Tesla Masterplan

Tesla have continued to grab headlines this past year with the announcement of the Tesla Model 3 Electric Vehicle (EV) and the Tesla Energy Powerwall, both products have the potential to change the way we fuel our cars and power our homes forever.

Electric vehicles are not new and have been around for a long time (the first speeding ticket handed out in the US was to a taxi driver in an electric vehicle in 1899) so what makes Tesla different?

Product Development

Tesla was founded in Silicon Valley during 2003 by a group of engineers who had the belief that electric vehicles could be better than traditional vehicles. In the 10 years that followed Tesla has produced a limited edition sports car called “The Roadster” (2008) and a full production high end Model S Sedan (2012)

In a blog by Tesla CEO Elon Musk he outlined the Tesla Masterplan,

“Build sports car

  1. Use that money to build an affordable car
  2. Use that money to build an even more affordable car
  3. While doing above, also provide zero emission electric power generation options

Don’t tell anyone.”

More Affordable Car

At US$35,000 the Model 3 is Tesla’s most affordable car to date and one that would appeal to the mass market, nearly 400,000 people have put down US$1500 deposits for the Model 3 that won’t even ship till 2017 which, in a declining car market is exceptional.

The design of an affordable EV follows the top down philosophy of product development with the intention of providing a cost effective EV car that can be sold to the masses. Tesla have gone to great length to highlight the $US35,000 base price BEFORE any credit or incentives are subtracted, in simple terms you may be able to get your hands on the Model 3 for less than US$35k… let that sink in.

The battery system used for Tesla’s EV’s have also opened up a new product line, the Powerwall & Powerpack. Both products are used to store electricity for use during peak demand times or in the evening. When both products were released reservations in the first week topped US$800 million

Brand Association

How can an automaker and energy innovation company generate that much interest in it’s products when there are competitors with similar products out there. Quite simply “Brand”

People have come to associate with the Tesla brand in a number of ways, sure you get a car to drive around in or a powerwall to supply electricity to your home or business but there are other associations that to some or many are as equally important. Everyone loves to save money and in the right circumstances the Model 3 and the Powerwall can achieve this but it could also appeals to our sense of being environmentally conscious by reducing our reliance on fossil fuels to power our cars and homes, helping to save the environment by reducing CO2 emissions or even as a status symbol that we own a “Tesla”

The release events for the Model 3 and the Powerwall were reminiscent of an Apple keynote speech, big stage, lots of glamour and a star man presenting. Elon Musk & Tesla have captured the attention of the masses.

Disruptive Innovation

Is the Model 3 and the Powerwall a disrupter to current industry and practice?

While the technology has been around for a while and other companies producing EV’s and storage systems for electricity; Tesla have brought the idea of owning one of these products to the forefront. Making the Model 3 affordable has the potential to be a game changer in the automotive industry and has encouraged the main car makers to invest in the technology.

The powerwall is a little bit different, economically the pay back time exceeds the warranty of the units as detailed by the report conducted by CHOICE for ABC. The decision to own a Powerwall will not be made entirely for financial reason but that hasn’t stopped the orders coming in. Tesla’s Gigafactory is currently under construction and one would expect the the cost to produce the Lithium-ion batteries will come down making the Powerwall’s pay back time more attractive. I bet the utility companies are taking notice..

 

 

Pictures courtesy of Tesla motors and Tesla energy

Iacobucci, D 2013, Marketing Management (MM4), Student Edition, South-Western, Cengage Learning, Mason, Ohio (Chapter 7 & 8)

robtempleton                                             ID 215203221                                robr@deakin.edu.au

 

 

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