Case Study

Tesla’s Competitive Strategies

and Emerging Markets Challenges

Nitu Saxena* and Siddhi Vibhandik**

Tesla’s meteoric climb to become one of the world’s most powerful automakers has ushered in a new
era in the global car business. The conventional automakers have been eclipsed by Tesla’s supremacy.
According to political, economic, social and technological views, Tesla’s market value may be inflated
due to its dominant position in the electric cars sector. This case talks about the different strategies applied
and the future scope for Tesla Inc. in the automobile market. Tesla aims to not only be one of the
promising automakers, but also introduce a line of patented technologies in the stream. Tesla’s entry into
the emerging markets will be a true test for Tesla. The case critically looks at the challenges faced and
the competitive strategies used by Tesla in the automobile industry.

Introduction
Tesla Inc., the electric car manufacturing giant, unveiled its first model of EV (electric
vehicle) in the form of a light sport car that went beyond all expectations, to start a
revolution in a 150-year-old industry. It was the birth of a whole new business model in
the automotive market, altering the way current incumbents view the future.
In this case study, Tesla Inc. is analyzed and evaluated on every aspect of the firm’s
competitive strategy, as well as how the firm interacts with the market environment.
Tesla’s qualities and the strategy they used to position, diversify, enter and expand into
the automobile industry are critically analyzed.

An Overview of Tesla Inc.

Tesla Inc., originally Tesla Motors, Inc., is an American electric car and sustainable energy
business based in Palo Alto, California. After acquiring SolarCity, the business now
produces EVs, battery storage from household to grid size and solar panels and solar roof
tiles.
* Associate Professor, Marketing at Amity Global Business School, Pune, Maharashtra, India; and is the
corresponding author. E-mail: nsaxena@pun.amity.edu
* * Research Scholar, Amity Global Business School, Pune, Maharashtra, India.
E-mail: siddhi.vibhandik@gmail.com

© 2021
Case IUP. All Rights Reserved.
Study 57
 Tesla Inc. has several assembly and manufacturing facilities. The Tesla plants in
Fremont, California, Giga Shanghai in Shanghai, China, Giga New York in Buffalo, New
York, and Giga Nevada in Reno, Nevada are the company’s major car production facilities.
Tesla Motors was started in July 2003 by Martin Eberhard and Marc Tarpenning. Tesla
Motors changed their name to Tesla in February 2017. The name ‘Tesla’ is a tribute to
Nikola Tesla, an inventor and electrical engineer. Ian Wright, J B Straubel and Elon Musk,
the company’s next three workers, were all given permission to declare themselves as co-
founders of Tesla retrospectively.
Elon Musk is the company’s current CEO and previous chairman. He described Tesla
as an independent carmaker and a technological business with the goal of selling electric
automobiles to the public at cheap costs in near future.
As of 2020, Tesla sells Model 3, Model S, Model X and Model Y cars. It also offers
batteries such as the Powerpack, Powerwall and Megapack, as well as solar roof tiles, solar
panels and other related items. With over 500,000 vehicles sold, Model 3 is the world’s
bestselling plug-in EV.
Tesla had numerous successful quarters but never had a complete year that was
profitable. September 2018, December 2018, September 2019, December 2019, and March
2020 were the most recent profitable quarters for the Company. Tesla’s market value
surpassed $190 bn on June 10, 2020.

Tesla’s Board of Directors

In a public letter issued in 2017, an investor group demanded that Tesla appoint two new
independent members with no links to CEO Elon Musk to its board.
According to the investors, five out of six non-executive directors now have business
or personal links to Elon Musk, which might jeopardize their capacity to exercise
independent judgment.
Tesla’s board of directors then comprised Brad Buss, the former chief financial officer
of SolarCity, Steve Jurvetson, a venture investor who now sits on the board of SpaceX,
Elon Musk’s brother, Kimbal and Ira Ehrenpreis, who both have invested in SpaceX.
Tesla Inc. Mission and Vision Statement
Tesla’s mission statement states that the company’s goal is to “accelerate the world’s
transition to sustainable energy.” Tesla’s mission statement demonstrates the company’s
transition toward more futuristic commercial practices. After discarding the previous goal
statement, which focused on moving the globe to sustainable transportation, Tesla adopted
this one. The corporation displays its attention to energy as a crucial component of its
operations in this example. The mission statement includes the following components:
• Accelerating Global Transition;
• Improving Communities; and
• Exceeding Expectations

58 The IUP Journal of Brand Management, Vol. 18, No. 3, 2021

 “To build the most compelling automobile company of the 21st century by spearheading
the world’s transition to EVs,” Tesla’s vision statement reads. The vision statement
recognizes that the world has arrived at a point when renewable energy should take
precedence. Tesla is concentrating on the use of electric energy to power all motor
vehicles. The following characteristics are included in the vision statements:
• Most Compelling Car Company; and
• Transition to Electric Vehicles (EV)
Since its establishment in 2003, the business model proposed in its goal and vision
statement has increased the company’s development rate, propelling it to become one of
the world’s largest automobile manufacturers. Tesla rivals and new start-ups look to the
company’s accomplishments for inspiration.
Tesla’s basic principles also underpin the company’s continuing supremacy in
automobile production. The company’s internal procedures are guided by core concepts,
which has contributed to its overall success. Essentially, the presence of these key
principles helps greatly to Tesla’s mission and vision statements being realized.
Tesla’s vision statement suggests that the company aims to lead other car companies into
the electric model future, while its mission statement informs what the company’s
management plans to accomplish to improve the company’s effectiveness and branding. A
corporate vision statement just lays out the company’s future course, but a mission statement
explains the planned activities that will enable the company to achieve its goals.

What Distinguishes Tesla from the Competition?

In a short duration of 16 years, Tesla and its charismatic, and at times unpredictable,
creator Elon Musk have flipped a century-old industry on its head. In today’s software-
driven world, traditional manufacturers are unprepared to compete.
Tesla’s innovation speed in the high-end automobile industry is comparable to Google
or Amazon rather than an automaker. And its increasing market value is a clear signal
to other automakers that, to survive, they will require to develop more inventive, Tesla-
like business models.
Some of Tesla’s doubters have been proven incorrect by the company’s recent market
breakthrough success. Tesla has surpassed the big German carmaker Volkswagen to become
the world’s second most valuable vehicle business behind Toyota with a market value of
$107 bn in January 2020. Tesla’s market capitalization has already surpassed that of Ford
and GM combined.
Tesla Inc. currently does at least these four things better than all the other automakers
in the market (https://www.reuters.com/article/us-tesla-stocks-graphic-idUSKBN1ZM23E):
• Tesla has shown its commitment to the cause of minimizing global warming by
producing EVs.

Case Study 59
 Tesla already has a significant marketing edge in certain sectors. Who would not
want to possess a car that does not pollute the environment, does not require
trips to the gas station, and is genuinely green? For a long time, other
manufacturers will be playing catchup on this issue. Traditional automakers
must now consider how to transform into software businesses, which, given
their current position, will require them to do what legacy software companies
do when start-ups threaten their core markets: purchase competitors to
consolidate the market.
• Tesla has empowered customers by simplifying the buying process.
Tesla does not follow traditional advertisement strategy of advertising in leading
newspapers or advertising on television or radio, instead, it employs the
traditional software “inbound” sales strategy. They assume that customers are
clever and would seek them out if they create the need properly. They have a
thorough understanding of the buyer’s journey.
• Tesla lengthens the lifetime value by utilizing better battery technology which
also minimizes the total production cost.
Tesla’s electric automobiles are far less complicated than their internal
combustion counterparts. They contain about 20 components per car, compared
to 2,000 in internal combustion engines, according to some estimates. The total
cost of ownership for customers is substantially reduced because of this simplicity.
• Tesla manufactures cars not as machinery but as software product.
Tesla creates automobiles by creating software for specific hardware, like how
Apple creates the iPhone or Microsoft uses Intel processors and Dell PCs. This
allows the firm to update the software capability of its vehicles every few weeks.
In contrast to the old car business paradigm, where the product remains the
same for as long as you drive it, this is a significant change.
The total cost of ownership of a Tesla is substantially cheaper than that of an internal
combustion car since it has fewer components. There is no need for costly oil changes,
tune-ups or muffler replacements. The automakers, who earn handsomely from their
service operations, are aware of this.

Tesla’s Inc.’s Sales Strategy

Tesla has invested the last 15 years defying the status quo in the automotive sector. It
defied the popular belief that automobiles could not be manufactured in the United States.
When the IPO of Tesla came out in 2010, it was the first American automaker to do so
in 54 years.1 It also challenged the conventional wisdom that stated that motorists do not
desire electric automobiles.
1 https://www.industryweek.com/the-economy/environment/article/21956412/tesla-is-first-us-automotive-company-
to-go-public-in-more-than-50-years

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 Finding and converting people into customers and brand supporters was drastically
different when data was used instead of an aggressive and generic sales technique. Tesla
was able to succeed because its sales staff were set up to work as partners with their
customers rather than rivals. It transforms salespeople into brand practitioners dubbed as
Tesla Product Specialists by the company.
Tesla’s business approach is to create standard technology items, target potential
consumers, and then expand into broader markets at a cheap cost. Each model’s
battery and electric items would be paid for in part using the proceeds from previous
versions.

Tesla’s Segments Product-Wise

• The Roadster was a limited-edition model with a price tag of $109,000.
• Model S and Model X were aimed at the premium market.
• Model 3 and Model Y were aimed for the high-volume sector.
Tesla’s Production Strategy
Tesla’s production plan includes a higher degree of vertical integration, including
component production and unique charging infrastructure. The firm operates in huge
factories to capitalize on sales efficiencies. Vertical integration is an unusual idea in the
car business, as firms often outsource 80% of the components to suppliers and concentrate
on engine manufacture and final product assembly.

Patents and Licenses

Tesla’s technical approach focuses on pure electric propulsion as well as bringing
other technological industry perspectives to transportation, such as an online
software.
Tesla permits others to utilize its technology patents in good faith. Licensing
agreements include terms in which recipients promise not to sue Tesla for patent
infringement or directly duplicate the designs.
Along with that, Tesla has control over its other intellectual property, including
trademarks and trade secrets, to avoid direct infringement on its technology.

Tesla’s Intensive Growth Strategies

Tesla has followed intensive growth strategies since the time of its conception and has
found out ways and means to grow (Corsten and Will, 1994).

Market Penetration (Primary Strategy)

Currently, Tesla’s strong market penetration is the foundation of their aggressive growth
plan. They accomplished business development as seen by increased sales. Because of the
growth in sales, Tesla is expanding into a new market. Tesla aims to sell EVs in China and
Europe, which may lead to market penetration. In this manner, the firm optimizes income
from the markets in which it already operates.

Case Study 61
 The reason for the market’s rapid development may be noticed when they reach new
worldwide regions. Based on this intense approach, a strategic goal is to expand the firm
through aggressive marketing to boost sales revenues, as evidenced by their company’s
growth “Tesla’s stock market valuation, starting at $100 bn (£72 bn) and growing to $650
bn”(https://www.livemint.com/companies/news/tesla-races-past-100-bn-in-market-
valuation-triggering-payout-plan-for-musk-11579709773018.html).

Product Development (Secondary Strategy)

Tesla’s next intense growth strategy is product development. Tesla generates growth in
sales through development of new products, including automobiles, solar panels, EV
charging stations, etc. Tesla’s primary aim is to develop products that improve market
technology while minimizing environmental effect.
The Tesla Roadster was a game-changing vehicle since it was the first electric sports
automobile. Because they specialize in high-end EVs like the Tesla Model S, 3 and X, this
market disruption is the major reason for the distinction between Tesla and its
competitors. Because of the nature of high-end EVs, they develop associated goods like
the supercharger as a bonus for their consumers. Tesla’s primary goal to spend on Research
and Development (R&D) is achieved through investing in better technology and
developing sound products.
They do not just focus on car development, they also develop EVs like the Tesla semi,
which is part of Tesla’s “Master Plan,” which states that they want to build not only
environmentally sustainable vehicles with solar energy as a fuel source, but also
environmentally sustainable transportation for these vehicles by developing an
environmentally sustainable infrastructure.

Market Development
They utilize market development as a means of expanding the EV market. As they expand
into new areas, they attract new types of customers, such as semi-trucks, sedans, coupes,
solar panels, and/or power walls. The plan is that entering new markets would result in
an increase in sales and growth. Tesla sells automobiles in the Netherlands, Norway and
Germany. Switzerland, Denmark, France and China are among the other countries having
Tesla’s footprints. Tesla has built offices and facilities in the United States and the United
Kingdom and is anticipated to grow to additional worldwide areas.
According to the market expansion plan, Tesla will follow a strategy of collaborating
through joint ventures with other firms to expand into new markets.

Diversification
This is Tesla’s fourth and final growth plan. This growth strategy aids the company’s
progress by allowing it to produce a variety of goods. Tesla, for example, developed Tesla
Powerwall battery solutions for a range of non-automotive uses. It has also entered the

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heavy truck sector with the Tesla Semi and the high-performance supercar market with
the Tesla Roadster 2.0. However, the company’s financial performance is currently
unaffected by this aggressive strategy.
Tesla spends most of its profits on market penetration and product development, which
results in diversification.

Porter’s Generic Strategy Model Followed at Tesla

Tesla’s primary competitive strategy is one of broad differentiation. This generic approach
creates a competitive advantage by developing items that distinguish the company from
other enterprises in the sector. Tesla Inc.’s cars, are competitive because they incorporate
sophisticated environment-friendly technology, even though the majority of autos today
use internal combustion engines.
Using this wide competitive approach, the firm broadens its appeal to all
potential clients, who are becoming increasingly interested in environment-friendly
items. Initially, Tesla’s generic approach for competitive advantage was differentiation
focus. Using the differentiation emphasis strategy, the Company emphasized the
uniqueness of its goods and focused primarily on early adopters in the high-end
electric car sector.
These initial adopters are rich clients who have a strong proclivity to buy freshly
launched items. However, Tesla is well-known and production costs are falling, the
company’s general competitive approach has moved to widen differentiation. Because of
the company’s decreasing production costs and rising brand popularity, it is now able to
target clients in the car market broadly.
Tesla, Inc.’s general strategy necessitates appropriate strategic objectives to maintain a
competitive edge. One of the company’s strategic goals is to expand investment in R&D
to create new products that meet market demand for better renewable energy solutions,
such as batteries for a variety of applications.
Another strategic goal related to Tesla’s general competitive strategy is to increase
competitiveness by expanding its market reach to generate more sales and through it
achieving brand popularity.

Tesla’s Competitors
Tesla, Inc. operates in a very competitive environment. The impact of competition on the
energy solutions and automotive industry environment is outlined by studying the Porter
Five Forces Model. The external elements and their intensities in Tesla’s instance that are
accountable for the powerful force of competitive rivalry are as follows:
• Small number of firms;
• High aggressiveness of firms; and
• Low switching costs

Case Study 63
 The EV industry is dominated by a small number of companies. This additional
element, according to the Five Forces research methodology, reduces the impact of
competition on firms like Tesla. These businesses are known for being aggressive in their
marketing and product development.
Here are the top three competitor firms of Tesla Inc.:

NIO
NIO, which was founded in 2014, produces luxury electric automobiles for the
international market. Though its products have typically received positive reviews, the
business has also earned a reputation for being hazardous and unpredictable. Some
observers stress that its price is predicated on a hazy idea of “potential” rather than actual
financial performance—yet a similar criticism might be levelled against Tesla.
In 2020, NIO delivered 36,000 vehicles, representing a 111% increase in sales, while
its share price rose more than 1,000% year to date. Its fast-increasing delivery numbers
and excellent financial indicators have made it a viable choice for investors looking for
a Tesla alternative.

Volkswagen
The Volkswagen Group is one of the industry titans that has long promised to change this.
In 2019, the firm made good on its promise by launching the manufacturing of the “ID.3,”
a new electric car.
Volkswagen announced plans to invest €73 bn over the next five years on digital and
electric car technologies, intending to produce 1.5 million EVs by 2025, in preparation
for the EU’s new emission goals.
The 82-year-old Volkswagen, one of the world’s largest corporations, had weathered
several boom-and-bust cycles—not to mention dictatorships, wars and the split and
reunification of its host nation—making it particularly effective at accomplishing long-
term goals like this one.

BYD Company
BYD Company, based in Shenzhen, is one of the world’s fastest-growing car companies.
The firm radiates the kind of confidence associated with Silicon Valley’s early days, from
its odd name (an abbreviation for “Build Your Dreams”) to its distinctive offices.
BYD, despite its lack of worldwide recognition, is already a powerhouse in China, with
a vast product line that spans nearly every high-tech industry, from consumer electronics
to energy storage. The business is already the largest manufacturer of battery-powered
automobiles in the world.
Even though the firm has had minimal influence outside of China and has yet to
demonstrate any genuine global ambition, there is still an opportunity for tremendous
development. EVs account for just 2% of total automobile sales in China, owing to the

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country’s lack of electric charging stations. BYD’s future seems bright, even if it never
expands outside its boundaries.
Tesla’s mixed marketing strategy responds to such aggression, amplifying the negative
impact of competitors on the company. The power of competition is further bolstered by
the minimal barriers to buyers purchasing automobiles from other manufacturers.
The electric car market has many new players like MG, Tata Motors, Hyundai like
automobile manufacturers who have one or two good electric models. The same is the case
with luxury car manufacturer Mercedes which has few high-end models of electric cars and
is trying to set up charging infrastructure in emerging market economies like India.

The Threat of New Entrants in the Market

New firms are new entrants to the industry, and they have an influence on the industry
climate and the success of companies like Tesla.
The trade-off or compromise between performance and affordability is one of the key
problems for electric cars. On the one hand, nearly all major manufacturers, including GM,
Ford, Toyota, BMW and others, have produced low-cost EVs, but their performance was
not up to the mark. Electric automobiles were renowned for being slower than regular cars
and for having short-lasting batteries.
Tesla, on the other hand, had produced completely electric automobiles such as the Model
S, Model X and Model 3 that featured advanced technological capabilities like quick
acceleration and covered more distance on a single charge. However, manufacturing completely
electric, sophisticated automobiles is a technically difficult and costly proposition.
Any probable new market entry will face the same hurdles as General Motors, Ford,
Toyota and Tesla had. Given that existing market participants are yet to develop answers
to these problems, it may be claimed that unless they do, new market entrants will be
confronted with the same set of problems.

Economies of Scale
Established market participants profit greatly from economies of scale, which new market
entrants do not have access to, at least for the first few years of their operations. Another
important obstacle for new market entrants into the electric car sector is the high capital needs.
At the same time, it is worth noting that Tesla’s choice to renounce its patent rights
and make its methods and ideas open-source and accessible to others raises the risk of new
competitors.
Despite the obstacles for new entrants described above, the timing of entry into the
electric car market is a key element enticing both current and new manufacturers to claim
a piece of the expanding sector.
Electric car sales in the United States are anticipated to surpass 6.5 million units by
2040, with autonomous EV sales expected to exceed 8.5 million units globally (https://
about.bnef.com/electric-vehicle-outlook/).

Case Study 65
The Threat of Substitution to Tesla
The immediate threat to a green car is the existing prevalent usage of gas automobiles.
This alternative occurs because the cost of making green, let alone an electric automobile
is fairly high, therefore the firm must charge a higher price to sustain economically. For
a long time, the notion of a low-cost hybrid vehicle seemed impossible. However,
technical advancements and discoveries have enabled economic manufacturing processes,
resulting in lower car prices for consumers.
Different forms of transportation can also be used as a replacement. Cycling, riding the
bus, and walking can all be used as replacements to some extent. However, because they
do not completely grasp the consumer’s demands, the danger of these types of
replacements is minimal.
The appeal lies in Tesla’s product offering, which responds to the public’s desire for a car
that is not just gas-free but also entirely electric. Tesla automobiles are priced more than gas-
powered cars, but they are comparable with cars like the Chevy Volt and Nissan Leaf.
Tesla has aimed, since its inception, to produce a complete EV that is affordable to the
ordinary user. If an average consumer can buy a fully electric car in ‘X’ years, then gas-
powered and probably hybrid car manufacturers will be replaced by this new wave of fully
EVs, which can cost the customer almost nothing to charge/fill because Tesla’s charging
stations are powered by solar energy and are therefore free.

Power of Suppliers of Tesla Inc.

Tesla prides itself on the quality of its suppliers. The following five forces analysis depicts
how suppliers affect the environment of this sector by influencing the availability of
materials required by the firm. The following are the intensities of Tesla’s suppliers’
external elements of negotiating power:
The Value of Having Business with Tesla
Numerous suppliers want to do business with Tesla because of the company’s widespread
brand awareness and strong brand image on a worldwide scale. Tesla, in particular, is an
excellent reference business for suppliers looking for more clients, which reduces supplier
negotiating strength with Tesla.

Large Number of Suppliers

Tesla gets its parts from a variety of suppliers. Suppliers bargaining power is low because
the electric carmaker can easily replace the bulk of its suppliers. These effects reduce the
bargaining strength of suppliers.
At the same time, Tesla orders many components from a single supplier. Tesla, for
example, employs only one certified cell source for the battery packs it uses in car
production. Panasonic is also the exclusive provider of lithium-ion cells and PV cells and
panels for Gigafactory 1 in Nevada and Gigafactory 2 in Buffalo, New York.

66 The IUP Journal of Brand Management, Vol. 18, No. 3, 2021

Importance of Volume to Suppliers
Supplier bargaining power is inversely proportional to the volume of orders received. In
other words, a higher number of orders for a supplier reduces the negotiating power of the
provider. Tesla’s production capacity has been steadily rising, and the electric car maker
produced 180,000 automobiles in the fourth quarter of 2020.

Power of Buyers of Tesla Inc.

This element of the Five Forces Analysis accounts for the growing influence of customers
on businesses and the environment of the automobile, battery and solar panel industries.
Tesla’s customers have a direct influence on the company’s sales revenue.

Absence of Switching Costs to Competitors

Customers may move from Tesla’s Model 3 to an electric car like the Jaguar I-Pace,
Porsche’s Mission E-Cross, or Audi’s E-Tron Quattro at no cost. The lack of switching
costs significantly enhances buyers’ bargaining power.

Price Sensitivity
Another key aspect that influences buyers’ negotiating power is price sensitivity.
Customers may discover that Tesla costs are truly quite pricey when the range of electric
automobiles from various established and new automotive businesses grows.
As a result, purchasers may use their negotiating power to force Tesla to rethink its
price approach, putting further pressure on profit margins.

Product Differentiation
The degree to which different electric car manufacturers differentiate their products is a
key element influencing consumer bargaining power. Tesla’s EVs are now distinguished by
their performance and simple, as well as beautiful appearance.
For example, the Tesla Model S Plaid is currently the quickest electric car in the
market. As a result, buyers wanting high-performance and beautifully styled electric
automobiles have little negotiating power because there are few options in the market that
provide these benefits.

Products Offered by Tesla Inc.

Tesla, as we know, is a very renowned firm and is associated with the production of EVs. Other
than that, there are a few other products offered by Tesla Inc. They are discussed below:

Autopilot
Tesla Inc. created autopilot mode as more than simply a substitute for driving; it was
created with the idea that the driver must remain focused on the road in order to manage
the vehicle if necessary. Tesla Autopilot began offering semiautonomous driving assistance
in September 2014. Tesla’s sensors have been enhanced.

Case Study 67
 Adaptive cruise control, lane departure warning, emergency braking, autosteer, auto
park and summon (recalling the vehicle from a parking place) have all been part of
Autopilot since 2017.
HW2 with a second GPU and, for Model 3 only, a driver-facing camera was released
in mid-2017 and upgraded HW2 with eight cameras and twelve ultrasonic sensors, with
forward-facing radar, was released in mid-2017, and HW3 with a second GPU and, for the
Model 3 only, a driver-facing camera was installed in the Model S and X in Q1 2019 and
shortly thereafter in the Model 3.
Tesla was supposed to show complete autonomy by the end of 2016, but it was later
pushed out to the end of 2019. Elon Musk claimed in April 2017 that in two years, drivers
would be able to sleep in their cars as they drive themselves.
Tesla stated in April 2019 that, going forward, Autopilot mode will be standard on all
of its vehicles. Full self-driving is a software option available at an additional cost.
Tesla released a software upgrade on April 24, 2020, that will enable the EV to fully
self-drive. The automobiles now detect and automatically stop at stop signs as a result of
this upgrade. At traffic lights, the automobiles likewise slow down and finally halt, and
the driver indicates that it is safe to go through the light. The software is still in the beta
stage, according to Tesla, and is far from being a finished product.

Glass
The initiative to create roof glass for Tesla Model 3 and for use in SolarCity roof tiles,
which was revealed in October 2016, was announced in November 2016.
The roof tiles are one-third lighter than conventional tiles and have a solar collector
built in.

Battery Products
Tesla intended to make all of its patents available to the public. In April 2015, they got
orders totaling $800 for their Powerwall residential and Powerpack industrial batteries.
Larger-scale designs for industrial customers in quantities of less than 100 kWh were
announced. A 7-kilowatt-hour wall-mounted device and a 10-kilowatt-hour unit were
among the two types available.
Panasonic began mass-producing the first cells. The manufacturing was then moved to
Giga Nevada. Later that year, Tesla announced that it had been chosen “through a
competitive process” to provide 27,000 hp of battery storage power to Southern California
Edison.
Elon Musk volunteered to help with the Puerto Rican government to restore the
island’s electrical system after Hurricane Maria struck in September 2017. Later that
month, Tesla sent 700 solar panels to the “Hospital del Nio,” where the batteries helped
restore treatment to 3,000 patients who needed round-the-clock attention.

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 Tesla was in negotiations with the Greek government in January 2019 about providing
them with battery and solar systems for their islands with a potential pilot on the Greek
island of Limnos.
Tesla purchased Maxwell Technologies, an ultra capacitor energy storage company, in
February 2019. Megapack, a containerized battery solution for utility-scale applications,
was launched in July of that year.

Motors
Tesla produces two different types of electric motors. A three-phase, four-pole AC
induction motor with a copper rotor (which inspired the Tesla logo) is utilized as the rear
motor in Model S and Model X, and is their oldest and most widely manufactured design.
Model 3 and Model Y permanent magnet motors are utilized in the front motor
of 2019-onward versions of the Model S and X, and the Semi is anticipated to
employ them as well. The permanent magnet motor improves efficiency in stop-
start driving.

Acquisitions by Tesla Inc.

Tesla is still a young business, but it has grown quickly to become the most valued
manufacturer thanks to a series of important acquisitions, particularly in recent years.
Those purchases were largely made to increase manufacturing capacity, improve operating
speed and efficiency, and lower prices.
May 8, 2015 – Riviera Tool LLC. Manufacturer of stamping die systems involved in
sheet manufacturing with metal parts.
October 2, 2019 (Discovered) – Tesla acquired Ontario, Canada-based electric batteries
manufacturer Hibar Systems which used to manufacture advanced automation solutions
for small cell batteries through a mechanized pump injection system.
The green automotive sector is expanding, and it would not be long before fresh new
independent firms like Tesla begin mass producing an electric car that meets all the
demands of consumers, including one of the most important factors: affordability. The
advancements that businesses like Tesla and Panasonic are making in the manufacture of
Lithium Ion batteries are exciting to watch. As lithium-ion battery technology improves
and becomes more creative, firms like Tesla will be able to mass-produce electric cars at
reasonable rates, propelling the Green car sector forward. Suppliers of such critical
components gain a lot of power as a result of this. Hybrid automobiles will soon be in the
same position as gasoline-powered vehicles.
Tesla made it through the world-shaking exponential catastrophe unscathed. The
pandemic is called Covid-19. However, the lockout and worldwide economic downturn
have pushed Tesla’s future plans forward. Tesla’s solar installations had their worst quarter
ever, while the company’s battery business grew at a rapid pace.

Case Study 69
 Nonetheless, Elon Musk, the company’s CEO, projected that the energy sector will one
day be on a par with its automotive division in terms of size. Tesla’s bottom line, on the
other hand, is all about electric automobiles, and the brief suspension of work at Tesla’s
Fremont facility owing to local health regulations had no impact on vehicle production
and delivery.
Elon Musk has a lot of plans for the future, including a million robot axis on the road
by the end of the year, complete self-driving software, a network of underground roads to
avoid traffic, hyperloop, zero-emission solar roofs, an online platform to sell Tesla cars,
Tesla’s child-sized submarines, a design and engineering center in China, and a small and
affordable Tesla Model 2.

Problems of Tesla in Emerging Markets

Tesla is very promising EV company which is all set to now expand its operations in many
developing countries like India. Speaking of which, it will face many challenges while
establishing itself as a dominant firm in the automobile sector.
According to new market data, Ford Motor Co.’s electric sport-utility vehicle, the
Mustang Mach-E, has begun to eat into Tesla’s market share in the United States, while
in Europe, the world’s largest electric-car market, Volkswagen AG surpassed Tesla to
become the top-selling all-EV maker last year. Tesla’s market share has stayed steady and
even increased in some areas, including Asia.
While many Tesla enthusiasts in India are overjoyed with the announcement of the
company’s arrival in the nation, conquering the market may prove to be the company’s
most difficult struggle as yet. The company has just applied to build an office in
Bengaluru.

Challenges for Tesla in India

India has been announcing steps to encourage EV sales, but they may not be enough to
boost sales of Tesla’s costly EVs.
According to the International Energy Agency, India announced the Faster Adoption
and Manufacturing of Hybrid and Electric Vehicles (FAME) initiative in 2015 with a
900 cr subsidy pledge, encompassing everything from electric tricycles to buses. In 2019,
a new FAME initiative with a budget of 10,000 cr was launched to encourage individuals
to acquire EVs and to create charging infrastructure.
Another issue that Tesla will have to deal with in India is price. Tesla’s costly
products will not qualify for EV subsidies in India since the highest level for an EV to
qualify for subsidies is 15 lakh. Further from the pricing, the cost of export and taxes
on Tesla cars once they arrive in India will put them out of reach for the majority of
buyers. According to research, 75% of all Indian automobile sales are for less than
$10,000.

70 The IUP Journal of Brand Management, Vol. 18, No. 3, 2021

 While Tesla faces obstacles along the road, the Indian EV industry is currently
booming, with a potential worth of $206 bn in the next decade, according to a CEEW
Centre for Energy Finance research.

Indian Competitors of Tesla Inc.

Only one automobile firm is leading India’s EV market and it is not Tesla Inc. In 2010,
Mahindra, bought a small firm which was producing EV apt for the Indian market and
launched its very first car, Model S Sedan.
As per the media reports, Mahindra thought this to be an innovative concept which
will have importance in the next decade and many more to come. They believed that the
future of mobility is sustainable, and sustainability can be achieved by electric mobility.
The e2o, Mahindra’s first electric car, struggled to attract consumers, but things started
to look up in 2015 when the government announced a series of tax incentives.
The Mumbai-based firm is still the only one in India selling electric cars directly to
customers, putting it in a strong position to lead the country’s transition away from
polluting automobiles.
Against Mahindra, Tesla is still a very new name to the Indian masses. Buyers in India,
who are looking for adaptability, cost and comfort level, will have a different perspective
towards Tesla and its pricy cars. Though quality is assured, Tesla will have to face some stiff
challenges to penetrate into the diverse Indian market and establish itself as the EV giant.
Conclusion
Tesla has shown commitment to provide the world with affordable and competent EVs. In a
short period of time, it has grown into a promising company with a bright future. Tesla’s entry
into emerging markets like India will be the real test for the company. Apart from price
challenge, it also has to face tough home competitors like Tata and Mahindra. The competitive
challenges are coming from big auto majors such as BMW, Toyota, Mercedes and Hyundai.
Whether Tesla will continue writing its growth story or will be affected by emerging market
challenges is a story to be followed keenly by business students, academicians and researchers.
If Tesla can offer good car models which are sustainable environmentally and economically as
well, then Tesla can hope to excel in markets like India.

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