards the older generation.
The current market has been beneficial to Tesla in cities where there aren’t too many EV
companies as they have the majority of the market. Additionally, Tesla’s market has captivated
those who are tired of paying so much for gas and are switching over to electric vehicles.
Target Market
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Tesla’s target market has changed over the years as the global economy changes. Tesla is
targeting the lower/middle class and with the release of the Model 3, it has been a success as it is
the most affordable electric vehicle Tesla has to offer. It has the ability to target those who are
searching to be more environmentally friendly with reducing air pollution and the increase of
CO2 emissions. Not only those who wish to save the planet but those who want a long-term cost
effectiveness vehicle since fuel efficient cars are beginning to be more and more expensive with
maintenance and fuel. With this target audience in mind Tesla has to make plans to move its
inventory into countries where EV has not been touched. In an article, where India wants to
move into EV transportation, Tesla can monopolize this opportunity and have a new market to
resource out of (TeslaDrops,2023).
New Product
With Tesla being a Solar/Electric company, making a hybrid vehicle with these two
categories is possible. A new and improved dual hybrid vehicle named: Tesla Sol-Active E (Solar
Active Energy). With this new vehicle it has the capability to be used with its current electric
power source, but it has additional solar energy added on. It will consist of two electric batteries
and one big battery in the front of the car for solar energy. Solar panels will be added to the glass
roof that standard Tesla’s come with as well as a few on the front and rear windshields. The
panels will help power the primary battery and have the car run on solar energy with the option
of switching to or between electric/solar. This would greatly improve the cost of paying for
charging the vehicle as well as more milage on single use. Of course, with technology
improving, in its later years of production it can be converted to solely solar. With this new
product in mind, its target audience would lean more toward the older generation as they are
more aware of the environment and cost of living. This new product would change the current
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market as well as be more targeted for the upper classes as it will be higher priced than current
Tesla’s. The Model 3 would be targeted for the lower class, the Model Y, X for the middle class
and the Model S Plaid/New Tesla Sol-Active E for the upper class. This way Tesla has an
opportunity to have its range from the lower class to the higher class with each having a based
vehicle tailored to their suiting.
Positioning
Tesla, in creating modern yet affordable vehicles, has had an impact on our economic
status all while keeping things environmentally friendly. With incredible service all year round, it
stands out in the economic/eco-friendly part of the market. Its current vehicles would stand in the
Inexpensive/Eco Friendly side while the new Tesla Sol-Active E would stand in the
Expensive/Eco Friendly side competing with the likes of Audi’s Q8 E-Tron.
Perceptual Map:
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Product
Tesla Sol-Active E’s Unique Product Attributes
•
Revised Redesign
- Solar Panels along the roof and windshields
- Sleek new body and upgraded components
- Luxurious, all leather interior with ambient lighting
•
Benefits of Electric and Solar Motors
- More mileage ranges
- Less cost of recharging
- More power and efficiency
•
Daily Driving Consistency
- Improved autopilot, auto parking and summon
- Practical yet efficient
- Great for daily driving and travel
Tesla’s new and improved dual hybrid vehicle will take the spotlight amongst its electric
motor competitors. Tesla Sol-Active E (Solar Active Energy) is a vehicle in which its power
comes from electric and solar energy. It will consist of a new sleek and modernized design along
with new solar panels embedded on the roof and windshields of the vehicle. Along with its
current electric motors, a solar captivating battery will accompany them giving the driver the
option to switch between the motors or use them all together. This can be great for daily driving
as it has a great mileage range and good power to go with it. Along with its capability, its
comfort factor will be receiving an upgrade to keep its luxury look. Its solar energy can help
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conserve electric consumption and reduce recharging expenses. With improved technology the
Tesla features such as autopilot, auto parking, and summon will be greatly improved with better
and smoother functions. Looking towards its range of consumers the Tesla Sol-Active E can have
an audience from daily driving business consumers to track and competitive racing consumers.
Tesla Sol-Active E with its capabilities and power can be put on the track to compete with its
engine competitors. This can bring in a new demographic to the company and possibly new
products and opportunities.
The Tesla Sol-Active E’s potential impact on the other products in the portfolio could
affect the Model Y and Model X Plaid. It can affect the Model X Plaid as it has three electric
motors and produces good mileage range and power with comfort. But with this new product it
can save on expenses for recharging and save on your home's light bill ( as some have the
charger at home ). With the launch of this new product, as it has similar features to the Model X
Plaid, it can potentially cannibalize it and replace it as a whole. It would be a good thing I
believe as it can change the way of electric vehicles as a whole and start a new generation of
vehicles. This would mostly affect the higher end vehicles as it would be priced highly to the
technology, time, and effectiveness put into it. Other models such as the Model 3 would not be so
affected as it's meant to stay at an affordable price for the appropriate consumers.
Pricing Strategy
With our proposed product, the Tesla Sol-Active E, we aim to appeal to a higher
socioeconomic class consumer so the best way to do that is through pricing. Through the pricing
of the product, we can establish the product as a higher class item. To obtain this, we propose the
use of “price skimming”, which sets the price of the product on the higher end to appeal to the
target market. Over time, the price of the product will drop to the market average. This pricing
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strategy is similar to methods that Tesla already uses (Atlantis Press, 2022). Considering we are
planning to introduce a new kind of product to the market we can appeal to early adopters and
loyal consumers by showing them this product is a quality one through the price.
We will look at high-end electric vehicles currently in the market to calculate an average.
Considering this is a new product we cannot use prices of existing vehicles like it to accomplish
this. Therefore, we will look at traditional EVs in the luxury market, including brands like
Mercedes, Audi, and BMW. We can estimate the average to be about $86,304 (iseecars, 2023).
We did not identify a method in which a specific price could be calculated so we will use a
current Tesla product as a reference point. Currently the Tesla Model X is the highest priced EV
that Tesla has at about $111,380 (MotorTrend, 2023), using the mean between this and the
average found before we can estimate the Tesla Sol-Active E price to be $98,842.
The rate the price can decrease is based on the demand of consumers and sales over
periods of time and would be difficult to predict, but this method is best used within a short time
span. Tesla’s current practices show that prices change quite often so this method will stay in line
with company practices.
Promotion
To promote the Tesla Sol-Active E, a marketing mix of advertising and public
relations will be used. With Tesla having such a strong presence in the EV industry it won’t be
hard to introduce a new model to the masses. Advertising and public relations will be the best
methods in promoting the new Tesla vehicle as the two methods complement each other.
The first method for promoting the Tesla Sol-Active E will be advertising. Advertising
will help the Tesla Sol-Active E reach a larger audience and show people the new technology
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within the Sol-Active E. Since the Tesla Sol-Active E has new features and technology that
previous Tesla models don’t have, it is important to inform consumers about the features within
the advertising to make the new product stand out from the previous models.
within the Sol-Active E. Since the Tesla Sol-Active E has new features and technology that
previous Tesla models don’t have, it is important to inform consumers about the features
within the advertising to make the new product stand out from the previous models.
Commercial Advertising
Tesla doesn’t usually do commercial advertisements for its products but since this new
product is something innovative and revolutionary we believe a commercial will help spread the
news a lot quicker and to more people. For example, during the Super Bowl Tesla can pay for a
year for the Super Bowl the product will end up being advertised to a huge amount of people
not only the introduction stage of our product but also the growth stage. Now that our consumers
know about the product and what it does, we need good publicity to further build a presence in
our consumer's minds about our new product and why they might want to consider buying it.
Public Relationship Strategies
Charity Showcase Event
Since Tesla has always prioritized its product over its promotion we can take steps to
improve their promotion so that it can draw the attention of more consumers who are curious
about Tesla vehicles. To reveal the new Tesla Sol-Active E Tesla can hold a charity showcase
event to showcase the new model and how it is more energy efficient than any of its previous
models to date. Any proceeds generated at the event will be donated to the charity of Tesla’s
choice. This charity event will not only help to spread the word about the new Tesla Sol-Active
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E and this will also increase Tesla's brand image. At the charity event, they can compare their
new stands out from their previous ones. Once the showcase is over anyone that donated to the
Since Tesla has always prioritized its product over its promotion we can take steps to
improve their promotion so that it can draw the attention of more consumers who are curious
about Tesla vehicles. To reveal the new Tesla Sol-Active E Tesla can hold a charity showcase
event to showcase the new model and how it is more energy efficient than any of its previous
models to date. Any proceeds generated at the event will be donated to the charity of Tesla’s
choice. This charity event will not only help to spread the word about the new Tesla Sol-Active
E and this will also increase Tesla's brand image. At the charity event, they can compare their
new Tesla Sol-Active E to their previous Tesla Models to show consumers why this specific
model stands out from their previous ones. Once the showcase is over anyone that donated to the
charity will be allowed to test drive the new vehicle. This event will have a ton of people talking
about it on social media which will create a lot of buzz around the new product.
Influencers/Reviewers
Now that consumers have the Tesla Sol-Active E on their minds what is going to
convince them to buy one and try it for themselves. This is where influencers come into play.
Consumers are more likely to buy something when they hear about it from someone else. Tesla
will distribute the Tesla Sol-Active E to various influencers to test drive and review and ask for
their honest review of the car and for them to share that information with their consumers.
Reviews will show the quality of the product and help further convince consumers that they need
it. When the reviewers are given the new product to test drive they will be given several
important something in their comfort zone that will be effective as well. Strategies are built on
their strong brand image and amazing product quality. By Tesla continuing prioritize its reliance
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on social media and word-of-mouth marketing it will continue to benefit their marketing. In
conclusion, there is no such thing as perfection so that being said, Tesla can always look to better
their marketing plan by implementing new tactics or even going out of their comfort zone every
so often to attract more loyal consumers who share a common desire with Tesla which is a more
sustainable future.
Advertising and Public Relations are crucial in an effective marketing plan and Tesla
understands this and that is why they stand out from their competitors. Tesla’s advertising
strategies are built on their strong brand image and amazing product quality. By Tesla
continuing prioritize its reliance on social media and word-of-mouth marketing it will continue
to benefit their marketing. In conclusion, there is no such thing as perfection so that being said,
Tesla can always look to better their marketing plan by implementing new tactics or even going
out of their comfort zone every so often to attract more loyal consumers who share a common
desire with Tesla which is a more sustainable future.
Place (Distribution) Strategy:
The Direct-to-Consumer distribution strategy will be the most effective distribution
implementation for Tesla. What this distribution strategy means is that Tesla is able to directly
sell their electric vehicles to their customers, primarily through their website and company
owned stores. This negates the reliance on selling vehicles through dealerships that their
competitors do. This strategy allows Tesla to have more control over their sales process,
customer experience, and pricing. Tesla is able to generate higher profit margins since Tesla does
not need to share profits with intermediaries (Cuofano, 2023).
By continuing to make the Direct-to-Consumer strategy their recommended distribution
practice, this makes the car-buying process more streamlined as it is more efficient and
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consistent. This provides an excellent and consistent customer experience as it educates
customers about their electric vehicles and other technologies Tesla develops. Customer
experience is also improved as consumers are able to directly provide positive or negative
feedback about their products and request or contact Tesla representatives for assistance through
their website. As previously mentioned about pricing, this strategy controls their pricing model
as this avoids or eliminates markups and reduces the time people take to purchase a vehicle that
are typically associated with traditional dealerships.
Tesla’s distribution strategy aligns with the consistent product positioning. Tesla positions
itself as the leader or king in electric vehicles (EVs) and sustainable energy solutions. Tesla
emphasizes innovation, technology, and commitment to environmental sustainability. This
product positioning is echoed in its various aspects of Tesla’s business model, including its
distribution strategy. Tesla’s Direct-to-Consumer strategy is in line with its premium and
innovative brand image. As mentioned before, since Tesla can sell directly to consumers through
its own stores and website, Tesla can control the whole customer experience. How this is
achieved is that both the store and website showcase their vehicles, educate customers about
electric technology, and maintain a consistent brand image across different mediums (Cuofano,
2023).
Additionally, Tesla’s spotlight on sustainability extends beyond their vehicles to the
whole ownership experience. Tesla promotes the use of clean energy such as solar power for
charging their vehicles and Powerwall energy for homes. This comprehensive approach to
sustainability complements Tesla’s product positioning and reinforces their commitment to
environmental responsibility. Tesla’s distribution strategy is a key element in delivering a
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consistent and premium brand experience to their consumers, supporting its positioning as a
leader in the electric vehicle market.
Organization
Tesla’s organizational structure consists of many important and vital roles. Without the
support of one another, Tesla would not function as an organization. At the top of the structure is
Robyn Denholm as the Chairman of Tesla and heads the board of directors. Right below her is
Elon Musk, the CEO and Co-Founder of Tesla. Elon oversees the day to day operations and
oversees the other officers such as the Chief Financial Officer, the Chief Technology Officer, the
Chief Accounting Officer, the Vice President of Vehicle Engineering, the Vice President of
Supply chain and a couple more vice presidents. Each of these roles has to be operated at a high
level to keep a company of this caliber to a standard. The Chief Financial Officer handles
everything related to cash flows, financial planning and taxation issues, whereas the Chief
Accounting Officer is responsible for all accounting related matters such as making sure
reporting and bookkeeping are accurate and in compliance with federal regulations. In addition,
each vice president is responsible for overseeing and making sure everything is running
smoothly and operating efficiently. They are assigned a role such as Safety and Health, Vehicle
Engineering, Supply Chain, Sales and People. Of course, with all of this there has to be highly
experienced workers to complete the vehicles and make sure they are running at one hundred
percent.
Implementation Plan
When introducing a new product, the date of the stages can really help determine if your
product will be successful or not. For that reason, Tesla’s main focus will be to produce these
first couple of cars in the U.S. starting in the year of 2025. The best way to help determine how
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many cars will be sold, Tesla will be taking pre-orders for the Sol-Active E. These pre-orders
will only be available to certain states like California, Texas, Florida, Arizona, and Washington.
These states would be the focus because they are one of the top states with the highest Tesla
sales, and they are also the more popular states where we can get a forecast on how they can
perform when they are fully released. Certain stores will have the models on display for
customers to get a look at what the car looks in person as well as having test drives available so
customers can get a feel of the car so they can see and experience how smooth the drive would
be in the new models.
During the middle of the year 2025 Tesla should be done with some of the car production
as well as the necessary software and test runs. During this part of Tesla will be able to collect
feedback from customers so they can improve the software or any necessary mechanical
problems or just make improvements in general. During the month of September 2025 most of
the car production should be complete for orders to be fulfilled. For the cars to be delivered on
time and to the right people, cars will start to be shipped during the month of November 2025.
Customers should be able to pick up the Sol-Active E by the month of December 2025. They
would get customers excited and feel like they have received an early Christmas present which
would boost the word-of-mouth promotion as well. The next three months after the cars have
been delivered it will be important for Tesla to see how their cars are performing, and how
satisfied the customers feel with the new model to determine if they should continue to sell the
Sol-Active E or not. Tesla will be able to see how much it has been costing them to produce the
car, the sales, and all the customer feedback to determine if they should continue selling the
specific model. See Appendix B for the Gantt Chart.
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Appendix A
Appendix B
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