Market Analysis of Tesla, Inc. Electric Car Industry

2021-07-08 08:18:29
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612 words
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Wesleyan University
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Tesla, Inc. formerly, Tesla Motors is an electric car maker in the united states headquartered in Palo Alto, California. It was founded in 2003 by Elon Musk and Martin Eberhard, and it went public in 2010, and since then it has been on the top trends regarding providing alternative passenger vehicles and powertrains. The products of the company are aimed at the customers in the high-end of the market. In this paper, we shall analyze the market of Tesla Company.

Products and Customer Groups

Tesla produces electric passenger vehicles and powertrains. In 2016, its models included Tesla Model S, Tesla Roadster, Tesla Model X, and Tesla Model 3. The companys customers are located in North America, Europe, and Asia, although the domestic market is one of the most target markets to the company. It targets entrepreneurs, and business executives who are mainly city dwellers, others are the wealthy, early adopters in the upper to middle class. The other target has been the millennials who are buyers of Model S which has remained popular in the domestic market and one of the best-selling electric cars in the United States in 2016. It produced about 26000 cars in the third quarter of 2017, while the fiscal year of 2016 produced a total of 76000.

The Key Player and Their Market Share

Tesla has an enormous market capitalization, but the company is outsold by Renault-Nissan Alliance, the pioneer of the electric vehicle field. The first quarter of 2017, saw Renault selling over 37000 vehicles, while Tesla reported selling 27000 over the same quarter. Nissans Leaf outsold Teslas Model X, and the top-selling cars in Europe are from Renault-Nissan Alliance. The top-selling EV in Europe in 2017 was Renaults new Zoe, followed by Leaf, then Mitsubishis Outlander PHEV. What places Alliance ahead of Tesla is the rich and underreported portfolio of working electrified workhorses, that are outsized to deliver goods in cities around the world.

Recent Entrants and Exits

The Company is launched its first electric car in 2013, and its sales have been rising. With the recent launch of Tesla Model 3 sedan, the car is breaking into the mass market. The company is also experiencing rising demands for Model S, one of its premium electric sedan while Model X has led deliveries, recording 25000 units. In 2008 the company launched Tesla Roadster that could travel 245 miles on one charge. The car had some problems getting stuck in the second gear, forcing the company to do away with it before introducing Model S, which has hit its market, reaching top sales.

Ownership Patterns

Tesla, Inc. was publicly traded in 2010, and today 56.72% of the company is an institutional holding, with 784 shareholders. The non-institutional shares consist of 43.28% of the company. The top five holders of the institutional holdings include FMR LLC, Baillie Gifford and Co, Vanguard Group Inc., Price Rowe Associates Inc. /MD/, and Blackrock Inc.

Health of the Industry

Since the creation of its first electric vehicle, its sales increased from US$204 million in 2011 to US$ 7billion in 2016, and until today it is making luxury vehicles, but with the launch of Model 3 sedan it would break into the mass market. The revenue from the first quarter of 2017 doubled to US$2.7 billion, but its net loss widened from US$282.3 million to $330.3 million. By 2016, the unit sales had risen to 76,000 and 47,550 were sold in the US, where it was the market share leader with 29% in the EV market. The sales in China were 11,000 and 18,450 to the rest of the world. The 73% rise in revenue to US$7 billion, included domestic sales of US$4.2 billion. This data indicates that the company is still highly dependent on its domestic market for its sales. There is the need for the company to expand its marketing strategy to target foreign market on a wider scale.

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