A PROJECT REPORT

ON
“MARKETING STRATEGY OF TESLA MOTORS”

SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE DEGREE

OF
BACHELOR OF BUSINESS ADMINISTRATION
(BATCH 2021-2024)
Affiliated To: Ch. Charan Singh University, Meerut
SUBMITTED TO: SUBMITTED BY:
MR. SEJAL YADAV
(FACULTY OF BBA) BBA V TH SEM.
ROLL NO. - 210879105058

HIERANK BUSINESS SCHOOL

Affiliated to CCS University, Meerut
A-42, INDUSTRIAL AREA, SECTOR-62, NOIDA

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 Table of Contents

I. Executive
Summary…………………………………………………………………………….

II. Introduction……………………………………………………………………………………

III. External Environment………………………………………………………………………..

IV. Market Segmentation……………………………………………………………………

V. Marketing Mix…………………………………………………………………………………

A. Product Strategy………………………………………………………………………

B. Promotional Strategy…………………………………………………………………

C. Pricing Strategy………………………………………………………………………

D. Distribution Strategy…………………………………………………………………

VI. Conclusion and Recommendations………………………………………………

VII. Appendices………………………………………………………………………

Viii References…………………………………………………………………………

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Executive Summary
Tesla Motors was founded in 2003 on the belief that its product and technology

were inherently different from its competition. Tesla aims to compete with other

luxury brands like Audi and BMW. As the only fully-electric luxury car producer,

Tesla utilises an interesting marketing mix to appeal to its target market in the

eco-friendly, technologically savvy uppermiddle class. With the increased

environmental concern and tax credits given to those who buy eco-friendly cars,

Tesla prices its luxury Model S rather cheaply compared to its competition.

However, its product does not lack the feel of luxury with a 17-inch touchscreen

with media, communication, cabin and vehicle controls, and Bluetooth technology

as well as 200-watt stereos. Tesla’s product is highly customisable since all cars

are custom made after the customer has ordered the product, either done in its

mall storefronts or online, because Tesla has no inventory. The cars come a single

or dual charger, a 240V charger, and a 110V charger for standard house outlets.

Since the Model S has about a 244 mile range on one charge, Tesla has built

Supercharger stations across the United States to facilitate cross-country travel.

CEO Elon Musk promised these Supercharger stations will always be free to Tesla

owners. In order to promote its product, Tesla avoids a traditional advertising and

retailing but focuses on creating awareness through word-of-mouth and social

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media. Musk actively promotes through Tesla’s YouTube channel, blog, and

twitter to keep customers up to date on what the company is working on and

releases to look for in the future. Overall, Tesla marketing mix is quite effective in

creating value for its customers through its environmentally conscious product,

free charging stations, and tax credits. However, in order to progress its current

market offering, Tesla should invest in a small inventory of cars for test-driving,

not charge customers large sums of money to test-drive its cars, and invest in

more other forms of promotion than word-of-mouth and social media.

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 CHAPTER - 1

Introduction

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Martin Eberhard and Marc Tarpenning founded Tesla Motors in 2003, and, since

then, the company has bloomed (Appendix 2). After going public in 2010, Tesla’s

revenue now exceeds $2.44 billion with a gross profit of $456.26 million (Key

Statistics Tesla). The name pays homage to Serbian inventor Nikola Tesla who

created the induction motor and alternating-current power transmission. Without

Tesla’s vision and brilliance, the company would have no product. Tesla Motors’

mission is to “to accelerate the advent of sustainable transport by bringing

compelling mass market electric cars to market as soon as possible” (Tesla

Motors). The company believes in transportation that is eco-friendly, stylish,

performance driven, and accessible to customers. In 2008, Elon Musk became

CEO of Tesla Motors. Musk aims to eventually offer electric cars at an affordable

price to average income consumers. Musk seeks to attain this goal by working

towards producing an electric vehicle under $40,000 by 2017 (Tesla Motors).

Tesla is the first successful American auto manufacturer startup in the past 100

years and has won numerous awards for its production and performance. After

five years, Tesla released their first car, the Roadster, which achieved 245 miles

on a single charge, a 135 miles per gallon equivalency (Tesla Motors). Prior to the

Roadster, no other electric sports car achieved such performance levels. Tesla

discontinued the Roadster in 2012 to focus on two new models, the Model S

sedan and Model X SUV, whose production has been delayed to 2015 (Appendix

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1). For our analysis, we will be concentrating on the Model S, which is a full-size,

electric, five-door, luxury lift back that was introduced in 2012. Since the

introduction of the Model S, it has won awards such as 2013 World Green Car of

the year, 2013 Motor Trend Car of the Year, Automobile Magazine’s 2012 Car of

the Year, Time Magazines Best 25 Inventions of the Year 2012 award, and the

Consumer Reports top-scoring car ever. The Model S has also scored a perfect 5.0

NHTSA safety rating.

I. External Environment

Due to the rise in both gas prices and environmental awareness, pure electric cars

have become increasingly popular throughout the United States. Now, it is not

uncommon to see hybrids and electric cars on the road. With the Model S, Tesla

Motors is the one of the first companies to market a fully electric luxury sedan.

According to the U.S. Census Bureau, the per capita income of the average

American has slowly risen in the past four years from $28,374 to $28,829,

creating a seemingly favourable market for luxury items like the Model S. Also,

government subsidies on electric vehicles (US News) has allowed Tesla to retain

more of their profits as they continue selling cars. However, in places like Texas,

Tesla has been met with challenges hindering their sales and performance. New

legislation has been able to stop Tesla from legally selling as well as advertise

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(Bloomberg). Overall, the government subsides, rising environmental awareness,

and increases in income provides Tesla an external environment that will have a

positive effect on its market. (Appendix 3)

Despite the positive external market, Tesla’s Model S is in direct competition with

other luxury sedans from cars such as the Mercedes Benz S Class, the Audi R8, and

the BMW 7 Series. Mercedes was founded in 1901, followed by Audi in 1904, and

then BMW in 1927. In comparison, Tesla was founded in 2003, making Tesla the

neophyte while Mercedes, Audi and BMW are veterans of the market. However,

because the market is highly specialised, the rivalry is modest. Due to the

depleting petroleum supply and rising prices (GasBuddy), the electric car market

is very attractive and expanding fast. With an increasingly attractive alternative

automobile industry, the threat of new entrants into the electric car industry is

very high. Established car manufacturers are able to produce high capital

investments and avoid the financial obstacles by creating electric vehicles. For

production, car-manufacturing companies are highly dependent on the

availability of raw materials, therefore the power of the suppliers is high (Tesla

Strategy). In contrast, the bargaining power of buyers is modest. Tesla is

responsible for supplying manufactured cars for companies like Daimler and

Toyota, who have strong bargaining power. However, government incentives will

give potential customers tax credit deductions if they are the owner of an electric

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vehicle, which creates high demand and keeps the buyer’s bargaining power low.

(Appendix 4)

One of their biggest strengths is Tesla’s ability to outsource secondary

components (Suppliers/Outsourcing), keeping costs low and allowing them to

focus primarily on technological advancement. This boosts research and

development for creating the most efficient electric battery technology. Another

strength of the company is its distribution of goods in high traffic retail locations.

This increases potential customer interaction while eliminating the cost of 10%

dealership commission (Tesla Strategy). However, Tesla’s biggest weakness is its

lack of liquidity. Despite the high sales of new Model S in 2013, the company has

not yet seen actual profit because of their large sum of debt. Tesla’s most

promising opportunity is customer awareness about the benefits of having an

electrical car; especially with the substantial rise in petroleum prices and

increased concerns about environmental pollution. One threat to Tesla is the

entrance, to the electric car market, of more established manufacturers with

higher expertise and power in the automobile industry. This would decrease the

existing number of Tesla customers and allow other companies to sell more

efficient cars at a lower price. (Appendix 5)

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 ii Market Segmentation

The target market for the Model S is the upper-middle class, baby boomers who

are green friendly (“Tesla Marketing Plan”). Tesla is looking for consumers that

are interested in a luxury car as well as one that is also good for the environment.

In addition, Tesla is targeting technologically savvy customers. Not only is their

fully electric car a new technological advancement, but the car also offers special

features such as the “Tech Package with Autopilot” (EV Incentives). This package

includes features such as memory seats and mirrors, and driver profile (EV

Incentives). It also has onboard maps and navigation for North America with free

updates for seven years (EV Incentives). More features include automatic keyless

entry, and autopilot convenience features that are available though software

updates (EV Incentives). Despite these luxury features, Tesla has not been doing

well this past year. Tesla notes that their current earnings are below zero;

however, they expect to have a comeback. Next year they are projected to have

an earnings growth of 1850% that has been determined by external personnel

("Tesla Motors, Inc. (TSLA) Forecast Earnings Growth") (Apendix 8). This increase

in projected growth is also confirmed in Tesla’s internal data (Apendix 7). Also,

Tesla Motors’ full year revenues reached $2.5 billion in 2013, and this year was

!10
499.5% above the prior years results (Earnings & Estimates Summary - TESLA

MOTORS INC (TSLA.)). By presenting new technology through the form of electric

cars and luxurious benefits, Tesla expects successful sales to their target

market.

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About Tesla:

Tesla, Inc. earlier known as Tesla Motors specializes in

electric cars, Lithium-ion battery for energy storage, and
residential solar panels through their solar city subsidiary.
Elon
Musk, JB Straubel, Martin Eberhard, Marc Tarpenning, and Ian
Wright founded Tesla on July 1,
2003 and Elon Musk is currently Tesla’s Chairman, Product
Architect and CEO. Tesla is headquartered in Palo Alto,
California with more than 30,000 employees and 212 stores
worldwide with many more on the way. Tesla went public in
June 2010 and generated over $226 million in its IPO.

In 2008, Tesla released its first electric vehicle, the Tesla

Roadster, and sold over 2,100 of them in 32 countries. Tesla
modeled the Roadster after the Lotus Elise by securing a
contract with Lotus for 2,500 Elise Gliders.

In the fall of 2012 Tesla released the Model S, the first fully
electric, luxury, high performance sedan. In March 2009, a
prototype of the Model S was released at a public exhibition. It
was met with great reviews and received over 8000 pre-orders
for the vehicle. With significantly greater manufacturing
capabilities and a price tag less than half that of the first electric
sports car Roadster, the Model S penetrated a larger share of
the market in 2013.

In 2012, when Tesla was about to launch the Model S, they

clearly stated their mission to be “a clean start, committed to
electric built around the driver, and sparking the evolution”
the same as it is today. Its aim was to constantly innovate and
deliver the most efficient and sustainable electric cars. Later
Tesla segmented their business into Electric car and other green
energy empowered subsidiaries.

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In this study we are analyzing the journey of effectively
segmented, accurately targeted and well positioned Tesla
Model S electric car through various key concepts of Principles
of Marketing.

The Product: TESLA Model S

The goal of Tesla’s engineers was to produce the best high

performance luxury sedan on the market, regardless of its
electric capabilities. Tesla proudly states this is something it has
achieved. The Model S is composed of a perfect blend between
“exceptional performance, functionality, and attractive styling.
“With a rigid body structure, nearly 50/50 weight distribution
and a remarkably low center of gravity, Model S offers the
responsiveness and agility expected from world’s best sports
cars while providing the ride quality of a sedan”. AMAZINGLY,
its performance model can accelerate from zero to 60 mph in
4.4 seconds. In addition to its superior driving capabilities, the
Model S offers a number of revolutionary luxury features. It
comes standard with a 17 inch touchscreen that features
integrated maps, music, and high speed connectivity to the
internet, which is superior to offerings in its class. It’s the only
sedan that offers an all glass panoramic roof of which can be
completely opened by a touch of a button. The Model S also has
the best in class storage space at 36.8 cubic feet.

With its performance driving and luxury features, it is hard to

believe the Model S is fully electric. Criticisms of other electric
cars on the market are that they aren’t capable of traveling long
distances on one charge, or that they take too long to fully
charge. The Model S offered three battery pack options,
40kWH, 50kWH, and 85kWH, with a range of 160 miles, 230
miles, and 300 miles respectively, on a single charge. Using
any normal outlet it can be recharged at a rate of 62 miles per
hour, and with a Tesla Supercharger, in thirty minute, the

!13
vehicle can be charged to 50 percent capacity. Both the charge
time and distance travelled per charge far exceed that of its
competitors. Without the need for gasoline, Tesla estimates
that the Model S will save consumers who drive comparable
premium internal combustion engine sedans approximately
$1,900 a year.

Beyond the performance, styling and energy efficiency of the

Model S, there are additional benefits that bring value to the
consumer. One of these is the exceptional customer service and
support that comes with being a Tesla owner. Even though the
company expected “the Model S will have lower maintenance
costs than comparable premium internal combustion engine
sedans due to few moving parts and the absence of certain
components, including oil, oil filters, spark plugs, and engine
valves”, if customer’s Model S requires service, a Tesla
technician will come to customer’s home to make the necessary
repairs. The battery also came with an 8 year 100 mile
warranty. There are also a number of intangible benefits to
being a Tesla owner. The Model S had been designed to ensure
a 5 star safety rating, giving its drivers and their families’ piece
of mind. There is also the positive feeling the owner receives for
being the driver of a zero emissions car.

Tesla said, “We believe the intended combination of

performance, styling, convenience and energy efficiency of
Model S will help position it as a compelling alternative to
other vehicles in the luxury and performance segment.”

Market Analysis before launch of Tesla Model S:

The market segment that was targeted had been identified as

primarily males ages 25-60. They tended to have good jobs,
are at a comfortable stage in their lives, and have an annual
household income of $100,000 or more. They live in urban or
urban fringe areas. Some of them can have up to 2 hour

!14
commutes to work and want a luxury vehicle to make the
long ride enjoyable. Many of Tesla’s target consumers were
parents. They wanted a high performance luxury vehicle for
themselves but needed the room and the safety for their
families as well. In addition to being responsible for their family
consumer was environmentally responsible. It was analyzed
that Tesla’s consumers had a “West Coast” mentality
concerning their attitude towards the environment and being
on top of trends. In regards to the product diffusion curve the
Model S targeted innovators, a group of well-informed
consumers who were willing to take a risk on an unproven
product. This group made up 2.5% of consumers. While Tesla
targeted its sales on the innovators its marketing efforts also
focused on educating the early adopters who made up the next
13.5% of consumers.

Tesla’s ,marketing research stated that Pike Research

forecasted, the plug-in electric vehicle (PEV) market was
expected to grow at an annual rate of 20% over the next 5
years. Although
Tesla’s Dealer strategy and high price point was the limit for its
market access, Tesla’s market share in the United States was
still expected to grow from 2.2% in 2011 to 4.6% by 2017. This
number was also expected to increase if the price of gasoline
continues to rise. Tesla’s target market segment was U.S.
families with annual income of $100,000 and above. This target
market segment included about 12.4 percent of the U.S.
population in 2009.

Tesla Motors manufactured fully electric cars that did not

depend on gasoline. Many consumers viewed electric/hybrid
cars as innovative and environmentally friendly, but the cost for
the vehicles far outweighs the benefits. The consumer is also
paying for a car that is less stylish and much slower than a
cheaper, gasoline dependent, alternative. However, Tesla has

!15
developed a line of luxurious electric vehicles that harbor both
performance and style, while still maintaining a competitive
price. Tesla’s Model S is designed to be the best performance
sedan on the market and is the most affordable to targeted
market segment.

The Model S served and still serving both the consumer’s

wants and needs. Consumers wanted to stop paying for
gasoline, especially if prices continue to rise. There was also a
trend with U.S. consumers wanting to reduce their carbon
footprint and live more eco-friendly lives. Consumers also
needed a reliable car that can get them from point A to point B,
with the versatility and practicality to accommodate family,
groceries, or golf clubs.

The Model S offered a variety of features for the consumer.

First, it has the ability to travel 300 miles and more on a
single charge. It can also do 0-60 in 5.6 seconds with a top
speed of 125 mph. The convenience of being able to plug the
Model S into a 120 volt wall outlet was also proved to be an
attractive feature for the consumer. Despite the various
amenities of a premium luxury sedan, the Model S boasts a 17’’
vertical LCD display that seamlessly controls the entire vehicle
with the touch of a finger. “The touchscreen, digital instrument
cluster, and steering wheel controls seamlessly integrate media,
navigation, communications, cabin controls and vehicle data” to
provide luxury and comfort to consumers.

Based on the price range of competing luxury sedans, Tesla’s

target consumers were willing to pay upwards of $60,000 for
style, performance, luxury, comfort, and safety. In 2013,
there was only 18 Tesla dealerships in North America, which
made it difficult for consumers to view and purchase the
product. However due to the limited number of models
available and the high demand for the product, Tesla had
successfully taken pre-orders online and directly delivered the

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product to consumers’ homes. Demand was limited by the
number of cars that Tesla was able to produce, but at the same
time this helped to drive demand by provided a sense of
exclusivity to owners of a Tesla.

Business Orientation:

The demand for Gen3 Tesla cars are estimated based on the
growing market of Electric Vehicle and hybrid market over the
next 5 years. Tesla has ability and resources to increase demand
if the market grows beyond their estimation. With expansion of
supercharger station vehicles will be more appealing to the
market. The strategy of Tesla is to grow Tesla’s market share
in the Electric Vehicle / Hybrid marketplace by 5% over the
next 5 years and provide a 20% ROI(Return on Investment)
for the last 3 years, with no losses after the first year. The plan
will bring in total of $7,816,354,565 over five years in
revenue and total of $1,605,493,432 will be profited.

Industry and Competitors Assessment:

Tesla Motors is unique in that it has essentially positioned itself

in its own industry. There are no other companies on the
market that offer both the fully electric capabilities and the
luxurious features that Tesla offers. To market the Model S,
Tesla will be competing in both the luxury automobile market
as well as the electric vehicle market. The luxury automobile
market defined by Bloomberg BusinessWeek includes all
vehicles that feature added amenities at an additional cost. The
category includes luxury minivans, SUVs, convertibles, and
sedans. The electric vehicle industry will be defined as any
vehicle that utilizes electricity to supplement the use of
gasoline.

Since there is little price sensitivity in the luxury car market,

companies must compete primarily on product differentiation.

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The key success factors for the luxury car industry are comfort,
innovation, quality, and safety. Consumers are willing to pay
more for one luxury car over another because of the perceived
value and prestige of owning a car with such attributes as the
latest technology, the most comfortable driving experience, the
performance to handle all conditions, and superior safety and
crash test ratings.

The key success factors for the electric vehicle industry are
price, range, charging rates, and total battery life. Oliver
Wyman, a global consulting firm, stated in its Comprehensive
Study on innovation in the Automotive Industry, “Most drivers
want sound, reliable products at affordable prices. The total
cost of ownership will remain the most important buying factor.
To remain competitive in the industry, firms need to ensure
that the electric vehicle technology they provide is still
affordable to the U.S. consumer. At the same time, consumers
demand the latest technology that increases the distance a
vehicle can travel on one charge. This is especially important
with the limited number of charging stations currently available
in the U.S. Also, with the limited number of charging stations
available, comes the importance of charging rates.
Consumers want a product that is convenient and easy to
use, that charges both quickly and effectively. Battery
lifespan is also an important factor that consumers take into
consideration. Different companies use different batteries that
influence the overall product by either costing less or lasting
longer. Finding the right mix between price and durability of
the battery will determine a company’s success in this category.

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Competition:

For the purpose of this analysis we will consider Tesla Motors’

direct competitors to be companies competing exclusively in
the luxury electric car market. Indirect competitors will include
companies who have offerings in the luxury electric car market,
but whose sole business does not rely on this segment.

Based upon the above definition, Tesla Motors’ direct

competitor is Fisker Automotive. Fisker currently offers one
model, the Karma, which has “the ability to toggle between the
all-electric Stealth Mode or the fuel assisted Sport Mode with
the simple shift of the paddle.” The Karma’s luxury,
performance, and features combine together to form a car
comparable to Tesla’s models. At a price point of $95,900, the
Karma is a direct competitor to the Tesla Roadster priced at
$109,000.

Indirect competitors for Tesla Motors include BMV, Lexus,

Mercedes-Benz, and Porsche. BMV currently offers what they
refer to as an Active Hybrid in its 7 and 5 series sedans. The
Active Hybird 750i is priced at $97,000 and the 750Li is priced at
$101,000. The Active Hybrid 5 will compete directly with Tesla’s
Model S with a MSRP of $60,950. Lexus has developed five
hybrids with its CT, HS, RX,GS, and LS models. Prices range from
$29,120 for the CT Hybrid to $112,750 for the LS Hybrid. The
Lexus GS sedan, priced at $58,950, will attempt to steal market
share from Tesla’s Model S. Mercedes-Benz currently has one
hybrid available, the S400 that while not a competitor to the
Model S, will be a competitor to Tesla’s other models at an
MSRP of $91,850.Porsche is another competitor to Tesla with
its Panamera S Hybrid and its Cayenne S Hybrid. While the
Panamera S Hybrid has a MSRP of $95,000, the Cayenne S
Hybrid will compete directly with Tesla’s Model S at a price
point of $65,000.

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Tesla Motors’ advantages over its competitors revolve around
its core competency of creating entirely electric vehicles. Fisker
Automotive claims its Karma has a range of 300 miles that
would match the range on Tesla’s 85kwh battery option.
However, since the Karma operates on electricity or gasoline,
only 50 of the 300 miles can be attributed directly to the
electric driving range compared to its indirect competitors,
Tesla has the advantage of a strong brand image.
Tesla is known for its creation of luxury electric vehicles,
whereas its competitors’ offerings can be lost in their
company’s product mix.

Competitors in the industry rival Tesla through the strong brand

awareness already created through traditional markets. This
brand awareness is supported by a greater number of
dealerships throughout the United States; in 2012, Tesla only
had 18. Without a significant number of dealerships, consumers
cannot physically touch the car. Since the electric vehicle
technology is relatively new, the ability to easily test drive cars
is a major advantage for competitors. These competitors also
have the convenience of a prior customer base from which to
draw new hybrid users. While this may help push a product to
consumers, it could also be a disadvantage for competitors if
there has been any negative publicity associated with the brand
name prior to the hybrid’s introduction. However, through the
success of their traditional cars, Tesla’s competitors have
greater profits to invest in marketing and advertising campaigns
to promote a positive image. Tesla was increasing its marketing
and advertising campaigns each year, but has limited funds due
to the intense amount of research and development the
company must conduct to ensure it has the most innovative EV
technology.

Tesla’s model S strives to provide a luxury sedan for enthusiasts

who want the prestige of a Tesla Roadster with the affordability

!20
of a traditional luxury sedan. With an entry price point of
$50,000, many companies were attempting to compete by
offering hybrids comparable in price. While no company has
the technology that can compete directly with Tesla Motors’
300 miles on a single electric charge, the distance these hybrids
can travel is increasing. Since these other companies have
larger budgets than Tesla, they will likely invest more capital
into research and development in an attempt to match Tesla’s
technology.

As the technological gap begins to decrease, companies such as

BMW, Lexus, and Mercedes will have an advantage over Tesla.
These other companies will have economies of scale as they will
be able to mass produce at lower costs due to their larger
production facilities. Tesla will need to constantly stay
innovative and differentiate itself to remain the leader in this
industry.

!21
CHAPTER - 2

!22
Marketing Orientation:
Marketing Objectives:

The three marketing objectives for this campaign are:

1) To position the Model S as an affordable sedan in the luxury

market,

2) To raise awareness and educate consumers on the Model S

and Tesla Motors as a whole, and

3) To have new buyers as a significant portion of the customer

base.

Marketing Strategies:

The Model S rely on concentrated target marketing. While the

luxury electric and hybrid market is small, the Model S will
attempt to capture a large market share through its position as
an entirely electric sedan. This niche strategy will allow Tesla to
use value pricing to capture the consumers’ perceived worth of
the car. At a $50,000 price point, the target market for the
Model S will be males ranging in age from 25-60 years (with or
without families), that have household income of $100,000 or
greater. To market itself, Tesla has formerly relied upon word
of mouth advertising and the idea that, the owners are the
ambassadors. To market the Model S, the strategy will utilize
this strength, but on a grander scale.

The marketing strategy for the Model S will revolve around the
message, We don’t inherit the
Earth from our ancestors, we borrow it from our children.” The
strategy will require two integral parts. The first part involves

!23
strategically placing ads in magazines and newspapers to target
our specific market. The second part of the strategy is to bring
the car to consumers on a documentary road-trip across the
United States. Unlike the first part of the campaign, this part
focuses on reach, introducing a product to a large number of
potential consumers. The integration of these two parts will
effectively market the brand and introduce a new product to
new consumers in a vast number of geographic locations.

Mission, Vision and Core Values:

Mission:

Tesla’s Mission statements is ‘To accelerate the advent of

sustainable transport by bringing compelling mass market
electric cars to market as soon as possible.’

Vision

At the core, Tesla, Inc. believes electric cars should not be

perceived as a sacrificial mode of transportation. Tesla, Inc. has
brought the best of both the automotive and technological
worlds together by permanently etching the image of electric
cars being a step backwards in performance, efficiency and
design. Tesla, Inc. key is the 100% electric powertrain which not
only propels us in the present, but simultaneously establishes a
strong foundation for the future. Tesla has produced a car that
is finally beautiful, and exciting to drive along with being the
most efficiently produced automobile on the planet.

Core Values:
 A clean start
 Committed to Electric
 Built around the driver
 Sparking the evolution

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Current Target Market:
Target:

Tesla’s current customer is purchasing the Model S vehicle.

Most of the customers are successful business executives and
entrepreneurs, they are tech savvy and green friendly. These
are wealthy and early adopters whose income levels put them
in the upper-middle class segment.

Segment:

Tesla is targeting individuals who are upper middle class baby

boomers with typical incomes of over $100,000 which is based
on 77% of our buyers falling into this particular segment. The
majority of the segment is predominantly male.

Positioning

The Model S will be positioned as the image, product, and

service leader in the industry. The Model S will lead in image as
it will be the only entirely electric luxury sedan in the
marketplace. After a $7,500 federal tax credit, the model S is
set to be offered at a price point of $49,900 for its 40kwh
battery option. This price point positions the model S at a lower
price than its competition, even with the Model S having
comparable or greater features. Tesla’s strong customer
service is relayed to consumers by the company’s willingness to
send technicians directly to the houses of owners. Combined,
these three factors helped to position Tesla as the leader of the
market.

!25
Current Customer Value:

Reliability: Report on customer’s view says customer feels that

Tesla is more reliable than any of its competitor in market who
are offering hybrid cars. Onsite Service with minimal or no
efforts win the goodwill to brand Tesla.

Owner Satisfaction: Targeted segment owner found there

satisfaction level highest by owning the Tesla Cars which are
advance in technology and ecofriendly.

Marketing Mix:
Product Decisions

The Model S is a four door, five passenger luxury performance

sedan. It is an electric car with exceptional style, performance
and functionality. The Model S is accelerate from 0 to 60 in
under 6 seconds. Currently, the estimated range is 160 miles
to 300 miles on a single charge based on battery options. The
Model S will be available as a standard edition and as a
Signature series edition, which will have additional options such
as an extended color selection. The Model
S’s battery will charge in 45 minutes at commercial charging
stations and will have a rapid swap out option at specialized
battery exchange locations. Additionally, the Model S is
designed to have a third row seating with two additional child
seats. Twenty-nine cubic feet 20 storage will be available under
the hood and the tailgate compared to the fourteen cubic feet
of competitors. The Model S had a 17” driver interface
touchscreen which provides access to wireless connectivity,
such as 4G, infotainment options, and climate control options.
To reduce Tesla’s impact on the environment, the interior has
been designed and built out of banana leaf, carbon fiber, and
alcantara. The glass panoramic roof is constructed of safety
glass and provides protection from 93% of visible light and 79%

!26
of heat, which helps control the inside temperature. The Model
S key is innovative in itself as it is programmed to the
preference of the individual driver.

As the key approaches the vehicle the drivers’ preferences, such

as seat position, are loaded and the door unlocks and then the
car turns itself on once the driver’s side seat is buckled. LED
lights illuminate the door handles which retract when not in
use. To add to the features of the car, the
Model S’s music system can be connected to a streaming radio
station or to mobile devices. In addition to the Model S, Tesla
offers its roadster, Model X and Model III is expected in 2018.
The Roadster has raised awareness of Tesla as a brand and its
ability to develop cutting edge products.

To effectively market the Tesla brand, the overall campaign is

focused on the message, “we don’t inherit the earth from our
ancestors, we borrow it from our children. Tesla wants the
Model S to be the car that not only competes with the legacy
carmakers, but that allows every Model S driver to leave a
legacy of responsible earth friendly decisions. Every Model S
driver will be providing future generations with a positive image
to follow. By implementing the idea of leaving a legacy, Tesla
will not only be able to market the Model S, Model X and
upcoming Model III as a luxury vehicle, but also as the only
vehicle that an eco-conscious consumer would purchase. This
branding aligns with Tesla’s values of innovation, commitment,
connection and cataclysm; all of which, when achieved
successfully, leave a legacy.

!27
Product Life Cycle:

Above Product Life Cycle figure shows the product life cycle in
Russian market, where Tesla is going through Growth stage,
after maturity the growth in market is expected to decline.

To control this decline, Tesla, Inc. has already planned to launch

more advanced electric cars which will target several market
segments to increase the market share and profit as well.

!28
Above figure estimated by Morgan Stanley Research predicts
that, Tesla will launch more advance and affordable products to
targeted segments to maintain the growth as the king of the
market.

Product Portfolio:

In Boston Consultancy Group Growth matrix, Tesla Model S and

X lies in Stars quadrant, since both products are continuously
growing by market share and market growth.
H -

Model S

Model X

H
- -

!29
As per above figure and changing behavior in North American
Market, based on Tesla’s June 2015 report, Tesla Model S is
champion in the targeted segment. And Tesla Model X is also
doing well. As per the performance of launched products and
market response is more than expectation, which aligns Tesla
products in Star quadrant.

Pricing

The Model S is priced to maximize profit and demand by

utilizing a value pricing strategy. The Model S with a current
base ticket price of $65,400, allows the Model S to compete
with both the hybrid market and the luxury market. The price
variations are based on the battery size and features. The
second tier Model S has a battery of 60 KWH and costs $67,400.
The third tier Model S has a battery of 85 KWH, and is priced at
$77,400. The Model S performance model starts at $92,400
and includes an upgraded suspension and interior. The
Signature series costs $95,400 and is available in signature red.
The Signature performance costs $105,400 and includes the

!30
performance upgrades and the signature red color. U.S.
Consumers will also qualify for a tax rebate of up to $7,500
after purchasing the Model S as long as the rebate program
continues. Overall ownership cost is as low as 3.1 cents per
mile based on the average cost of electricity in the U.S. In
comparison the overall ownership costs for Toyota Prius is 5.7
cents, and 13.2 cents for a Porsche Carrera based on gas prices
of $2.86 per gallon. With gasoline prices in the U.S. consistently
rising, the Model S’s proposition will only increase in value.

Place and Distribution

Tesla sells and markets its cars directly to its end consumers
through its stores located throughout the world in North
America, Asia and Europe. The company currently has several
sales and service locations in the United States ranging in areas
from California to Illinois to Florida. The first store was launched
in 2008 in Los Angeles. Tesla characterizes its stores as “highly
visible, premium outlets in major metropolitan markets that
engage and inform potential customers about electric vehicles
in general and the advantages of the Tesla experience in
particular.

Tesla does not engage in distribution through franchises. They

“believe that by owning [their] sales and service network [they]
can offer a compelling customer experience while achieving
operating efficiencies and capturing sales and services
incumbent automobile manufacturers do not enjoy in the
traditional franchised distribution and service model. In 2012,
Tesla only had 18 sales and service locations around the US,
which has currently improved significantly and while this may
be suitable for the Tesla Roadster who appeals to exotic,
premium sports car buyers, we believe that this distribution
network needs to be expanded for the more “mainstream”
Model S. As much as we would like Tesla to expand and build

!31
several more sales and service locations in strategic cities
around the world, Tesla does that have the capital to do this.
Therefore, Tesla took advantage of their strategic partnership
with Mercedes.

Mercedes has hundreds of franchised dealerships around the

United States. Tesla used these dealerships to advertise, sell,
and market their new Model S to gain maximum coverage and
access to consumers. This enabled Tesla to expand its
distribution quickly without investing in major capital assets. In
the long run, when Tesla has the capital, Tesla is expanding
their owned distribution network to cover the majority of cities
around the US, Europe and Asia.

Tesla is selling its product using Direct, Push and Pull strategy.
Mostly A pull strategy is used to sell the Model S and Model X.
The advertising campaigns are creating buzz around the new
Model S, Model X and Model III and customers are flocking to
Tesla and Mercedes dealerships to purchase the Model S and
Model X.

!32
CHAPTER – 3

!33
Promotion:

Integrated Marketing Communication:

As stated previously in the marketing strategy section, the

message of the marketing campaign is, we don’t inherit the
Earth from our ancestors, we borrow it from our children.”
This aligns with the company’s goals of creating a luxury
performance sedan that is both eco-friendly and family friendly.

The plan has two integral parts:

1) The strategic placing of ads in magazines and newspapers

to target our specific market, and

2) A documentary road-trip across the United States that

brings the car to consumers to showcase its features and design.
In order to effectively implement this marketing strategy for the
Model S, and Model X Tesla utilized all elements of the
promotion mix.

Advertising:

To advertise the Model S successfully the entire advertising

budget will be directed towards magazine ads. We considered
print media to be more cost effective and more efficient than
alternative forms of advertising. Television ads reach a large
audience, however at this point in time Tesla’s is not ready for

!34
mass marketing. Tesla has a specific target market and
television advertising will not allow Tesla to zero in on them.
Furthermore, the average cost of an ad during prime-time is
nearly $110,000 per airing. Because Tesla is a luxury brand with
limited dealerships and sales promotions, radio advertisement
is not seen as an effective means of communication. More
importantly, because the Model S, X and upcoming Model III
and the Tesla brand are not familiar to most of the consumer
public, visuals are going to be imperative in its advertisements.
Newspaper advertisements were considered to complement
the magazine ads, but were not selected due to the fact that it
is highly unlikely that the newspaper will be shared with more
than one person, as well as the high costs associated with an ad
that will only appear one time.

To communicate the marketing message to consumers, Tesla

will advertise in Car and Driver, Wired, BusinessWeek, and
Forbes magazine. These print outlets were chosen based on
the target market’s values and lifestyle. Considering our target
market is 25 to 60 year old males that are making $100,000 a
year or greater, all four magazines cater to this consumer. Car
and driver has a total audience of nearly 9.75 million people, of
which 90.8% are males. The magazine also specifically targets
our age range with nearly 5.4 million users between the ages of
25 and 49. To further justify the use of Car and Driver, over 3.4
million users have household income of $100,000 or greater.
The use of Car and Driver is intended to specifically target the
car enthusiasts in our target market and generate buzz in the
car community through the strong word of mouth advertising
that Tesla has formerly enjoyed.

Wired magazine was chosen based on the fact that our target
market is in the innovators group; they are well informed tech
savvy consumers. This magazine attracts that type of reader.
The total audience for Wired is just over 3.2 million of which

!35
75% are males. The median age for the magazine is 34 years,
and the median household income is just shy of $86,000. This
again is a very specific market, but it follows the niche strategy
of targeting a large number of customers within a small market
segment.

To broaden the company’s advertising reach the company will

also invest in ad space within Bloomberg’s BusinessWeek and
Forbes magazine. This will still target Tesla’s specific target
market but it will have a broader base than the specific
interests of Car and Driver and Wired. BusinessWeek currently
has a total audience of 4 million, of which 63% are male. The
median age is 46.3 years and the median household income is
$101,076. Forbes magazine boasts an audience of 5.1 million
people, of which nearly 3.5 million are men. With a median age
of 43.1 years and 2.3 million users with household income of
$100,000 or greater, Forbes magazine not only reached Tesla’s
target market but generated buzz within the business
community about an entirely electric, affordable, luxury
performance sedan.

To maximize the potential return on investment, these ads

strategically placed within these four magazines in a cyclical
flow throughout the 12 months from July 2012 to June 2013 for
Model S and still going on periodically for Model X and
upcoming Model III. The per issue costs for each magazine are
broken down in Exhibit 2 and show the total costs for one ad in
all four magazines to be $496,000. If each magazine is utilized 3
times a year that brings the total advertising budget to
$1,488,000. This method of reaching the target market will be
most effective because it will reach a large number of
consumers without a frequency that is oversaturating the
market. Exhibit 3 shows the projected timeline of when each
advertisement will appear in each magazine. Car and Driver will
featured an ad in July, November, and March; BusinessWeek

!36
featured an ad in August, December, and April; Wired featured
an ad in September, January, and May; and Forbes featured an
ad in October, February, and June. This plan ensured that the
advertisement is consistently seen throughout the year within
the various magazine outlets.

Sales Promotion

Consumers who purchase luxury performance sedans are highly

price insensitive, purchasing cars more on the quality,
performance, and features rather than on a specific price point.
Based on this knowledge, sales promotion will not be a
significant factor in the promotional mix. However, since Tesla
has received strong support from the United States
government, the company will be able to stimulate demand for
the product by offering a $7,500 federal tax rebate on the
Model S. This will entice Tesla’s target market because they
represent a portion of the business community that will
appreciate the greater value achieved through the savings.

!37
PR, Personal Selling, Direct Marketing, and Interactive Marketing:

As aforementioned the second part of the campaign is to

document a “road-trip” across the United States. The road trip
will commence in Tesla’s home of San Francisco at the
beginning of August and drove in an S shape across America
finishing in New York at the end of the month.

There are three distinct benefits to this campaign. The first is

that it is highly interactive. There was a constant
communication between the campaign and Tesla’s potential
customers through social media platforms such as Facebook
and Twitter, allowing them to follow the Model S on its Journey.
As the car travels across the country, it will be photographed
with beloved American landmarks, such as the Grand Canyon,
Route 66, and the Space Needle. These photos will be instantly
uploaded to Tesla’s social media platforms to juxtapose the
Model S legacy against the monumental legacies left by
America’s history. In addition Tesla will be employing a film
crew to document the journey. The documentary will be
distributed through Tesla’s YouTube platform. Beyond simply
the entertainment value, the documentary will highlight the
many features of the Model S. For a company that may not be
in the financial position to afford a television commercial, this
comparably low production cost video distributed through free
media is a great alternative (Exhibit 2).

The second benefit is that it puts the Model S in front of the

consuming public. Every stop along the way the team of Tesla
sales representatives will be setting up a showcase of the
Model S in a high traffic public area such as South Beach in
Miami, Navy Pier in Chicago, and Central Park in New York City.
It is important to get these vehicles in front of the consumer,
because even many of the well informed consumers have never
had the chance to see a Model S in person. By hosting these

!38
showcases Tesla will be able to employ personal selling. This
gives Tesla, immediate consumer feedback, the ability to create
unique customer messages, and the opportunity to build
customer relationships. As mentioned, Tesla will be targeting
innovators for sales, but will also be targeting the early
adopters by educating them on the benefits of PEV vehicles and
Tesla in general. These country wide showcases will give the
company the opportunity to do this.

The third benefit is the level of publicity the road-trip is

expected to generate. Although electric cars are viewed as
strictly commuter cars, and for the most part they are, this
campaign will demonstrate that the Model S has the
performance and capability to make it across the country and
back without a single drop of gas. It will be the job of Tesla’s
public relations team to aggressively reach out to media all
along the driving route to generate publicity for its arrival, the
campaign, and the Model S itself. In the past Tesla has
significantly relied on publicity and word of mouth. By utilizing
PR properly this campaign has the potential to continue this
tactic on an even larger scale.

Marketing Budget:

Tesla’s total marketing budget for all business components in

2011, 2010, and 2009 has been $2.9 million, $3.1 million, and
$1.7 million, respectively. Media coverage and word of mouth
are Tesla’s primary marketing outlets; however, in order for the
Model S to gain widespread awareness, the marketing budget
for the Model S alone will be $2.48 million. As mentioned
previously, ads will be placed in four widely read magazines and
journals which will cost approximately $1.48 million (Exhibit 2).
In addition, the one month road trip will cost approximately $1
million (Exhibit 2).

!39
Implementation and Control Plan:

Timeline:

The timeline for the marketing activities begun in July 2012 and
ended in June of 2013 (Exhibit 3). Immediately, in July, Tesla
announced its Road Trip event on various social media
platforms such as Facebook, Twitter, and the company’s official
YouTube channel. Also, a press release was issued on the
company website detailing the Road Trip event. The Road Trip
event took place in August and last for 31 days. Tesla’s
promotions staff was actively informing followers through
Twitter, Facebook, and press releases. After the Road Trip
event, documentaries and user experiences was released
through Tesla’s official YouTube channel. In addition, the
magazine and journal ad campaign also started in July and run
for one year. Each month an ad was placed in one of the
selected magazines. A total of three ads placed in each of the
selected magazines and journals.

Measurement for Success:

With regards to the Model S, Tesla aimed to produce

approximately 20,000 of them annually starting in 2013. For this
campaign to be considered successful Tesla expected all 20,000
Model S’s to be sold in 2013, and for this rate of sale to
continue on an annual basis. However, with this marketing
campaign, specifically in regards to the Road Trip Event, Tesla
aimed to sell an additional 10, 00 Model S in 2013. The goal of
the Road Trip Event is to gain brand awareness and this was
measured through viewership on Tesla’s Facebook, Twitter, and
YouTube accounts.

Since the Road Trip Event rely heavily on these three channel’s
Tesla expected their viewership to increase dramatically. As of

!40
today, Tesla’s Facebook account has over 76,866,000 likes and
30000 people talking about Tesla Motors. Tesla aimed for
“likes” to increase by 40 percent by the end of 2012 and
increase overall by 60 percent by June 2013. For people talking
about Tesla on Facebook, we expect this to increase by 80
percent by the end of 2012 and increase by 100 percent overall
by June of 2013. Tesla currently has over 7,550,000 followers on
Twitter and our goal is to increase the amount of followers by
40 percent by the end of the 2017 and for them to increase by
70 percent overall by June 2017. Tesla’s YouTube channel has
over 945,000 subscribers and over 24,500,000 videos views. If
these targets are reached, the marketing plan will be deemed
successful.

Exhibits

Exhibit1

Year Annual Average Revenues COGS* Gross Profit

Report Price
Expected
Annual
Sales(Cars)
2012 8000 $59,900 $479,200,000 $333,560,784 $145,639,216
2013 20,000 $59,900 $1,198,000,000 $833,901,961 $364,098,039

!41
Exhibit2:
Model S Marketing Budget $2,479,000

Magazine Placements Per Issue Cost 3 Issues for year

Business week $156,000 $468,00
Wall Street Journal $132,000 $396,000
Car and Driver $90,000 $270,000
Wired $115,000 $345,000
Total $493,000 $1,479,000

Road trip – 1 month Cost

Film $250,000
Labor &50,000
Permit Cost $6,000
Hotel $139,500
Advertisement $50,000
Tour Bus $46,500
Food $19,530
Miscellaneous $438,470
Total $1,000,000

Exhibit 3

2012
Activity July August September October November December

!42
Road Road Trip
Trip
$1,000,000
Magazin CAR Business WIRED Forbes CAR Business Week
es DRIVER Week DRIVER
$115,000 $135,00 $156,000
$90,000 $156,000 0 $90,000

Media/P Announce Actively Release Release Release Increase:

R Road trip document documented docume documente
YouTube:
on footage nted d footage
Road Trip
facebook, from road footage from road Subscribers+40
on
twitter, trip from trip %
website, road
website
Twitter, trip Facebook:
and
and likes +40%,
othe
Facebook people talking
r
+ 80%.
social
media. Twitter:
followers +
40%.
Total $90,000 $1,156,000 $115,000 $135,00 $90,000 $156,000
Cost 0
2013:
January February March April May June Total
$1,000,000
WIRED Forbes CAR Business WIRED Forbes $1,488,000
DRIVER Week
$115,000 $135,000 $115,000 $135,000
$90,000 $156,000

!43
 Overall
increase:

YouTube:
+60%

Facebook:
Likes+60%,
people
talking
+100%

Twitter:
Followers
+70%
$115,000 $135,000 $90,000 $156,000 $115,000 $135,000 $2,488,000

Tesla’s major competitive advantages:

Success story of any organization is additionally scrutinized by
market experts and the public. As per scrutiny at different
levels, it is indisputable that Tesla has offered a next level
solution for vehicle, consumers seeking an alternative to
traditional gas-powered options.

Tesla’s competitive advantages over competitors can be clearly

understood by following points where few points are tangible in
nature and few points are intangible.

Self-reliance on core competencies: TESLA is focused on their

mission and vision and since battery is big part of Tesla’s
advantage so that rather than depending on some other
vendors they are building their own battery supply chain (and
may be for some loyal friends such as Mercedes)

!44
  Battery packs of Tesla are cheaper than other EV
batteries available in the market

 Tesla has approach to continuously improve the

efficiency of batteries and its production unit
Gigafactory is focused on scaling up production of
batteries, which is an important side of advantage
over other competitors.

 Supply chain management of TESLA is excellent in

class, they collect their resources in very efficient
manner than its competitors.

 Tesla’s batteries are valuable for beyond electric

vehicles, e.g. stationary energy storage.

It has wonderful Supercharger Network:

 Tesla has built Its own Supercharger Network [or

networks]

 They are providing ubiquitous fast-charging

stations.

Software that is several leagues above the competition

 Tesla approach to software is much above the

competition.

 Tesla’s software package is able to handle o Core

Focus and Tesla DNA o Battery Voltage

Management o Motor Control o Diagnostics o

Touchscreen o Mobile App

!45
 o Traction and

Stability Control o

Complete over the air

updates and so on.

 Tesla’s cars are described as big machines with small

computers in them, since, in future computer for
different components are imagined, and Tesla is leading
us there.

 Tesla’s software team rolls out over-the-air updates like

we get on our smartphone, tablets, computers,
continuously improving owner vehicles.

 As per Tesla’s presentation, Even “recall” can be done

virtually.

A reputation for building superb products that “WOW” people.

 Tesla has developed reputation for producing superb

products.

 The Tesla Roadster transformed the image of electric cars

from small, slow vehicles to blindingly fast vehicle of
desire.

 Tesla produced the cheaper Model S sedan that ended up

winning just about every big auto award.

 Quickest production sedan in history [0-60 mph

acceleration that beats even some supercars]

Reputation for wanting to serve customers in direct, honest way

– not just take their money.

!46
  Customer is focus: Tesla has shown repeatedly that it
cares more about providing the customer with good
service, a good product, and honesty than making little
more money off of them.

 Goodwill for integrity and morality.

Microenvironment Affecting Tesla :

• Political: Governmental norms has been working positive

for Tesla in majority of the countries. Sustainable energy
being the main goal has been the key factor in attracting
the Political conditions of a country. Government is also
issuing incentives for the purchase of Electric Vehicles
(EV) keeping in mind the Carbon free emissions. PESTEL
analysis looks at the Political factor more as an
Opportunity to Tesla Motor’s.

Fig. EV Incentives in Tesla’s Main Markets

!47
CHAPTER - 4

!48
• Economic Factors:
One of Tesla’s goal is to sell EV at a much
lower price compared to any other
automotive counterpart. This factor has
largely attracted massmarket buyers and
governments to provide incentives focusing
on a clean and sustainable environment.
PESTLE analysis is positive in Economic
factors with respect to Tesla.

Sales
Growth (%) Vs GDP  Expected
Sales Growth:

Fig 5., Sales Growth

(%) Vs GDP

!49
• Social Factors:

 Low-carbon emissions is one Strength of

Tesla, with the entire world trying to adapt
to Renewable energy. PESTEL Analysis sees
this as an Opportunity and Growth factor
where they can Harvest. With Strength and
Opportunity going hand-in-hand
Capitalisation would be a wiser decision to
make. The following graph shows the
estimated price for Non-Renewable resource
therby clearing way for Tesla.

!50
 Expected crude oil prices upto 2025

o Technology: With the rate of growth of technology

every second this seems to be a threat for Tesla.
Until the competitors in market don’t find an
alternative resourse that could outstand the
performance of Tesla, they are on the safer side.
With Strength and Threat taking upper hand ,Tesla
has to work on improving their technology in
alternative resources.

Increased battery production in

GigaFactory upto 2020 after Tesla
Model S &X
• Environmental Factors:
Creating awareness among public is one key factor
in which Tesla can increase their opportunity to
sales. Waste disposal standards can easily convince
the government thereby promoting sales. PESTEL
analysis concludes Environmental factors to be
Opportunity for Tesla.
• Legal:

!51
 Expanding international patent protection, energy
consumption and dealership sales regulation are
the factors that affect Tesla legally. Though
expanding boundries and energy consumption can
increase opportunity dealership sales regulation
pose a threat according to PESTEL analysis. With
the support of government laws & regulations they
will be able to regulate the legal factors.
Micro Environment:
The factors that affect the Micro environment according
to the Poster’s analysis is as follows: (5 force analysis)

1. Strong competitors
2. Bargaining power of Customer
3. Bargaining power of supplier
4. Growth of technology leading to substitute for
alternative energy
5. Less experienced

1. Strong Competitors: Tesla has small no.of firms

comparing to anyother automotive counterpart.
Eventhough this seems to be a threat this can be
overcome if those firms are aggressive in production.
With Tesla providing a very low cost, this possess as a
strong competition for other automotive companies.
2. Bargaining power of Customer : Tesla’s marketing
strategy of Direct sales influences the bargaining power
of customer. More the sales more benefit and vice-versa.
With the Pull strategy playing a major role, Tesla still has
an upper hand.

3. Bargaining power of supplier : With low cost, renewable

fuel Tesla has attracted both Environmentalists and

!52
 Government. Government having incentives issued for
Tesla’s product is a positive factor.
4. Growth of Technology : Keen eyes of all the Automotive
counterparts on Tesla Motors
pose a threat if Tesla doesn’t work on its technology. It
would be easy for its counterparts to overtake it in such a
case.GigaFactory being a good initiative, Tesla has upper
hand.
5. Less experienced : With not much experience in the
domain of Automotive Industries Tesla’s Market Analysis
and Marketing Strategies have been key factors for
where it is today. Improvement on R&D and continuous
realizations can keep the firm going. SWOT Analysis:
Internal Analysis
Strengths: • Opportunity:

Ability to R&D vehicle and Growing support of Govt for

manufacture the vehicles • clean energy.
•
within the company.
• Growing gas prices.
Supplies other organizations
Innovative Technology
• with parts.

• Developed the first full electric

car.
•
Technologically superior in
drive train, transmission, and
electrical technology.

!53
 Weaknesses: Threats:

Higher cost with innovative Current business model Tesla

technology can only produce a limited
amount of vehicles increasing
• High price due to low demand • the chance of competitor
for electric car.
• stealing market share.
Small segment to target
Competing against strong
including early adopters.
• • competitors
• Lower priced vehicle

SWOT: External Analysis

Strengths: Opportunity:

Innovative culture New full electric car

• • segment
Financial Strength
• • International expansion
• Innovation in technology • Innovative New products

• Customer Loyalty • Growth of economy

• Brand awareness • Demand increase of luxury

vehicles.
Weaknesses: Threats:
• Weak customer service • Intense competition

• High cost of production • Gas prices

• Change in taste

!54
 Increase in cost of raw
•
materials
Technology problems
•

Summary:

Tesla Motors, Inc. is a unique and innovation based automotive

company founded by Elon Musk.
Tesla is responsible for changing the world’s perception of
electric vehicles. Through innovation, Tesla has proven that one
can create a vehicle that encompasses speed, luxury, and eco-
friendly attributes, while still maintaining an affordable
price. Tesla’s Model S and X are the answer to how the world
will drive sustainable energy and innovation into the future.

The purpose of this study was to understand the emergence of

TESLA and its products, the organization’s current orientation,
its competitive advantages, marketing mix practices currently
used by the company, the impact of these practices within the
organization using different analysis methods and Marketing
strategy of Tesla for the model S and X.

!55
Tesla’s vehicles are a fully electric high performance luxury
sedan. What sets it apart from its predecessor is a base price of
less than half. At an affordable $68,400 to $135,500 in luxury
car segment for the Model S and X which can be marketed to a
larger target market than ever before. The target market was
identified to be primarily males ages 25-60 living in urban areas
with an annual household income of over $100,000.
Additionally they are tech savvy and environmentally conscious.
It was chosen to target this segment through use Tesla’s first
paid advertising campaign as well as a variety of promotional
techniques.

The very strong message used in promoting the Model S was

“We do not inherit the earth from our ancestors; we borrow
it from our children.” This message was chosen for its

!56
emotional and moral appeal to the target market. The message
was relayed through the use of print media because was seen
as the best way to target the chosen market as well as being
cost effective in comparison to alternative modes of
advertising. Car and Driver, Wired, Business Week, and Forbes
magazines were chosen because their readers reflect the target
segment of the Model S. To ensure that the Model S has an
advertising presence year round, it was proposed that full page
ads be taken out in one of the four magazines each month for
three cycles.

An additional promotional campaign was generated to

spread the marketing message and educate the
consumer public. The purposed campaign is to
document a Model S’ road trip across America in an S
shape from San Francisco to New York City. There were
three advantages identifies with this promotion. The
first is the opportunity to use personal selling and get
the Model S in front of the public. The second is the
interactivity possible by documenting the road trip on
social media and YouTube. The third advantage is the
level of publicity an electric car driving across the
county will generate.

The success of the strategy was measured on three

metrics. The first being the number of consumer
inquiries about the vehicle. The second consist of the
number of consumers coming into Tesla Dealerships to
test drive the Model S and X. The third was the amount
of vehicles sold during the time period of the ad
campaign launch, and also the 12 months following.
The ad campaign was launched in fall of 2012 and last

!57
until January 2013. Tesla projected the sale of 20,000
units in 2013 and a significant part of the plan’s success
was determined on hitting

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Marketing Mix

A. Product Strategy

One distinguishing features of Tesla’s Model S is that it is considered a “green”

alternative to normal cars since it reduces the user’s carbon footprint on the

world (Tesla Motors). The body of the Model S is made of lightweight aluminium

reinforced by high strength, boron steel elements (Tesla Motors) with a total

cargo volume of about thirty-one cubic feet (Tesla

Motors). The Model S comes with a 10 kW capable on-board charger with input

capability of 85-265 V, 45-65 Hz, and 1-40 A (Tesla Motors). Consumers have a

choice between a single charger and a dual charger with which they can reach up

to fifty-eight miles to every eight hours of charging; and, to charge the Model S,

the user can simple use the existing wall outlets found in their homes (Tesla

Motors). While it is incredibly powerful as a vehicle, the entertainment system is

also quite impressive. With a 200 watt seven speak stereo system that has AM,

FM, and HD radio capabilities, it also supports MP3, AAC, and MP4 music formats

(Tesla Motors). The 17inch capacitive touchscreen encompasses media,

communication, cabin and vehicle controls with

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Bluetooth wireless technology for hands-free calling and music streaming (Tesla

Motors). Aside from the entertainment features, the Model S comes with a

new vehicle limited warranty for four years or 50,000 miles, a warranty for the 60

kWh battery equipped Model S and drive unit for eight years or 125,000 miles or

a warranty for the 85 kWh battery equipped Model S and drive unit for eight

years and unlimited miles (Tesla Motors). Both battery warranties “cover damage

from improper charging procedures and battery fire, even if the fire results from

driver error” (Tesla Motors). Also unique to Tesla, are the phone applications

with which drivers can use to check the charging status of their cars. Tesla is also

working with government organisations in order to set up public charge stations

wherever their product is sold.

Generally speaking, Tesla’s competitors are all other car companies. But, what

sets Tesla apart from the rest is the theme of luxury found in its fully electric cars,

an aspect entirely different from the other hybrid cars it competes with. Because

of these luxury features, Tesla is able to compete not only with energy-saving cars

but also the other luxury cars on the market. Tesla’s closest competitors are

vehicles such as the Chevrolet Volt, which is another plug-in electrically charged

car, and luxury brands like Mercedes-Benz and BMW. However, what makes Tesla

different from its competitors is that it is a fully electric car, mainly to be used for

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short distances, such as around town or short road trips. With people becoming

more green-oriented, people still desire a luxury vehicle but also want to leave

smaller carbon footprint. Tesla has created a completely new product answers to

both of these needs (Appendix 9).

Right now, the substitutes for the Model S are electric-hybrid and diesel-hybrid

models, but there still remains the possibility that other luxury brands will create

their own fully electric cars and enter the market. Tesla’s main supplier is

Panasonic. Panasonic provides Tesla Motors with support so that Tesla can

maintain its position at the technological forefront (Rogowsky). While Tesla

conducts sales all over the world, the main concentrations of customers are

located on the west coast of the United States (Rogowsky). However, by the end

of next year, Tesla hopes to double its production and deliver as many cars

outside the U.S. as it is selling here (Rogowsky) (Appendix 10).

As the only fully electric, full-sized luxury sedan on the market, Tesla has few

alternate powertrain competitors. Of its competitors, the most notable are Audi’s

A7, BMW’s 7-Series and ActiveHybrid 7, and Porsche’s Panamera S E-Hybrid.

Audi’s A7 and BMW’s 7-Series offer diesel engine options as their alternative

powertrain where as BMW ’s ActiveHybrid 7 and Porsche’s

Panamera S E-Hybrid both offer combustion and electric engines. The main

difference between the Model S and its competition is its electrical engine

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technology. While the Porsche Panamera boasts its battery can be charged in two

and a half hours by a 240V socket or while driving due to the recuperation energy

generate by breaking or the combustion engine itself (Porsche), the Model S’s

battery can be fully recharged in in an hour and a half with the standard 240V

charger that comes with the car (Tesla Motors). Additional accessories that

decrease the charging time for the Model S are also available for purchase. Even

with a standard 110V house outlet, Tesla’s battery recharges faster than the

Panamera’s by twenty minutes (Tesla Motors). Also, Tesla has built free

Supercharging stations across the United States, and a few in Canada, which the

CEO promises to always be free of charge. These stations can recharge half the

battery in only twenty minutes, and a full charge can be completed in a little over

an hour (Tesla Motors). Currently, there are 119 supercharger stations in the

United States and Canada, and these are strategically placed so cross-country travel

is possible in the Model S without concern for the 244 mile range constricting their

travel (Tesla Motors). As Tesla has expanded their company internationally, there

are also seventy-six stations in Europe and twenty-six in Asia (Tesla Motors). Not to

mention, in the alternative powertrain luxury sedan class, the Model S is relatively

cheaper than its competition starting with a fair price of $69,900 MSRP (Tesla

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Motors) compared to Porsche’s Panamera which costs $96,100 MSRP (Porsche). Of

the Motor S competitors, only the Audi A7 is cheaper at $68,300 MSRP (Audi).

B.Promotional Strategy

Tesla Motors takes a very interesting and risky approach to advertising as it prides

itself on having no advertising campaign. According to editor for Advertising Age,

Michael McCarthy, “Tesla Motors has no advertising, no ad agency, no CMO, no

dealer network. And that’s no problem” (UC Berkeley Extension). Instead, Tesla

Motors relies on a pull advertising strategy, choosing to rely on media vehicles

such as social media, blog forums, and word of mouth to promote its products.

The company goes as far as having Musk write in the Tesla motors blog on the

company website to forecast upcoming products and technologies to look

forward to. The company updates its social media promotions monthly to let the

target market know of any and all new changes and improvements to look

forward to. For this reason, Tesla does not favour promoting in any specific

season, but rather promotes whenever there are new products that can bring in a

larger customer base. The most unique selling point Tesla bases its proposition on

is offering a zero emission sports car. There are currently other manufacturers

that offer electric fuelled vehicles; however, they carry a negative stigma of

weakness and under-performance. Tesla is the first company to create a high

performance car through new and groundbreaking electric fuel technology (UC

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Berkeley 24). The best way to view a Tesla vehicle is through its creative web

page, which allows viewers to learn about the different aspects and technologies

through interactive explanations. Appendix 12 gives one example of the very rare

Tesla brand advertisement. While the company does not pay for a traditional

advertising strategy, they excel in creating consumer buzz and producing very

attractive results with their electric vehicle products.

While most car brands try to maximise their promotional strategy to attract

prospective consumers, Tesla tries to minimise all five elements of the

promotional mix to ensure a unique experience for their consumers. Unlike every

other car brand, Tesla does not promote through dealerships but, rather, in

showrooms in shopping malls. The only place to see a physical Tesla model would

most likely be the closest mall. Typically, a showroom exhibits one single vehicle

in a small shop next to the Bloomingdales, Zara, or Macy’s. In addition, Tesla does

not have any commissioned sales people or inventory because Tesla is working to

move away from the traditional retailing. Tesla’s only advertisement is its mall

showrooms, rarely would anyone see a Tesla commercial or ad. Consumers seek

out Tesla only after hearing about it through word of mouth or seeing the physical

products. Another unique aspect of Tesla is that it has no sales promotion. In fact,

Tesla’s prices are nonnegotiable, and all transactions are conducted online,

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turning the typical personal selling of cars into a technological retail procedure.

Since Tesla does not have an inventory of their products, if a potential consumers

wants to test-drive its cars, they would have to put down a $5,000 deposit. If a

potential consumer would like to purchase a Tesla, they would have to wait for

months as Tesla custom builds their car. Tesla is not only changing automobiles

but also how car brands promote and market their products. (Appendix 13)

Since Tesla is an emerging car company, its still needs to put forth more public

relations efforts. So far, they have taken action by rehiring their old

communications chief Ricardo Reyes. Reyes helped to start up the company in

their early stages, but took a leave of absence to head communications for

another startup company. (Vance) Now, he has returned to run communications

and public relations for Tesla. It was imperative for Tesla Motors to take action on

their public relations after an incident when Musk tweeted unveiling its “D”

(Vance). Musk tweeted that in reference to the Tesla’s all-wheel drive option;

however, the public turned the

CEO’s tweet into a sexual remark which created a huge internet buzz (Vance).

Musk claimed he had no intent to create such an uproar (Vance); however, he

gained a lot of free publicity from his tweet no matter his intent.

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Even with Tesla’s mishaps and evolving communications department, it manages

to promote its product and catch the public’s eye with its tactics. Tesla Motors

prides themselves on not having the pushy car salesman, but having salespeople

who sell an experience with Tesla. The reason Tesla acquires so much publicity

without having an immense amount of advertising is because its ideas are new

and futuristic. As of right now, Tesla’s communications department is based off

inspiring people with its new projects. Musk built his company on two things:

build a product that matters and tell a story that resonates with people

(Veerasamy). In this modern age, social media is everything. Musk promotes

heavily through YouTube which is all he needs in order to excite the public about

Tesla’s products (Veerasamy). The reason Tesla is able to stick with people is

because it’s something cool, unique, and technologically advanced product that is

only going to keep advancing.

C. Pricing Strategy

The basic Model S costs about $71,070 USD. Tesla prices the Model S knowing

that there is a $7,500 federal tax credit for purchasing Tesla automobiles due to

their lack of a negative effect on the environment. This brings the overall price of

the Model S down to $63,570. Certain states also have incentives ranging from

$9000 to $500 (Order Tesla). This pricing strategy accurately hits their target

market of younger, wealthier people. Since this market has the cash to buy the

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Model S, the the tax credits aid their ability to purchase a Tesla car as well as

creates more of an incentive to do so. It is also reasonable because the Model S

does not use gas, therefore it is more of a bargain than other luxury cars at the

same price. Most of the competitor cars in the same class as Model S range from

$115,900 (AudiR8) to $72,520(Lexus LS). The Tesla without the federal tax credit is

already the cheapest option. (Appendix 14)

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CHAPTER - 6

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 Distribution Strategy

Since Tesla has no conventional distribution tactics and prefers to market its

product positioning storefronts in “high foot traffic and high visibility retail venues

such as, malls and shopping streets in relatively open minded buying mood areas”

(Blog), its distribution strategy could be seen as selective. The storefronts, as seen

in Appendix 15, only contain a single car for the consumer to have a visual and

physical interaction with the vehicle which cuts costs. Tesla has trained specialists

in each store to educate its customers on the product and any electric car.

However, if the consumer wished to buy a Model S on site that day, the specialist

would not be able to sell it to them as the Model S is sold out several months in

advance and there is not inventory on site. Reservations must be placed and the

consumer will receive their car in several months. Tesla uses this method because

it believes, “Our technology is different, our car is different, and, as a result, our

stores are intentionally different” (Blog). Tesla also does not grant any franchisees

and manufactures, distributes, and sells its product, cutting out any middle

men. VI. Conclusions and Recommendations

Using smartly placed pop-up stores, low prices, and a differentiated product,

Tesla markets the Model S as a new eco-friendly, reasonably priced luxury vehicle

that it sells in areas only where it knows it has its desired target market of the

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upper-middle class. By distributing to its own dealerships in areas Tesla see a

potential market, Tesla eliminates having Model S cars sit on a third party

dealership lot it has to pay commission for. The lack of a commission and the

favourable tax credit aids the marketing strategy of the Model S as being the cost

leader for its completion. Another strategy that Tesla employs with the Model S is

being different from its competitors. The Model S is the only fully electric luxury

sedan made by any company. Through low prices and differentiation strategies as

well as effective product placement, Tesla has an effective marketing strategy.

Overall, Tesla Motors mission is to provide a car that is tech savvy and eco-

friendly for the upper-middle class. Tesla provides value to its target customers

through their product. Its electric car competes with many of the more luxurious

cars and offers features such as 200 watt stereo with AM, FD, and HD stations, it

also supports MP3, AAC, and MP4 players. The car also provides value for its

customers through its 17-inch touch screen with media, communication, cabin

and vehicle controls, and lastly Bluetooth technology for hands free calling and

music streaming (Tesla Motors). All of these features appeal to the upper-middle

class giving them the luxurious, technologically advanced car experience. Another

way in which Tesla provides value for its customers is through tax cuts from the

government given for driving ecofriendly cars that cut down the pollution in the

country.

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Tesla does an excellent job at providing value for its customer; however, there is

room for improvement. One major flaw in Tesla Motors is its lack of inventory.

When purchasing a Tesla vehicle it usually takes a few months for the car to be

custom made and then delivered. This results in the buyers having to wait

extended periods of times before getting their car while other dealerships have

cars ready on hand.

Another field where there is room for improvement for Tesla is its test-driving

options for potential customers. Currently, a customer must put down a deposit

of $5,000 in order to test drive a car. This is one of the results of Tesla’s lack of

inventory. Asking for such a large sum of money simply to test drive a car could

easily turn customers away and sway them to other luxury or eco-friendly cars.

Tesla should invest in having a certain amount of cars from each series reserved

to be test-driven, and it should not charge potential customers large sums of

money to test-drive its vehicles.

Lastly, to provide value to customers Tesla Motors should invest in more

promotion. Yes, its goal is to distance themselves from traditional retailing with its

push advertisement through social media, but it is harder for customers to obtain

knowledge on this company. Tesla relies on social media too much. While Tesla

posts its sales promotions on its blog, no customers can truly access them unless

they actively search for that kind of information for the products. With some

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advertisement, Tesla could connect with more potential customers, which would

be beneficial since it is a new company. This will help get its new product on the

same playing field as the other luxury car companies it competes with sooner.

VII. Appendices

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BIBLOGRAPHY

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On its Q4 2018 earnings call last night, Tesla confirmed that the Model Y
will be the first vehicle it will build at its Gigafactory 1 in Sparks, Nevada. In
parallel, it plans to build the crossover (CUV) at its new Gigafactory 3 in
Shanghai, China. The latter was shared previously and the former was long
suspected. We actually got intel recently that the Model Y would be built at
Gigafactory 1, but for some reason decided to not break the news. We do
have other exclusive info coming about Gigafactory 1, though.

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 Shared DNA
The Model Y is expected to be received warmly and will have more
demand than any of Tesla’s other vehicles, since customers across the
world continue to move away from cars to crossovers. Tesla plans to build
the Model Y off of the Model 3 platform, with the two sharing 76% of the
same parts, according to Tesla CEO Elon Musk. This shared DNA between
Model 3 and Model Y will allow Tesla to leverage even greater economies
of scale in its supply chain and demand even lower prices from its
suppliers, in addition to improving its downstream efficiencies with the
supply of parts to its service centers and approved body shops.
Parts sharing was the premise for the design of Tesla’s full-sized Model S
and Model X, but that promise did not play out as planned. Instead, Tesla
pushed to include an ever-increasing list of new features in the Model X as
it evolved into the “faberge egg” of cars, according to CEO Elon Musk.
When all was said and done, the two vehicles only ended up sharing about
30% common parts. Elon shared on the Q4 2018 earnings call that the
Model X is a work of art and that nothing like it will probably ever be made
again.

The production design of the Model Y has been completed and parts
orders are already going out to suppliers in advance of the official unveiling
of the vehicle, which could be as early as March, if vague tweets from Elon
are taken literally.

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 Cars From The Gigafactories
The Model Y will be the first of Tesla’s vehicles that will be produced at
Tesla’s Gigafactories, as Musk announced that the company plans to build
the Model Y completely at its Gigafactory 1 in Sparks, Nevada. (The Model
S, Model X, and Model 3 are produced at its factory in Fremont, California,
with some parts coming from the Gigafactory.)

In parallel, the company will ramp up production at Gigafactory 3 in

Shanghai, China, where Tesla plans to go from a muddy lot to cars rolling
out the door in less than a year. Model 3 will be the first vehicle produced
there, with Model Y following not long after in high volume in 2020, if all
goes well.

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!77
 The Tesla Fremont Factory. Image credit: Tesla

“Tesla has the first wholly owned manufacturing facility in China of any
automotive company. This is profound,” Musk said. Tesla pulled the trigger
on the location of the Shanghai Gigafactory within a few days of China
removing the requirement to have local partners for manufacturing plants in
the country. That gives Tesla full control over the factory and a leg up on its
foreign automotive competition in the Chinese market.

Tesla shared on the earnings call that, thanks to government support and
“extremely compelling interest rates,” Tesla expected to bring the new
factory online in record time, and at a significantly lower cost. “As a ballpark
figure, it’s probably about a half a billion dollars capex” to get Gigafactory 3
up and running at a 3,000 vehicle per week rate by the end of 2019.

Building batteries and cars from a single factory is not a new vision for
Tesla, which makes the prospect of building cars effectively from raw
material up through the finished product at a single factory that much more
exciting. Clearly tons of materials and parts still need to be shipped in, but
minimizing non-value add transportation and logistics expenses helps
Tesla to optimize its cost picture and, ultimately, keep the price of its
products as low as possible for as many customers as possible.
Have a read of our live blog summary of the Tesla Q4 2018 call (and letter)
or head over to Tesla’s Investor Relations site to read Tesla’s Q4 2018
earnings letter and listen to the webcast recording for more juicy details
from an exciting quarter for Tesla.

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All new vehicles would be electric by 2025, due to cost-effectiveness rather
than a green revolution, Tony Seba, a serial entrepreneur and author, told
a Nomura investment forum.

Electric vehicle (EV) performance has been improving so quickly and prices
have been falling so fast that the internal combustion engine (ICE) wouldn’t
be able to compete for much longer, Seba, the author of “Clean Disruption
of Energy and Transportation,” told the Thursday forum.

“You will soon be able to get Porsche performance for Buick prices and
when you get that, neither Porsche nor Buick are able to compete,” he said.

He said he expected the cost of an electric vehicle to fall to about $30,000

by 2020, compared with the $33,000 current median price of a new ICE car
in the U.S. By 2022, a low-end EV would be available for as little as
$22,000, he predicted.

Seba said the “marginal cost” of owning an EV was essentially zero

because maintenance costs were so low, noting that while ICE cars had
more than 2,000 moving parts, EVs had about 20, making for few
breakdowns.

That was why electric-car maker Tesla felt comfortable offering an infinite-
mile warranty on its models, he said, adding that rather than just a “green”
choice, EVs were on track to become “the rational, economic choice” very
quickly.

Seba, who teaches at Stanford University and is a board director or advisor

to several alternative energy start-ups, is not alone in expecting a quick
uptick in adoption.

But not everyone was as optimistic on the speed of the shift to EVs.

In a research report released this month, Nomura estimated that sales of

EVs globally would grow to 2.4 million units by 2020, compared with
348,000 in 2015. That compared with its forecast for 91.54 million total
vehicles to be sold globally in 2016.

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It also estimated that sales of plug-in hybrids would rise from 384,000 in
2015 to 2.4 million in 2020, while its forecast for hybrid vehicle sales was at
4.7 million by 2020, up from 2015′s 1.7 million.

Nomura forecast that EVs would make up 2.4 percent of total vehicle sales
by 2020, up from 0.4 percent in 2015.

The investment bank also noted that with automated driving options likely
to be widely adopted by 2020 in developed markets, that could give
consumers more incentive to replace their cars even sooner than usual.

Adoption of EVs, meanwhile, might not be left entirely to market forces.

Many countries have introduced incentives to buy the cars because they
offered other advantages, including the emission of far less pollution than
an internal combustion engine.

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 Appendix
Except as otherwise noted, this report covers Tesla, Inc.’s fiscal year
2020, and references to “to date,” “currently,” or similar expressions
reflect information as of December 31, 2020. Our data and
methodologies have been collected and reviewed internally using
relevant scientific and technical methodologies. Our statements about
past occurrences and potential future development are based on data,
estimates and assumptions made as of the date of publication. Certain
information and data in this report may come from third-party sources
and operations outside of our control. Tesla’s ESG Sustainability Council
actively reviews and updates our methodologies for calculating the
metrics set forth in this report. From time to time, data reported for
prior periods may change due to improvement in data collection and
measurement, new data availability, methodological adjustments or
activities related to mergers and acquisitions, and we reserve the right
to revisit our prior historical data and estimates to ensure accuracy and
make any necessary corrections to our public reporting. Tesla holds no
obligation to update any information or statements in this report.
Forward-Looking Statements Certain statements in this report,
including statements relating to future product development,
performance and capability, timelines for the building of new factories
and opening of new locations, expected cost savings from local
manufacturing and materials recycling operations, the expansion of our
Supercharger Network, future environmental sustainability efforts and
expected efficiencies, data collection and reporting of results in
subsequent Impact Reports are forward-looking statements that are
subject to risks and uncertainties. These forward-looking statements
are based on management’s current expectations. Various important
factors could cause actual results to differ materially, including the risks

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identified in our U.S. Securities and Exchange Commission (“SEC”) filings
and reports, including the risks identified under the section captioned
“Risk Factors” in our quarterly report on Form 10-Q filed with the SEC
on July 27, 2021 . Tesla disclaims any obligation to update any forward-
looking statement contained in this report .

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