Tesla’s Current Strategies in the Electric Vehicle Market
Introduction
There are over 1.3 billion cars on the road, of which 60 million are electric cars. The portion of electric vehicles (EV) to internal combustion vehicles is still comparatively small (Patton). However, with the introduction of new EV models, individuals’ interest in buying electric cars has increased. The number of registered EVs in Feb. 2022 was 541,780, which is double what it was at the same time last year (Kane). With more options on the market, competition among EV manufacturers is increasing, as is the need to implement innovative strategies to remain competitive.
In Jan. and Feb. 2022, the best-selling EV brands were BYD, with 181,173 units, followed by Tesla, with 130.131 units, SAIC-GM-Wuling, with 62,695 units, and Volkswagen, with 45,406 units. However, Tesla was back on top in March, and its sales exceeded 310,000 units in the first quarter of 2022, while the sales of BYD were below 300,000 (Kane). What strategies did Tesla implement to overcome its rivals in the electric market segment?
The current essay will discuss three strategies by which Tesla has cornered the market in the EV industry: technological strategies, design strategies, and customer service. These strategies are all aimed at achieving the ultimate customer experience.
Technological Strategies
In terms of technology, Tesla is a leader in the EV market. Arguably the most important feature of EV technology is, of course, the battery. Tesla’s ternary power lithium batteries use a nickel-cobalt-aluminum battery (NCA), while most other EVs use a ternary battery consisting of nickel-cobalt-manganese (NCM). Compared to NCM, NCA has a higher energy density. From the consumer perspective, an increased energy density battery means longer battery life and a reduction in cost (HKT).
Design Strategies
Another strategy through which Tesla beats its competitors is the design of the vehicle. Among other things, Tesla attempts to capture customers’ attention by increasing seating capacity. Tesla CEO Elon Musk has stated that his company’s vehicles could not compete for the hearts of customers against the likes of Aston Martin and Porsche simply by embracing the latest trends (i.e., controlling entertainment and other functions, such as map navigation, radio broadcasting, by touch). While not ignoring such trends, Instead, he argued that Tesla should focus on meeting customers’ functional requirements. Consistent with this, Musk insisted that the Model X and Y have a 7-person carrying capacity. At first, the Tesla engineering team disagreed with the idea; however, Musk insisted, saying that customers would concentrate on body capacity when choosing the class of vehicle. Success among consumers would prove his theory to be true (Kane).
Customer Service
On top of technological and design strategies, Tesla’s post-customer service is very attractive to customers. One of the most important elements of its post-customer service strategy is its network of charging stations. As of the end of 2018, Tesla had set up 1,422 supercharging stations and 12,011 charging piles (a charging device with a charging gun and a human-machine interface) around the world. The company has agreements with numerous public amenities, including restaurants and hotels, to make itself a destination charging network. This gives Tesla owners tremendous flexibility when traveling.
Conclusion
To sum up, three of Tesla’s strategies to overcome its competitors have proven particularly successful. They are technological, design, and post-customer service strategies. One of the technological strategies Tesla focuses on is the improvement in battery life and decrease in cost. Concerning design, Tesla has considered multi-child families and designed vehicles accordingly. And as for post-customer service, Tesla has dramatically expanded its offering of supercharging sites to give its customers greater flexibility on the road.
Works Cited
HKT. Inspiration from Tesla’s Business Model: What Exactly Are the People Buying Tesla?, 29 Apr. 2022, https://inf.news/en/auto/6496f8bc06ee271bd26659b0f30b1f5b.html.
Kane, Mark. “Global Plug-in Electric Car Sales Doubled in February 2022.” InsideEVs, InsideEVs, 6 Apr. 2022, https://insideevs.com/news/578241/global-plugin-car-sales-february2022/.
Patton, Mike. “Competition Heats up for Tesla in EV Market.” Forbes, Forbes Magazine, 14 Apr. 2022, https://www.forbes.com/sites/mikepatton/2022/03/30/competition-heats-up-for-tesla-in-ev-market/.
Will Tesla Remain a Leader in the EV Industry?
In conclusion, if Tesla continues to implement the above-mentioned strategies and keeps innovating in EV technology, design, and post-customer service, it is likely that the company will remain a leader in the EV industry. Its focus on battery life, vehicle design for multi-child families, and charging services for its customers has enabled it to corner the market and gain a solid customer base.
Additionally, since EVs are gaining more attention from customers day by day due to their environmental benefits, Tesla’s presence in this sector will only become more prominent. Thus, despite fierce competition from other EV brands such as Nissan, BMW, and Honda in the future, Tesla is expected to keep dominating the electric car segment.
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