Tesla customer analysis
Tesla Motors is an American automobile manufacturer specializing in designing, manufacturing and selling electric cars and electric vehicle power train components. Headquartered in Palo Alto, California, it was founded in 2003 by a group of Silicon Valley entrepreneurs led by Elon Musk (of PayPal and SpaceX fame). The stated goal of the company is to drive the world’s transition to electric mobility by offering a full range of electric vehicles to the market. Currently they sell cars in the premium segment but aim to offer an entire range of increasingly affordable vehicles in the future.
They currently retail from 83 locations across the world, employ around 6000 people and turned a profit for the first time in Q1 2013. Elon Musk himself sees great potential in this market and is showing interest in expanding here in the coming months. (http://youtu. be/MBItc_QAUUM? t=43m) Why Singapore now? Although Singapore is a small market, it would prove to be an exciting opportunity for Tesla motors because: Rise in affluence of population – Singapore is the 3rd highest ranking country in GDP per capita in the world.
Green vehicles are usually more costly than their traditional counterparts and Singapore gives Tesla Motors a better audience to market its product to. Preference for upper segment luxury cars – By observing the trend of car sales in 2013 we see that there is a huge potential for Tesla motors. Some of Tesla motors’ direct competitors like Mercedes Benz and BMW took an encouraging lead in sales by holding a market share of 17% and 16% respectively. (http://www. lta. gov. sg/content/dam/ltaweb/corp/PublicationsResearch/files/FactsandFigures/M03-Car_Regn_by_make.pdf) Less startup capital needed – Being a densely populated country that measures only 710km? , Tesla Motors can afford to invest in building Supercharger Stations at several locations spread across the island. The stations would provide 30 minutes quick charge and also battery swap service, if required. (http://www. teslamotors. com/supercharger) Proposed Marketing Strategy Examine entry into the premium car segment by creating a unique value proposition and position the company as direct competition against Mercedes, BMW, Audi and Jaguar.
Market Tesla motors’ latest portfolio of cars – The Model S & Model X as pioneers in luxury and eco driving. Explore partnering options with popular petrol bunks to include “Supercharger” stations. Leverage the islands small size to educate the customer on how it can be spanned from end to end deveral times on just one charge. The Singapore Certificate Of Entitlement (COE) Tesla Motor cars would be under COE category ‘E’ as it is an electric car. The cost of this COE as of January 2014 is SGD $77,003.
Primary competition for Tesla motors includes the Luxury segment (Mercedes Benz, BMW, Audi, Range Rover, Jaguar etc). Secondary competition is the super luxury and super car segment (Bentley, Maserati, Ferrari, Porsche etc). Both these segments use the category ‘A’ COE which costs SGD $75,300. The price of the actual Tesla motors car is approximately the same as that the luxury segment cars. Therefore we conclude that the COE cost difference of SGD $1,703 would play no role in the purchase decision of the affluent luxury car buyer.