In 2012 Tesla envisions a large untapped market (high-end electric vehicles) where nobody else sees one. With the Model S they create the right value proposition to unlock the opportunity.
Tesla was founded in 2003 with the goal of commercializing electric vehicles, starting with luxury sports cars and then moving on to affordable, mass market vehicles. In 2008, Tesla began selling its Roadster. Its first breakthrough was in 2012 when it launched the Model S. Tesla’s first “affordable” car, the Model 3, was announced in 2015 and produced in 2017.Prior to Tesla, the market for electric vehicles was relatively insignificant and was served by utilitarian and unremarkable models. Tesla was the first car manufacturer to view the market for electric vehicles differently: Tesla saw a significant opportunity by focusing on performance and the high end of the market.
The Tesla business model pattern
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Envision a large, untapped market, where nobody sees one
Tesla identifies a potential market of environmentally conscious, wealthy consumers who are interested in electric vehicles, but not at the expense of comfort, performance, and design.
Create customer gains in new ways
With the Model S, Tesla taps into the aspirations of its initial customer segment. In 2013, it is called the “best car ever tested”, and becomes the best selling car in eight of America’s 25 wealthiest zip codes.
Relieve customer pains in new ways
Tesla recognizes its customers’ fears over battery range. It substantially improves the speed of charging and creates its own network of free superchargers in high traffic areas.
Lovemark brand
Tesla built up a lovemark brand in record time. It inspired significant brand loyalty because of its dedication to saving the planet, high-quality vehicles, and personal customer service. In 2014, the Tesla Model S was voted the “most loved car in America.”
Direct distribution
From the start Tesla sold its cars directly (through the Internet, gallery-like stores in urban malls, and its owner loyalty program) to educate customers on the cars’ features.
From hardware to software and data
Tesla is not just a car manufacturer, it is truly a software company. Its cars run on sophisticated software that updates wirelessly. Self-driving software which constantly learns from the data of its community of drivers is introduced in 2014. Software drives the entire user experience of owning a Tesla.
Building the backstage for disruption
To enable its vision of unleashing the electric vehicle market, Tesla bolsters its portfolio of key resources and key activities with technology partners like Toyota, Mercedes, and Panasonic. It also manages to overcome substantial manufacturing challenges for Tesla’s first “affordable” car, the Model 3.
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In 2012 Tesla envisions a large untapped market (high-end electric vehicles) where nobody else sees one. With the Model S they create the right value proposition to unlock the opportunity.
Tesla was founded in 2003 with the goal of commercializing electric vehicles, starting with luxury sports cars and then moving on to affordable, mass market vehicles. In 2008, Tesla began selling its Roadster. Its first breakthrough was in 2012 when it launched the Model S. Tesla’s first “affordable” car, the Model 3, was announced in 2015 and produced in 2017.Prior to Tesla, the market for electric vehicles was relatively insignificant and was served by utilitarian and unremarkable models. Tesla was the first car manufacturer to view the market for electric vehicles differently: Tesla saw a significant opportunity by focusing on performance and the high end of the market.
The Tesla business model pattern
Envision a large, untapped market, where nobody sees one
Tesla identifies a potential market of environmentally conscious, wealthy consumers who are interested in electric vehicles, but not at the expense of comfort, performance, and design.
Create customer gains in new ways
With the Model S, Tesla taps into the aspirations of its initial customer segment. In 2013, it is called the “best car ever tested”, and becomes the best selling car in eight of America’s 25 wealthiest zip codes.
Relieve customer pains in new ways
Tesla recognizes its customers’ fears over battery range. It substantially improves the speed of charging and creates its own network of free superchargers in high traffic areas.
Lovemark brand
Tesla built up a lovemark brand in record time. It inspired significant brand loyalty because of its dedication to saving the planet, high-quality vehicles, and personal customer service. In 2014, the Tesla Model S was voted the “most loved car in America.”
Direct distribution
From the start Tesla sold its cars directly (through the Internet, gallery-like stores in urban malls, and its owner loyalty program) to educate customers on the cars’ features.
From hardware to software and data
Tesla is not just a car manufacturer, it is truly a software company. Its cars run on sophisticated software that updates wirelessly. Self-driving software which constantly learns from the data of its community of drivers is introduced in 2014. Software drives the entire user experience of owning a Tesla.
Building the backstage for disruption
To enable its vision of unleashing the electric vehicle market, Tesla bolsters its portfolio of key resources and key activities with technology partners like Toyota, Mercedes, and Panasonic. It also manages to overcome substantial manufacturing challenges for Tesla’s first “affordable” car, the Model 3.
related reads
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In 2012 Tesla envisions a large untapped market (high-end electric vehicles) where nobody else sees one. With the Model S they create the right value proposition to unlock the opportunity.
