TESLA MOTORS

Rivalry intensifies as competitors undertake

actions to boost market standing at expanse of
competitors
As large automakers increase their focus on electric
vehicles (EVs), competition in this space, considered to
be Tesla Motors home ground, is intensifying.
Ford Motors announced earlier in December that it will
invest an additional $4.5 billion in electric vehicles by
2020.
General Motors battery powered Chevrolet Bolt, which
will have a range of 200 miles between charges, is
expected to be launched in 2016.
Tesla has a competitive edge in this market given its
supercharger network and direct selling model

 Ford stated that it plans to commence production of the

new Ford Electric next year, which will deliver 80 percent
charge in 30 minutes (similar to Teslas Model S)
competing with Tesla on the charging network might be
tough for other auto makers, given its first movers
advantage.
Tesla plans to introduce its third major vehicle currently
referred to as Gen III, in 2016 which will target the mass
market electric cars.
General Motors battery Chevrolet Bolt appears to be a
direct competitor to this model and is expected to be
launched around the same time

 as the focus increases on environment

sustainability. Several players such as
BMW, Daimler, Volvo are expected to
launch new models by 2017
As an increasing number of countries
impose strict emission standards, the focus
on electric vehicles by traditional car
makers will increase, leading to many more
entrants in this market.

Whether industry members are racing to offer better

performance features or higher quality or improved
customer service or a wider product selection
It is one of the critical issue to bring competitiveness in cost,
quality and product offerings.
Companies cannot survive in todays market if they do not
bring competitiveness in their product.
In case of automobile industry, they have been continuously
bringing improvement in productivity, quality like,
The U.S.-owned (Big 3) plants in North America (both United
States and Canada) improved their productivity by 17
percent from 24.1 to 20 hours per vehicle. In comparison,
Japanese-owned plants in Japan showed only a 5.8 percent
improvement over this period, from 15.6 to 14.7 hours per
vehicle

Much of the quality gap between Japanese companies and

their American and European competitors has been closed.
The greatest improvement in terms of quality was shown
by European plants (33 percent) and by Big 3 plants in
North America (26.7 percent).
So this shows in order to survive all companies in an
industry have to continuously work on bringing new product
or improving the existing one.

How actively industry members are pursuing efforts to

build stronger dealer networks or establish position
in foreign markets or otherwise expand their
distribution capabilities and market presence

Automotive marketing, distribution, and retailing

represent approximately 20 to 30 percent of the
value of a new car, depending on company,
dealer type, and the level of sales incentives
applied to the product line.
Automotive markets generate more than $1.5
trillion in revenue of which approximately $500
billion is generated in the North American region.

 Almost one-third of this value is directly created

by retailing of new and used vehicles, service
and repair, and related postmanufacturing
activity
Retailers, customer researchers, forecasters,
distributors, financial sources, and others define
what the manufacturing sector should make and
how and when it should make it, because they
have direct contact with the wishes of the
ultimate customer.

How hard companies are striving to gain a

market edge over rivals by developing
valuable expertise and capabilities

The companies in an automobile industry

are trying to get a competitive advantage
over competitors by adopting new
expertise and capabilities. Like,
o They have developed lean production
methods, lean distribution systems(means
reducing the inventory).
o Increasing the use of electronic system

Rivalry increase as new innovated

products are introduced
Product innovation is vital
The launch of Gen III, in 2016 by Tesla
that intends to target the mass market
electric cars has influenced General
Motors to launch its battery Chevrolet Bolt
to compete.

Rivalry is weak when number of

players is low
Perfect example is Pakistan or any
developing country where number of rivals
is low.
USA has large number of players so more
intense competition.

Rivalry is slow in Electric car

Industry
In a slow growth market, companies can only grow by
capturing market share from each other, which leads to
increased competition.
In electric vehicle industry tesla motors, for now, enjoys
the privilege of relatively high market share due to its
gigafactory.
electric vehicle Market is stable its not growing in nature
as it should be due to lack of purchasing power as
Electric vehicles are expensive than ordinary vehicles.

Rivalry intensifies as product becomes

standardized due to increased number of
players
Ford and GM motors are already involved
in manufacturing and selling of electric
vehicles. Still people prefer vehicles that
run on fuel
All major automakers are manufacturing
electric vehicles, product has become
standardised.

Rivalry intensifies as competitors use price

cuts as competitive advantage
in electric vehicles, automakers are trying
to grow their market share on the basis of
price.
GM motors has left Tesla motors behind in
terms of price of electric vehicles. They
are selling at $35000 while Teslas least
expensive car is $75000.

Rivalry intensifies when one player

applies a strong successful strategy
The essence of strategy formulation is
coping with competition.
Entrepreneurs have dissected the costvalue equation and come up with new
retail concepts. Their stories have been
persuasive enough to attract hundreds of
millions of dollars in public equity
investment.

Rivalry intensifies due to

mergers and acquisitions
The intensity of rivalry among competitors in an
industry refers to the extent to which firms within
an industry put pressure on one another and
limit each others profit potential.
Nissan Motors acquisition of a 50 percent stake
in Dongfeng Motors for USD1.032 billion was the
biggest deal in 2003.

 Mazda's financial difficulties during the 1960s led to the

investment by Ford Motor Company in Mazda. Starting
in 1979 with a 7%, Ford began a partnership with Mazda
resulting in various joint projects. During the 1980s, Ford
increased the financial stake to 20%. The 1997 Asian
financial crisis led to further financial difficulties at Mazda
causing Ford to increase its stake to a 33.4 % with a
controlling interest in May 1996.

 In 1999, Ford Motor Company bought Volvo car-making

division to compete with GM and other big players
In 2000, Having invested considerably in the Rover
Group and struggled unsuccessfully to make it pay,
BMW withdraws and sells Rover and MG to The
Phoenix Group for a token 1.00. BMW retains the rights
to brands Mini, Triumph, Riley and Land Rover, the last
of which it then sells to Ford.
As Chrysler was losing its market share to Toyota and
GM, so Chrysler and Fiat entered into an alliance to build
the fuel efficient cars to compete with them.

 LATEST
General Motors announced that it will
acquire Cruise Automation, a San
Francisco-based developer of
autonomous vehicle technology
Tesla Motors might be acquired by Apple
in near future