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Summer 2012 NEW YORK UNIVERSITY STRATEGIC MARKETING PLAN
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Page 1: Marketing Plan

Summer 2012

NEW YORK UNIVERSITY STRATEGIC MARKETING PLAN

Page 2: Marketing Plan

2Strategic Marketing

Author: Partha Mitra

Strategic Marketing PlanModel S Premium Electric Car, Tesla Motors IncAugust 20, 2012. New York University

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3Strategic Marketing

Revision History

Date Version Description Author

07/07/2012 1.0 Initial Draft – Purpose, company mission, companyoverview, industry analysis, Appendix

Partha Mitra

14/07/2012 1.1 Added Competitor Analysis, SWOT Analysis,References

Partha Mitra

22/07/2012 1.2 Added Segmentation, Appendix, References Partha Mitra

04/08/2012 1.3 Added Positioning, Product, Price, References Partha Mitra

11/08/2012 1.4 Added Place, Promotion, References Partha Mitra

15/08/2012 1.5 Added Marketing Matrices Partha Mitra

17/08/2012 1.6 Modified each section according to Prof. Gould’scomment

Partha Mitra

19/08/2012 1.7 Added References, images, Cover Page,Formatted Table of content, other cosmeticchanges

Partha Mitra

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Table of Contents1. Purpose of the Document...................................................................................................................... 8

2. Company Mission.................................................................................................................................. 8

3. Company Vision .................................................................................................................................... 8

4. Industry Analysis ................................................................................................................................... 84.1 Characteristics of Automotive Industry...................................................................................... 8

4.1.1 Stages of production...................................................................................................... 94.1.2 Global production chains ............................................................................................. 104.1.3 Ownership pattern ....................................................................................................... 10

4.2 Automotive Industry at a Glance ............................................................................................. 114.2.1 Market Size.................................................................................................................. 114.2.2 Customers and Target Market..................................................................................... 11

4.3 Electric Vehicle Industry Forecast ........................................................................................... 144.3.1 Battery Pack Costs Projections ................................................................................... 164.3.2 Charging Infrastructure................................................................................................ 174.3.3 Cost of Ownership ....................................................................................................... 17

4.4 Challenges facing the industry ................................................................................................ 174.4.1 Component complexity ................................................................................................ 174.4.2 Generational research ................................................................................................. 184.4.3 Powertrain technology ................................................................................................. 18

5. Competitor Analysis ............................................................................................................................ 185.1 Tesla Motor’s competitive Advantages.................................................................................... 185.2 Direct Competitor Analysis ...................................................................................................... 18

5.2.1 General Motors............................................................................................................ 195.2.2 Toyota Motors.............................................................................................................. 205.2.3 BMW ............................................................................................................................ 21

5.3 Critical Success Factor Matrix ................................................................................................. 22

6. Company and Management Background............................................................................................ 236.1 History...................................................................................................................................... 236.2 Strategic Partnership ............................................................................................................... 236.3 Management............................................................................................................................ 24

7. SWOT Analysis ................................................................................................................................... 247.1 SWOT Analysis of Tesla Model S ........................................................................................... 247.2 SWOT Analysis of Tesla Model S Manufacturing Model ........................................................ 27

8. Market Segmentation .......................................................................................................................... 288.1 Demographics, Psychographics, Technographics Based Research ...................................... 298.2 EV Measurement Scales ......................................................................................................... 30

8.2.1 Innovativeness............................................................................................................. 308.2.2 Knowledge................................................................................................................... 318.2.3 Environmental Concern ............................................................................................... 328.2.4 Relative Advantage ..................................................................................................... 32

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8.2.5 Compatibility ................................................................................................................ 328.2.6 Complexity and Perceived risk .................................................................................... 328.2.7 Attitude towards Electric Vehicle ................................................................................. 32

8.3 EV Segmentation Research Results ....................................................................................... 33

9. Positioning........................................................................................................................................... 349.1 Positioning Strategy................................................................................................................. 34

10. Marketing Mix .......................................................................................................................... 3510.1 Product Elements .................................................................................................................... 35

10.1.1 Tangible Product Elements ....................................................................................... 3510.1.1.1 Dimensions..................................................................................................................... 3510.1.1.2 Body ............................................................................................................................... 3510.1.1.3 Additional Dimensions....................................................................................................3610.1.1.4 Powertrain ...................................................................................................................... 3710.1.1.5 Suspension, Steering, and Brakes................................................................................. 3710.1.1.6 Charging......................................................................................................................... 3710.1.1.7 Interior ............................................................................................................................ 3710.1.1.8 Instrumentation .............................................................................................................. 3810.1.1.9 Warranty......................................................................................................................... 3810.1.1.10 Convenience ................................................................................................................. 3810.1.1.11 Safety ............................................................................................................................ 39

10.1.2 Intangible Product Elements ..................................................................................... 4010.1.2.1 EV Charger Installation ..................................................................................................4010.1.2.2 Instruction....................................................................................................................... 4110.1.2.3 Product Line Membership .............................................................................................. 42

10.1.3 Brand ......................................................................................................................... 4210.1.4 Package..................................................................................................................... 4410.1.5 Warranty .................................................................................................................... 44

10.2 Price Elements......................................................................................................................... 4510.2.1 Pricing Strategies ...................................................................................................... 45

10.2.1.1 Introductory Price of Model S......................................................................................... 4510.2.1.2 Federal Tax Credit and allowances ............................................................................... 4510.2.1.3 Geographic Pricing......................................................................................................... 45

10.2.2 Pricing Objectives...................................................................................................... 4610.2.2.1 Sales oriented ................................................................................................................ 4610.2.2.2 Profit oriented................................................................................................................. 4610.2.2.3 Status Quo oriented ....................................................................................................... 4610.2.2.4 Non-Price oriented ......................................................................................................... 46

10.2.3 Pricing Policies .......................................................................................................... 4610.2.3.1 One-Price ....................................................................................................................... 4610.2.3.2 Flexible Price.................................................................................................................. 4710.2.3.3 Skimming Price .............................................................................................................. 4710.2.3.4 Penetration Price............................................................................................................ 4710.2.3.5 Reservation and refundable Policy ................................................................................ 48

10.3 Place Elements........................................................................................................................ 4810.3.1 Direct Channel System.............................................................................................. 4810.3.2 Channel System management .................................................................................. 4910.3.3 Expectations of middlemen ....................................................................................... 49

10.4 Promotion Elements ................................................................................................................ 4910.4.1 Define challenge type ................................................................................................ 49

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10.4.1.1 Regulatory limitation on internet selling ......................................................................... 4910.4.1.2 Branding of Tesla Motors ............................................................................................... 4910.4.1.3 Acquisition ...................................................................................................................... 50

10.4.2 Objectives .................................................................................................................. 5010.4.3 Promotion Elements .................................................................................................. 50

10.4.3.1 Video Touting ................................................................................................................. 5010.4.3.2 Mass Selling ................................................................................................................... 5110.4.3.3 Sales Promotion............................................................................................................. 51

10.4.4 Strategic direction...................................................................................................... 5110.4.4.1 Push strategy ................................................................................................................. 5110.4.4.2 Pull strategy ................................................................................................................... 51

10.4.5 Communication Tools................................................................................................ 5210.4.6 Media Tools ............................................................................................................... 52

10.4.6.1 Tesla Motors Social Media............................................................................................. 52

11. Marketing Matrices .................................................................................................................. 5211.1 Profit and Loss Statement ....................................................................................................... 5211.2 Breakeven Analysis of Model S............................................................................................... 5311.3 Return of Investment Analysis................................................................................................. 5411.4 RFM Analysis of Model S ........................................................................................................ 5511.5 Lifetime Value Analysis ........................................................................................................... 5611.6 Key Code Analysis .................................................................................................................. 56

12. Appendix.................................................................................................................................. 5712.1 Market Penetration Forecasts ................................................................................................. 5712.2 The EV and PHEV Market....................................................................................................... 5712.3 Fuel/ Energy Costs per Mile of Luxury Sedans vs. Tesla‘s Model S....................................... 5812.4 Range, Battery Pack Costs, and Price/Mile For EVs .............................................................. 5812.5 Tesla Strategic Partnership ..................................................................................................... 5912.6 The attitude towards electric vehicles and its antecedents ..................................................... 5912.7 Buying intention, attitude, and attitudinal antecedents regarding a state-of-art electricvehicle 6112.8 Tesla Store Locations.............................................................................................................. 6112.9 Tesla Executive Team ............................................................................................................. 6212.10 Tesla Model S Product Features........................................................................................... 6512.11 Tesla Enthusiasts .................................................................................................................. 7112.12 Tesla Motors Social Media Brand Community ...................................................................... 73

13. Reference ................................................................................................................................ 74

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Approver / Author / Distribution ListName Role Approvals

Prof. Myron Gould Professor, Strategic MarketingDept. Marketing and Public Relations.New York University, NYC, USA. Yes

Partha Mitra Author – Strategic Marketing Plan: Model SPremium Electric Car, Tesla Motors Inc.Master of Science, Management & SystemsNew York University, NYC, USA.

N/A

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1. Purpose of the Document

The purpose of this document is to develop a strategic marketing plan for Tesla Motor’s premium

electric car – Model S. The Model S is a four-door premium sedan electric car with a range of up

to 300 miles on a single charge. Designed from the ground up as a complete electric car, the

Model S combines superior vehicle engineering with Tesla's advanced electric powertrain

technology.

2. Company Mission

Tesla Motors designs and sells high performance, super efficient electric cars. Tesla Motors cars

join style, acceleration, and handling with advanced technologies that make them the quickest

and the most energy-efficient cars on the planet. (Tesla Motors, Mission)

3. Company Vision

At the core of Tesla Motors is the belief that an electric car need not be a driving sacrifice. Tesla

Motors has brought the best of the automotive and technology worlds together to permanently

bury the image of an electric car as a step backwards in performance, efficiency, or design. Tesla

Motor’s key technology is the 100% electric powertrain, which propels us in the present and

simultaneously establishes a foundation for our future models. They set out to forever alter

perceptions of electric vehicles and to make electric cars a viable alternative. Tesla Motor has

produced a car that is at once beautiful and exciting to drive, along with being the most efficient

production automobile on the planet. (Tesla Motors, Vision).

4. Industry Analysis

4.1 Characteristics of Automotive Industry

The automotive industry's complex product development and manufacturing process makes it

one of the most knowledge-intensive industries. There are three distinguishing characteristics of

the automobile sector.

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4.1.1 Stages of production

Production in the automobile sector is characterized by a high degree of segmentation between

different stages in production, often involving different ownership and

Geographical location. There are six different types of production activity within the automobile

sector: assemblers; system suppliers; first, second and third tier suppliers; and aftermarket

product suppliers

Assemblers: Increasing scale required to spread costs of vehicle design and branding.

Innovation and design capabilities remain critical as first movers in new market sections can

gain important rents while other companies catch up. Some companies, such as Ford, appear

to believe that core competences lie more in branding and finance, and they therefore

outsource parts of manufacturing. Others, such as Toyota, maintain an emphasis on

manufacturing excellence and competence.

Global mega-suppliers: These firms supply major systems to the assemblers. They are

sometimes referred to as "Tier 0.5" suppliers, because they are closer to the assemblers than

the first-tier suppliers. These companies need to have global coverage in order to

follow their customers to various locations around the world. They need design and

innovation capabilities in order to provide “black-box” solutions for the requirements of their

customers. Black-box solutions are solutions created by the suppliers using their own

technology to meet the performance and interface requirements set by assemblers.

First-tier suppliers: These are firms which supply direct to the assemblers. Some of these

suppliers have evolved into global mega-suppliers. First-tier suppliers require design and

innovation capabilities, but their global reach may be more limited.

Second-tier suppliers: These firms will often work on designs provided by assemblers or

global mega-suppliers. They require process-engineering skills in order to meet cost and

flexibility requirements. In addition, the ability to meet quality requirements and obtain

quality certification (ISO9000 and increasingly QS9000) is essential for remaining in the

market. These firms may supply just one market, but there is some evidence of increasing

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internationalization.

Third-tier suppliers: These firms supply basic products. In most cases, only rudimentary

engineering skills are required. A study by Leite (1997) of skills and training at different parts

of the automobile value chain in Brazil showed that in the third-tier of the component chain,

skill levels and investments in training were limited. At this point in the chain, firms compete

predominantly on price.

4.1.2 Global production chains

A distinguishing feature of the automobile sector is the high degree of global integration in

production activities. The value added chain is unbundled at the global level, with different

stages in the production chain located in different countries (Dicken, 2006). With the lowering

of trade barriers and advances in globalization, production location decisions are increasingly

determined by the international competitiveness of production in a particular location, rather

than as was the case historically, by the size and growth potential of the domestic market. As

a result of this vertical disintegration of production across borders, international competitiveness

is determined at the level of different tasks within the automobile sector, rather than at the level of

the industry (Baldwin, 2006; Grossman and Rossi-Hansberg, 2006).

4.1.3 Ownership pattern

The globalization of automobile production has occurred as part of the strategic decision

making processes of the small number of multinationals that dominate the industry. At the

beginning of the decade, the largest 20 firms produced more than 95 per cent of the world’s

vehicles. At present, some 529 plants located in 45 countries are owned by 27 automakers

(Sturgeon and Florida, 2000). As for supplier plant location, 2211 plants located in 60

countries are owned by 150 automobile suppliers. With respect to engine production, 168

plants are located in 24 countries and owned by 16 companies.

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4.2 Automotive Industry at a Glance

4.2.1 Market Size

The automotive industry is involved in the process of designing, manufacturing, and selling motor

vehicles. However, it is not just about selling cars to consumers. The services required to

maintain and distribute cars after the car’s initial sale are part of the automotive aftermarket, a

257 billion dollar market. These services include the car accessories and repairs vital for the

automobile ecosystem to function

4.2.2 Customers and Target Market

The size and importance of the automotive industry have created many opportunities for people

to get involved. According to the Franchise Business Economic Outlook 2011, automotive

franchise establishments are expected to increase 3.9% from the previous year. General

automotive industry trends and an improving economy are revealing opportunities for anyone with

a passion in the auto industry to get involved.

In some parts of the automotive aftermarket industry, there is a significant advantage through

franchising versus starting a shop on your own. In the oil change and lubrication market, the top

few companies reap in a significant amount of the entire industry’s profits. There are also other

opportunities that exist where people can benefit from.

Auto repair will continue to play a big role in the automotive industry. In addition to the routine car

and repairs every car owner must go through, there is going to be higher demand for specialized

parts and repairs required of hybrid and electric cars. Currently, there is a low supply of shops

capable of fixing these hybrid cars despite its increasing demand.

The auto accessories market is a $32 billion dollar market with data showing 92% percent of

consumers are willing to buy auto accessories. With consumers holding their cars longer and

disposable income increasing, auto accessories are beginning to look like a prudent investment

for car owners.

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The car rental market, which puts 1.6 million cars on the road, is currently seeing a bounce back

from the damage the financial crisis created. Companies such as Hertz and Enterprise had to

drastically cut costs and keep older vehicles in order to deal with the decreased demand in rental

cars. As the economy improves, these companies are hiring more and switching their old cars for

newer, fewer mileage cars.

The U.S. auto industry sold 1.28 million units in the month of June 2012. This was an increase

of 22.2% from June 2011. The Seasonally Adjusted Annual Rate (SAAR) for the month was 14.1

million. Through six months, industry sales have climbed 14.9% over last year’s first half.

US auto industry is full of competitive auto manufacturing companies, market share of couple of

popular car companies are provided in below pie-chart. BMW Group, Chrysler/Dodge/Jeep, Ford

Motors, General Motors, Honda/Acura, Hyundai/Kia, Mazda, Nissan, Suberu etc are the market

compititors in US Auto market.

Source: www.GoodCarBadCar.net

In the past 10 years, growth in the emerging markets has accounted for most of the increase in

global vehicle sales. Sales in the developed markets of U.S., Europe and Japan declined as

shown in the chart below. However this does not mean emerging market sales will drive

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automakers’ earnings higher in the coming years. Countries such as China give preferential

treatment to domestic auto companies, thus adversely affecting western automakers trying to

take advantage of the booming auto market there. In India, domestic automaker Tata (TTM)

makes the $2,000 Nano, beating the competition on price. Ford (F) lags behind other foreign car

companies in capturing a larger share of the Indian market.

Source: JD Power and Bernstein

High oil prices in the mid 1990s caused many consumers to shift away from high fuel dependent

vehicles like SUVs and Hummer’s that the US automakers were producing to lighter and more

compact cars. Sales dropped dramatically as more and more people preferred the smaller and

more fuel efficient Japanese cars to the more high powered American ones. The financial crisis in

2008 made matters worse as car sales further plummeted and the Big Three needed billions of

dollars in government bailout funds.

As of 2010, the automotive market contributed to approximately 4% of the United States’ GDP

and employed millions of workers. Sales have risen 11% since last year and is expected to

maintain stable growth for the next few years.

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These recent events have changed the landscape of the automotive market, but they have also

created large amounts of opportunities for aspiring business owners to capitalize on the recent

transformation of the automotive industry.

4.3 Electric Vehicle Industry Forecast

As fuel prices remain high and there is greater concern for the environment, more energy efficient

cars are increasing in demand. Moreover, as part of their bailout specifications, the Big Three

automakers are required to quickly release more energy efficient vehicles to the market. This

increasing popularity for hybrid and electric cars are going to affect the industry in big ways as it

will create a new market for businesses to cater to these new forms of vehicles. Below graph

presents Tesla Electric Car - Model S demand in consumer marketplace.

Global automobile sales forecasts project divergent market penetration rates of approximately 0.6

– 0.9% for plug-in hybrid electric vehicles (PHEVs) by 2015, 9% by 2020, and 22% by 2030 for

Electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEV). Market penetration will

depend on battery pack costs, charging infrastructure, competing technologies, oil prices,

manufacturer investments in EV and PHEVs, and consumer skepticism of EVs and PHEVs.

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Market penetration forecast is provided in detail in Appendix 8.1.

Electric Vehicle sales forecast by Type Based on US Sales for 2015.

Source: JD Power and Bernstein

Electric Vehicle Sales Forecast by Volume Range – 2015

EV Sales forecast in US by Type 2015 is provided in the below chat -

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To facilitate growth, the U.S. government has invested $5 billion. through the American Recovery

and Reinvestment Act and the DOE‘s Advanced Technology Vehicle Manufacturing (ATVM) Loan

Program. The DOE aims to increase the public accelerated charging stations from 500 to 20,500

in 2012 and reduce battery pack costs by 70% by December 2015.

Two predominant inhibitors of EV/PHEV market penetration are battery pack costs and range

anxiety. Recent reported battery pack costs are as much as 30% lower than 2009/early-2010

projections, potentially reducing the costs of EV/PHEVs. Reduced battery pack costs may enable

EV/PHEV manufacturers to produce vehicles with increased all-electric range, increasing

EV/PHEV market penetration by making EV/PHEV all-electric ranges more competitive with

ranges for internal combustion engine (ICE) vehicles. The EV and PHEV Market in USA is

provided in Appendix 12.2.

The increased capital invested in EV/PHEV technology and infrastructure has made electricity a

more viable alternative fuel for vehicles in the near-term. However, even with the projection that

battery pack costs will decrease rapidly and thereby enable manufacturers to develop EV/PHEVs

with greater all-electric ranges.

4.3.1 Battery Pack Costs Projections

Electric battery manufacturers rarely release exact battery pack costs, but most estimates range

from $500 - $1200/kWh depending on chemistry and cell-form factor.1 However battery pack

costs have decreased faster than expected. In November 2009, Deutsche Bank analysts

projected average battery pack costs reducing from $675/kWh to $500/kWh by 2015 and

$325/kWh by 2020; but in March 2010 it cited industry reports of battery pack bids in the mid-

$400/kWh for 2011/2012. Further evidence is Nissan reporting the battery pack in its economy

EV Leaf costs only $375/kWh. In addition, Tesla CEO Elon Musk stated that the Model S battery

pack will cost less than the Leaf’s pack3, a statement corroborated by calculations of battery pack

costs given information in Tesla’s IPO. In 2008, the United States Advanced Battery Consortium,

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an umbrella organization of Chrysler LLC, Ford Motor Company, and General Motors, projected a

reduction in price to $500/kWh by 2012, $300/kWh by 2014, $250/kWh by 2020 and $100/kWh in

an undefined “long-term”. The DOE projects industry-wide battery pack costs to reduce

approximately 70% (likely from an average of $700/kWh or $33,000/pack) by December 2015.

Range, Battery Pack Costs, and Price/Mile For EVs 12.4.

4.3.2 Charging Infrastructure

In addition, the DOE is funding the development of the infrastructure for charging

stations or electric vehicle supply equipment (EVSEs), with the goal of increasing the number of

level 2 (400V) or level 3 (500V) EVSEs, which reduce charge times from approximately from 8 –

16 hours to 30 minutes to 4 hours, from approximately 550 to 20,550 by 2012.7For example,

Telsa’s Quick Charge system is a level 3 charging system that can be installed at home. It can

fully charge a battery in less than 45 minutes. The federal government offers subsidies for

charging stations, covering half the cost of the home charging system.

4.3.3 Cost of Ownership

If battery pack costs reduce as the DOE projects, consumers will have further incentive to

own EVs and PHEVs since costs are $0.02 - $0.04/mile to operate whereas a 25-MPH gasoline

vehicle costs $0.12 - $0.15/mile to operate. In addition, maintenance costs will likely be lower for

EVs and PHEVs. Fuel & Energy cost per mile of Model S is provided in Appendix 12.3.

4.4 Challenges facing the industry

The automotive industry is changing at a rapid pace, particularly in terms of in-car technology and

the impact of next-generation batteries, “green” technologies and component complexity.

Couple of the common issues that automotive industry is currently facing are discussed below.

4.4.1 Component complexity

The modern-day automobile is a highly complex machine with thousands of components all

working in synchronism. The number of feature combinations can be in the thousands. But OEMs

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and suppliers need to develop a process that incorporates smart manufacturing and design

decisions while not overcomplicating consumers’ buying options.

4.4.2 Generational research

Consumer needs change as they age and the automobile is one of the most personal buying

decisions they will make. Historically many OEMs have manufactured to a general consumer

audience regardless of age, but that is changing.

4.4.3 Powertrain technology

Governments around the country are placing requirements on original equipment manufacturers

(OEMs) to adhere to strict environmental standards while asking them to produce cars that are

more affordable to drive. Consumers want more fuel efficient vehicles for an affordable price. We

work with clients to determine where the supply of consumer technology meets consumer

demand.

5. Competitor Analysis

5.1 Tesla Motor’s competitive Advantages

A central competitive advantage is the low cost of Tesla’s battery pack, which should allow it to

sell the Model S (2012 launch) at a reasonable price but with a near-normal (up to) 300 mile

range, a combination other EVs have yet to deliver. Tesla Model S battery pack costs will be

at/below ~$300/kWh, well below what we hear from other OEMs/battery makers ($500-600/kWh

for 2011-2012 timeframe, and $375-500/kWh mid-decade target). A key source of Tesla’s cost

advantage is its ability to apply commoditized small cylindrical lithium cells (used in consumer

electronics) to a car via proprietary thermal/power management.

5.2 Direct Competitor Analysis

GM, Toyota Motors, BMW are couple of best known competitors of Tesla Motors. Direct

competitor analysis is provided in below table.

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GM = General Motors Company, Pvt1 = Pininfarina S.p.A., TM = Toyota Motor Corporation,

Industry = Auto Manufacturers – Major, 1 = As of 2011

Source: Yahoo Finance.

5.2.1 General Motors

GM represents a significant future threat to Tesla, if, as planned, Tesla decides to

enter the lower end of the market near the $30,000 price point.

The current development of the Volt, although it is not a true electric car,

indicates that GM remains interested in the electric/hybrid car market, and will

continue to pursue the market in the foreseeable future

A virtual waiting list surpassed 20,000 as of May 4, 2008, indicating that there

exists a significant market for the Volt.

Designed for approximately 40 miles of battery powered driving before the 1.0L

turbocharged gas engine automatically begins to recharge the battery, thus

extending the range of the Volt to up to 640 miles of highway driving. This

deviation from a strictly electric car solves the range problem of vehicles run

purely on batteries, but advancements in battery technology could lead to the

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removal of this system in the future.

The engine can be configured to run on gasoline, E85 or biodiesel.

The E-Flex drive system being designed for the Volt represents an attempt to

standardize many components, which would allow GM to take advantage of large

economies of scale for possible future electric vehicles. In the case of significant

battery technology improvement and increasing demand, GM would be able to

quickly increase its production of electric cars and introduce new models with

significantly less development.

The Volt, with four passengers seating and a relatively attractive price of

approximately $35,000, appeals to a broad customer base, in contrast to the

current niche market of Tesla.

If Tesla were to enter the lower end market, it would without doubt face strong

competition from GM. According to Tesla CEO, Elon Musk, The only way for Tesla to

compete effectively would be through differentiation, which would focus mainly on

technology.

5.2.2 Toyota MotorsTesla Motor’s response to Toyota Motor Company’s longstanding hybrid technology

and possible entry into the plug-in hybrid and fully electric car market:

Toyota’s Prius first took the road in Japan in 1997, arrived in America in 2000,

making it the most prevalent hybrid car.

As of September 2007, 430,000 have been sold in the US alone

Toyota’s hybrid technology has been applied to a wide range of cars, ranging

from the $21,000 Prius to the Lexus flagship LS600h with a starting price of

$104,000.

The LS600h, which is a large executive luxury car, falls in the same price range

as the Tesla Roadster, though they serve very different purposes.

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The LS600h is meant to be a comfortable luxury sedan and still uses 20 miles per

gallon because the hybrid power train is mated to a 5 liter V8 engine, which is far

from fuel efficient. As a result, the LS600h is targeted at a completely different

market than the Tesla Roadster.

Tesla should be wary of Toyota offering a larger battery pack and a home

charging station as options for the Prius, as this could eventually lead to Toyota

offering a full electric version of the Prius.

This would cut into Tesla’s plans to offer fully electric sedans at different price

points, the WhiteStar, priced at around $50,000-$70,000, and a more affordable

BlueStar at around $30,000 down the line.

At those price points, Toyota can offer a fully electric sedan under Lexus to

compete with the WhiteStar, and another fully electric version of the Toyota

Camry, their bread and butter car for many years, to compete with the BlueStar.

As a response, Tesla should focus on improving their technological advantage in

fully electric cars so that by the time Toyota enters the electric car market, Tesla

has a technological advantage. (Tesla Motors CTO, JB Straubel)

Also, Tesla with their first mover advantage should build their brand name to

become as prevalent a name in the electric car market, as Toyota Prius, is in the

hybrid car market.

5.2.3 BMW

Tesla’s one of the potential competitor is BMW, which continues to put effort into

entering the luxury, high-performance, low-emissions, low-consumption auto market.

Efficient Dynamics

- “Mild hybrid" technology

- Uses many of the energy-saving elements of hybrid technology without

electric motor assist - Small 4-cylinder gas and diesel engines,

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Regenerative braking, "Start-stop" system, shuts the engine off when not

needed.

- BMW avoids marketing as "hybrid" since there is no electric motor

- Used on the 1 and 3 series, which are BMW's lower-cost, small

sedans/coupes

- Lower cost, easily integrated into existing cars

Hydrogen technology

- A dual hydrogen/gasoline powered version of their luxury 7 series sedan

- Only 125 miles on hydrogen, 300 miles on gasoline

- "World's first hydrogen-drive luxury performance automobile"

Hybrid technology

- BMW demoed an X5 Diesel Hybrid SUV at Geneva Motor Show in 2008

- BMW Vision Efficient Dynamics – A prototype 36 mpg SUV, utilizing a

solar panel roof and hybrid technology

- 5 & 7 series hybrids on the horizon

5.3 Critical Success Factor Matrix

Critical Success Factors Matrix

Critical Success Factors WeightGeneralMotors

ToyotaMotor

BMW Tesla Motor

Price 0.10 3 3 3 5Quality 0.15 2 3 4 5

Customer Service 0.10 3 3 3 2Branding awareness 0.10 3 5 4 2

Variety 0.10 5 2 2 2Distribution 0.10 2 3 3 3

Loyalty 0.10 5 2 3 3Segmentation 0.10 2 3 4 5

Global Expansion 0.05 2 4 3 2Advertising 0.05 2 4 4 3Warranty 0.05 2 4 4 5

TOTAL 1.00 2.9 3.15 3.35 3.55

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Note: 1 being the worst and 5 being the best.

Based on the above critical success factor matrix we can see Tesla Motor has an opportunity to

improve brand awareness and Global expansion. It will bring total score better couple of years

down the line.

6. Company and Management Background

Tesla Motors, Inc. is a Silicon Valley-based company that designs, manufactures and sells

electric cars and electric vehicle powertrain components. Tesla Motors, founded by Elon Musk,

Marc Tarpenning and Martin Eberhard in 2003, is a company that produces a high-performance

electric car and is backed by a number of high-profile investors.

6.1 History

la was founded in 2003 with the idea that the same lithium-ion technology used in laptops would

be used to create a fully electric vehicle that is not only eco-friendly but also attractive and fun to

drive. The company began raising venture capital in the spring of 2004 and by the end of that

year had designed its first vehicle. Tesla produced the first Roadster in 2008 and has sold

approximately 1,350 of these vehicles as of September 30, 2010. In January 2010, Tesla secured

a long-term Department of Energy (DOE) Loan Facility to finance development of EVs,

powertrains, and manufacturing facilities. The DOE loan facility, along with cash generated from

the IPO has allowed for the continuing development of the Model S, the purchase and retooling of

a manufacturing facility in Fremont, CA, and the expansion of the powertrain facility in Palo Alto,

CA

6.2 Strategic Partnership

In March 2008 Tesla entered into a relationship with Daimler AG to develop battery

packs and chargers for Daimler‘s Smart Fortwo EV program. Subsequently, Tesla entered into an

additional TESLA MOTORS development agreement with Daimler for the Class-A EVs, as well

as agreements with Toyota to develop a powertrain system for an electric RAV4 prototype. Tesla

also maintains a relationship with Panasonic for joint development of battery packs. Panasonic,

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Toyota, and Blackstar Investco (an affiliate of Daimler) all have stock ownership in Tesla.

(Appendix 12.5)

6.3 Management

Tesla‘s management team is led by Chairman, Product Architect, and CEO Elon Musk and an

upper management team selected from top automotive and technology firms. Musk is a visible

champion for the company and is almost a symbol of the brand, as well as being a primary

shareholder. Tesla‘s strategic partnerships and their DOE Loan Facility are dependent on Musk

remaining in his role at Tesla and retaining a percentage of ownership in the company until at

least a year after the conclusion of the Model S Facility Project.(Appendix 12.9)

7. SWOT Analysis

7.1 SWOT Analysis of Tesla Model S

Strengths WeaknessesFirst-to-market: Tesla’s Roadster was the first

federally-compliant highway-capable electric vehicle

launched in both the U.S. and Europe, setting Tesla

up to be known as the electric vehicle company.

Model S will not launch until 2012: There is

currently a lot of hype surrounding EVs, and

other than Roadster sales and the Model S

waiting list, Tesla is unable to turn this hype into

sales. Additionally, the delay of the Model S

allows competitors to launch more affordable

EVs before Tesla.

Partnerships: Tesla’s partnerships with Toyota,

Daimler AG, and Panasonic have allowed the

company the opportunity to support their battery

technology research and development. Additionally,

Tesla believes that cooperation with other car

manufacturers advances the electric vehicle cause.

Lack of Brand Name Recognition: Compared

to most of its competitors, Tesla is a not a well-

known brand in the auto industry. As Tesla

attempts to sell EVs to a more mainstream target

market, name recognition will become more

important.

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Focus on design, performance, and efficiency:

Tesla is the only automaker that places equal

emphasis on zero emissions and the performance

and aesthetics of the car. This allows Tesla’s cars to

appeal to a large segment of consumers.

Consumer behavior changes required for EV

purchase: EVs require greater consumer

behavior changes than hybrid or plug-in hybrid

vehicles. For instance, it can take several hours

to recharge an EV battery, whereas it only takes

a few minutes to fill a car with gas.

Battery Technology: Tesla has superior battery

technology to other manufacturers in the industry.

Opportunities Threats

Sales outside of the U.S., particularly Europe,

Asia, and Canada: Tesla has been very successful

in European markets, particularly Germany, and the

company sees great potential in Asian and Canadian

markets.

Continued economic downturn: If the

economy does not improve, Tesla will have

difficulty selling the Model S which could severely

impact the success of the entire company.

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Government regulations and economic

incentives: Since 2008, the DOE has invested $5B

in EV/PHEV technologies. The DOE objectives

include reducing battery pack costs 70% by 2015

(this estimate assumes average battery pack cost of

$600 - $700/kWh around 2008/2009), improving the

public charging infrastructure from 550 level 2 or

level 3 charging stations (of which 426 are in

California) to 20,550 nationwide by December 2011,

and reducing the retail price to consumers by offering

a $7,500 subsidy to consumers purchasing EV/PHEV

s. The government intends to accelerate consumer

adoption of EVs/PHEVs by reducing prices and

making owning EVs/PHEVs more convenient to

consumers.

Source: United States Department of Energy.

The Recovery Act: Transforming America’s

Transportation Sector Batteries and Electric

Vehicles. July 14, 2010 TESLA MOTORS 14

Delays in the launch of the Model S: Any

further delay of the Model S could erode

consumer confidence and allow more

competitors to enter the market before Tesla.

The Tesla Brand Community: Tesla has a strong

and established brand community of owners and

hopeful owners who are very enthusiastic about the

brand. Tesla should manage and leverage this

community to drive sales of the Model S.

Consumer preference for hybrids and plug-in

hybrids: Tesla only sells electric vehicles. If

consumers prefer hybrid technology rather than

EV technology, Tesla is likely to fail.

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Innovative Sales Channel Model: If implemented

properly Tesla’s “Apple store model” will provide a

unique

Termination of strategic partnerships or

inability to establish new partnerships:

Tesla’s R&D has depended on revenue provided

by strategic partnerships. Without this revenue,

Tesla may not be able to fund future R&D.

Source: (Tesla Tomorrow, University of Wisconsin)

7.2 SWOT Analysis of Tesla Model S Manufacturing Model

Tesla Model S SWOT Analysis of Manufacturing Model

Suppliers Production &Manufacturing

InformationManagement

Finance

Strength 1.Less reliant on

the

performance of

suppliers

2.Reduces the

cost of

managing

supplier

relationships

1.Easy to control

quality

and enhance product

2.Relatively easy to

enlarge manufacturing

capacity by further

investments

3.Improve production

efficiency by allowing

engineers and the

manufacturing team to

work closely

Easy access to

reliable inventory,

demand, and

other

important

information

1.Cuts the shipping

cost of ordering most

components from

around the world

2.Reduce the risk of

loss from foreign

currency exchanges

3.Will be able to

reduce the cost of

Model S when

reaching economies

of scale

Weakness Lose

relationships with

suppliers who

may be

needed if New

United Motor

Manufacturing,

Inc. (NUMMI)

capacity can’t

meet demand

1.The production of the

Model S will be

dramatically impacted

by NUMMI’s

manufacturing ability

2.May lose capable

engineers who now are

working in the Lotus

facility located in

England

Merger of two

different ERP

system will require

tremendous

investments of

time, labor and

money

1.Have to hold more

inventory and

present it on the

balance sheet

2.Have to bear more

inevitable

obsolescence of

inventory

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Opportunities Being able to

focus on

building close

relationship with

most

important

suppliers

Largely improve quality

and manufacturing

efficiency

Largely improve

inventory

management to

reduce cost

1.Reduce cost of

Model S

2.Make Model S

more

price appealing

Threats Harder to find

capable

suppliers when

facing a

shortage of

internally

manufactured

components

The loss knowledge

from talented

employees who are

working for suppliers -

Fail to complete

necessary training for

employees without

delaying the launch of

Model S

1.Failure to merge

the two ERP

systems

successfully

2.Ability to

complete

the ERP merger

without delaying

the launch of the

Model S

Possible tremendous

future investments

are needed to

develop NUMMI

facility

Source: (Tesla Tomorrow, University of Wisconsin)

8. Market Segmentation

The process of marketing segmentation involves the identifying of variations in customer needs

and the determining of how these needs can be fulfilled. Customers may differ in many ways;

wants, purchasing power, geographical location, attitudes, personality, knowledge, benefits

sought, and/or habits. Hence, by identifying specific groups within a market, a market campaign

for a product or service can be more fine-tuned to fit specific segments. Besides usual socio-

demographic variables psycho-graphic and behavioral variables were included to identify specific

market segments.

According to recent research in EV sector below figure it is expected that consumer traits as well

as demographic and background variables might influence the attitude towards an innovation

both directly and indirectly, the indirect effects being mediated through attribute perceptions.

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Source: EV Market Segmentation by Anita Garling - Direct and indirect determinants of the

attitude towards electric vehicles

8.1 Demographics, Psychographics, Technographics Based Research

To study perceptions of electric vehicles, and to find volunteers for the experimental

studies, mail-back questionnaires were administered to a random sample of current car owners

in the greater Gothenburg area, Sweden ( Below Table ). Wave 1 was administered in

September 1998 to 300 car-owners and their spouses and wave 2 in December 2008 through

January 1999 to 1,600. A total of 165 fully completed questionnaires were returned in wave 1,

787 in wave 2. The response rate of targeted car-owners was 38.0 % and 34.3 %, respectively.

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Source: EV Market Segmentation by Anita Garling.

Separate analyses of variance were performed including the between subject factors age,

marriage, number of children, education, income, number of cars, driving range to work,

driving cost to work, driving range per week, and interest in further participation. The results

indicate that the subjects differed significantly on number of children and on estimated

driving range per week. More subjects in wave 2 had children while subjects in wave 1 estimated

their driving range per week as longer.

8.2 EV Measurement Scales

8.2.1 Innovativeness

GM Goldsmith and Hofacker (1991) define domain specific innovativeness as a trait reflecting

"the tendency to learn about and adopt innovations/new products within a specific domain of

interest." Furthermore, they also thoroughly develop and test an instrument for measuring domain

specific innovativeness and demonstrate empirically that the instrument is adaptable to different

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domains (rock music, designer fashions, household electronic product area than others” was

removed from the original instrument and another was added, “Of my acquaintances I am one of

the least interested in TV programs like "Motor Journal" to better go with the domain of

alternative-fuelled vehicles. The instrument was adapted to the domain of "alternative fuels

vehicles" and translated to Swedish (Below Table). A five-point agree disagree scale was used.

ItemNo

Innovative Items

1 I am among the last in my circle of acquaintances that would use a car fuelled byan alternative fuel.

2 When I hear about cars fuelled by alternative fuels I become interested in usingone.

3 I would not like to use a car fuelled by alternative fuel.

4 Of my acquaintances I am one of the least interested in TV programs like "MotorJournal".

5 If a friend of mine has a car fuelled by alternative fuel I am interested in trying it.

6 I am among the last in my circle of acquaintances that would know about newalternative fuelled cars.

7 I would prefer to use a car fuelled by alternative fuel.

8 I can imagine buying a car fuelled by alternative fuel without test-driving it first.

9 If I should buy a car fuelled by alternative fuel it had to be of a well-known brand.

10 I know the terms of cars fuelled by alternative fuels before others do.

11 I like to drive cars with new and unusual technique.

8.2.2 KnowledgeIt has been argued that a consumer’s confidence in own knowledge about a risky new product

may influence the person’s attitude towards the product, its strength, and its ability to influence

behavior. If knowledge has such effects, the practical implications for marketing are important. In

this study knowledge about the state-of the- art in electric vehicles is measured by means of a

battery of five multiple-choice questions allowing calculations of two knowledge measures;

objective knowledge (e.g. number of correct answers reflecting how much a person actually

knows about electric vehicles) and subjective knowledge. The knowledge items were; maximum

speed, driving range, external and internal noise, electro-magnetic radiation, price, fuel costs, and

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insurance costs.

8.2.3 Environmental Concern

Environmental concern is in this study defined as a disposition to do the (environmentally) “right

thing” even when it conflicts with one’s own interests. Hence, we follow the tradition of

emphasizing its moral, altruistic nature. In measuring environmental concern the point of

departure is taken in an instrument developed by Biel & Dahlstrand, 1997. A nine-point agree-

disagree scale was used.

8.2.4 Relative Advantage

The relative advantage of the electric vehicles is measured by means of speed, acceleration,

driving range, recharge time, loading capacity, operating costs, price, ease of maintenance, and

environment-friendliness. A nine-point important-unimportant scale was used.

8.2.5 Compatibility

Compatibility with one's lifestyle is measured by means of five items rating describing electric

vehicles’ usability for work trips, shopping, chauffeuring, vacation trips, and irregular short trips

(e.g., to the doctor, to sport). A five-point agree-disagree scale was used.

8.2.6 Complexity and Perceived risk

A number of items were included in the questionnaire in order to measure the perceived

complexity and some aspects of the perceived risk of driving an EV. These items were ease of

maintenance, ease of driving, traffic safety, noise level, risk when recharging, and risk of radiation

from the batteries. Again, a five-point agree-disagree scale was used.

8.2.7 Attitude towards Electric Vehicle

The attitude towards electric vehicles is measured by means of attractiveness, feelings of luxury,

and intention to buy an electric vehicle rather than a conventional vehicle of the same make and

model. Again, a five-point agree-disagree scale was used. In wave 1 buying intention a simple

yes-no scale was used.

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8.3 EV Segmentation Research Results

It is obvious from the presented analyses that not all will respond equally favorably to

attempts to the marketing of an electric vehicle. Presented with the characteristics described in

this study, some consumers respond with a positive attitude towards the electric vehicle and

interest in buying, while others do not. The most likely early adopters of electric vehicles are

those responding most favorably in terms of attitudes and buying intention. Below Table presents

a summary of a cross-tabulation of the responses to the summed attitude items and to the

intention to buy item. As shown, attitude responses can be used to divide the consumers into

groups with widely differing buying intention. Particularly, it shows that among the 16% that hold

the most favorable attitudes towards electric vehicles, 88% express buying intentions, compared

to 58% of the total sample. It seems reasonable to expect that this is the group where the

innovative and early adopters should be recruited.

Source: EV Market Segmentation by Anita Garling.

The ability of consumer traits and perceived product attributes to predict the attitude

towards electric vehicles is analyzed by means of structural equation modeling. Because of

computational problems when the number of items and variables grow big, the full structural

analysis was preceded by exploratory steps checking the ability of groups of demographic and

background characteristics, of consumer traits, and of attribute perception variables to predict the

attitude. Only variables showing a significant path to the attitude in the exploratory steps were

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included in the final structural analysis. It is expected that consumer traits as well as demographic

and background variables might influence the attitude towards an innovation both directly and

indirectly, the indirect effects being mediated through attribute perceptions. Since no hypotheses

existed about which traits or background variables would influence which attribute perceptions, all

possibilities have been checked. The ability of demographic and background variables to predict

consumer traits is also included in the structural analysis as is hierarchical relationships among

trait variables (from the point of view of predicting the attitude towards EV’s). However, According

to Anita Garling published in her research report, in order not to clutter the picture and to free

some degrees of freedom in the structural analysis, all non-significant paths have been removed

in the analysis reported in Appendix 12.5. Hence, the table reports the hierarchical structural

model for predicting the attitude towards EV’s that maximizes the dual criteria of fit and

parsimony.

The attitude towards electric vehicles and its antecedents.

9. Positioning

9.1 Positioning Strategy

Knowing details such as demographics, psychographics, and the lifestyles of a brand’s

target market is a huge key to the success of any retail product. These “vital statistics about

populations such as age, sex, and income” can then be placed into segments, which will allow

this automotive business to research is customers and find the best means by which to draw in

their customers (Weitz, 635). Because Tesla’s main product is a sports car, their target market

consist mainly of the male sex. Due to their currently high price point these males must be

businessmen who have yearly disposable incomes of possibly $100,000 and higher. Tesla’s

Roadster is marketed to consumers who enjoy traveling via their vehicles. Its numerous claims of

being an all weather vehicle clearly illustrate this lifestyle of its consumers. The males included in

this target market live stylish lives, are car enthusiast, and follow trends, such as going green.

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Tesla’s main form of communications with its consumers is through its extensive website.

Teslamotors.com includes everything from all of Tesla’s vehicle specs to each of its appearances

in the press and magazines. Magazine articles have also been a successful form of

communication globally for Tesla. Many of the surveys showed that Magazine articles were the

most popular way in which consumers have heard of Tesla Motors.

10. Marketing Mix

10.1 Product Elements

10.1.1 Tangible Product Elements

10.1.1.1 Dimensions

Overall Length: 196.0”

Weelbase: 116.5”

Ground Clearance: 6.0”

Height: 56.5”

Width (Mirrors Extended): 86.2”

Width (Mirrors Folded): 77.3”

Track: 65.4”Front, 66.9 Rear

10.1.1.2 Body

Lightweight aluminum body reinforced with high strength, boron steel elements

UV and infrared blocking safety glass windshield

Rain sensing, adjustable speed windshield wipers

Frameless, tempered safety glass front windows

Solar absorbing, laminated safety glass rear window with defroster

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Flush mounted door handles

Manual folding side mirrors

19" aluminum alloy wheels with all-season tires (Goodyear Eagle RS-A2

245/45R19). Note: optional 21" wheels come with Continental Extreme Contact DW

245/35R21 high-performance tires

Aluminum roof

Halogen headlights with automatic on/off and LED daytime running lights

Backlit side turn signals, front side marker lights and rear reflex lights

LED rear taillights and high-mounted LED stop lamp

10.1.1.3 Additional Dimensions

40, 60, and 85 kWh battery options

Head room (front/rear): 38.8/35.3"

Leg room (front/rear): 42.7/35.4"

Shoulder room (front/rear): 57.7/55.0"

Hip room (front/rear): 55.0/54.7"

Seating capacity: 5 adults

Total cargo volume: 31.6 cu ft

Rear cargo volume (seats up/down): 26.3/58.1 cu ft

Frunk cargo volume: 5.3 cu ft

Turning circle: 37 ft

Curb weight: 4,647.3 lbs

Weight distribution (%, front/rear): approx. 48/52

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10.1.1.4 Powertrain

Model S is a rear wheel drive electric vehicle. The liquid-cooled powertrain includes

the battery, motor, drive inverter, and gear box.

40 kWh microprocessor controlled, lithium-ion battery

Three phase, four pole AC induction motor with copper rotor

Drive inverter with variable frequency drive and regenerative braking system

Single speed fixed gear with 9.73:1 reduction ratio

10.1.1.5 Suspension, Steering, and Brakes

Double wishbone, virtual steer axis coil spring front suspension and independent

multi-link coil spring rear suspension

Variable ratio, speed sensitive, rack and pinion electronic power steering

Electronic Stability Control

Traction Control

Anti-Lock disc brakes (ABS) with ventilated rotors and electronically actuated

parking brake; front: 355 mm x 32 mm; rear: 365 mm x 28 mm

10.1.1.6 Charging

10 kW capable on-board charger with the following input compatibility: 85-265 V,

45-65 Hz, 1-40 A (Optional 20 kW capable Twin Chargers increases input

compatibility to 80 A)

Peak charger efficiency of 92%

10 kW capable Universal Mobile Connector with 110 V, 240 V, and J1772 adapters

10.1.1.7 Interior

Eight way, power adjustable front seats

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Hand wrapped microfiber and synthetic leather interior surfaces in black

Piano black décor accents

Center armrest with two cup holders

Open center console storage area

Metal interior door handles

60/40 split fold-down second row seats

200 watt, seven speaker stereo system with AM/FM/HD radio. Supports MP3,

AAC, and MP4 music formats. System includes four speakers, two tweeters and one

center channel speaker. Flash memory storage for up to 500 songs.

10.1.1.8 Instrumentation

17" capacitive touchscreen with media, communication, cabin, and vehicle controls

Bluetooth wireless technology for hands-free calling and streaming music

Three spoke, multi-function steering wheel with tactile controls

Tire pressure monitoring system

10.1.1.9 Warranty

4 year or 50,000 mile, whichever comes first, new vehicle limited warranty

40 kWh battery has a 8 year or 100,000 mile, whichever comes first, warranty

10.1.1.10 Convenience

Keyless entry

Driver seat detection sensor for start/stop functionality

Cruise Control

Standard definition backup camera

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Manual rear liftgate

Power tilt and telescopic steering column

Power windows featuring one-touch up and down with resistance reversing to

protect against pinched fingers

Micro-filter ventilation system with replaceable filters

Front LED map lights and rear LED reading lights

Front sun visors

Fully trimmed frunk and rear cargo area with keyless open

12 V power outlet

Automatic climate control with dual zone temperature settings, air distribution

controls and recirculation

Glove compartment

Wi-Fi ready

Dual front USB ports for media and power

10.1.1.11 Safety

Eight airbags: head, knee and pelvis airbags in the front plus two side curtain

airbags

Driver and front passenger seat sensors

Driver seat position sensor

Three point driver and front passenger safety belts with retractor pretensioners and

secondary lap anchor pretensioners and load limiters

Three point second row safety belts for all three seats

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Acoustic front row safety belt warning

Rollover crash sensor

Crash sensor for high voltage disconnect

Three second row LATCH attachments for child seat installations (accommodates

three child seats simultaneously: two with LATCH and one with top tether and belt)

Rear door child safety locks

Interior, manual release mechanism for all doors, frunk, and rear cargo area

Anti-theft alarm and immobilizer system

Horn. Beep. Beep.

Addition Product features with diagrams are mentioned in Appendix 13.9

10.1.2 Intangible Product Elements

10.1.2.1 EV Charger Installation

Model S plugs into any standard outlet. 240 volt outlets, similar to the ones used to

power a dryer, charge Model S more quickly than a standard 110 volt outlet.

The Charge Port is hidden in the driver side taillight.

The cord used to plug Model S into a power source is called a Connector, not a

Charger. The Charger is on-board the car. We may opt for Twin Chargers if we plan

to take a lot of road trips and want to charge as fast as possible.

Model S can be equipped with a Single Charger (10 kW) or Twin Chargers (20

kW).

The Mobile Connector comes standard with two outlet adapters: one for a standard

110 volt outlet and one for a 240 volt. We may purchase additional adapters at any

time. If we’re not sure which 240 volt outlet to select, we recommend a NEMA 14-50;

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it provides more power than other 240 volt outlets. Model S also comes with a J1772

Adapter for use at public charging stations.

We recommend outfitting garage with a 240 volt outlet or a High Power Wall

Connector before Model S arrives. We will need the help of an electrician. Download

a summary sheet: 240 Volt Outlet Summary Sheet orHigh Power Wall Connector

Summary Sheet

Tesla recommends plugging Model S in each night or when convenient to maintain

optimum driving range and battery health. If we go on an extended vacation, plug in

Model S and set it to “Storage Mode” before we leave.

If we leave Tesla off charge for a significant period of time it will slowly lose its

charge. If left at a 0% state of charge for period of time, we may need a battery

replacement.

We do not need to run battery to a 0% state of charge to maintain its health. This is

an antiquated practice for a different kind of battery.

Many utilities offer low rates for off-peak energy usage. If we plan to charge at

night, we recommend speaking with we utility company about options.

if we’re interested in installing a home solar system to charge Tesla, we

recommend working with a local solar installer to develop and install a system that

supports total daily energy demand. Assume average energy usage per mile is

approximately 300Wh/mile (188Wh/km). Learn more about residential solar

installations from our friends at SolarCity.

10.1.2.2 Instruction

Specification and owners manual of Model S will be available in over

webarchive.teslamotors.com download Brochure section. Hard copy of the brochure

would also be available with the vehicle. Image library and FAQ section also will

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include sufficient information about the product specification and instructions. Few

quick facts about the brochure are provided below.

It will be hardbound and printed on recycled paper.

It will in be a CDROM to be downloaded on our computers.

It will be a DVD in which videos explain the operation and functioning of the

model S.

It can be downloaded as a PDF file from TM's webarchive.teslamotors.com.

It can be installed on the model S hard-drive. It would be accessible via the

APPS "button" on the infotainment screen.

Source: http://webarchive.teslamotors.com

10.1.2.3 Product Line Membership

Tesla Motors Model S Club is a comprehensive platform that will provide customers

an open forum to address any questions, issues, reviews, news of the product and

also events. It will have FAQ which provides fundamental knowledge about the

product features, information about Grid Capacity, Engine noise, battery life,

replacement cost, performance, range, solar panel and credibility. Product line

membership will help customer to address issues/doubts in Wiki.

Tesla Motor also provides an online membership that can be accessed

webarchive.teslamotors.com. This area is reserved exclusively for Tesla owners and

reservation holders. It's a private place to keep tabs on your car, connect with other

owners, and ultimately manage maintenance. (Tesla Motors,

webarchive.teslamotors.com)

10.1.3 Brand

Tesla Motors has been successfully enhancing its brand positioning with its innovative

approach to vehicle engineering and battery technology, superior aerodynamics, stability and

handling, unique refusal to compromise beauty or efficiency, and sustainability. Tesla has also

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been recognized as an innovative, “all-weather super car”, with more than fifteen hundred

Roadsters sold in more than thirty-one countries, making Tesla’s brand an important source of

equity. In Tesla’s case, equity is contributed by the functional features and benefits provided to

the user such as instant torque, superior handling, elite construction, and zero emissions. As an

additional source of equity, its innovative high-voltage car, sleek design, as well as the emotional

benefits, are important attributes of owning and driving a Tesla.

Tesla Motors is on the fourth version of its pioneering Roadster and currently competing with a

host of other EVs brands already being sold in the United States. Nissan LEAF and Chevrolet

VOLT, for example, are offering a much lower price compared to Tesla for its electric cars. Prices

range from $32,700 – $41,000 after the federal EV tax credit. The design and some of the

features such as horsepower and mile range make these automobiles better for commuting than

for road trips.

On the other hand, Tesla Motors refuses to compromise its efficiency and beauty. It offers a sleek

front end, fancy wheels, an elegant interior, incredible range and high performance. Price ranges

from $109,000 - $159,195 after the EV tax credit, depending on the models.

Originality Innovative, Creative

Sustainable Environmentally Friendly, Fully Electric

Efficiency Electric Technology, Energy Efficient

Personality Cool, Modern, Stylish

Forward-looking Constantly Evolving

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Source: Tesla Motors Positioning: http://issuu.com

10.1.4 PackagePackaging is not applicable for Tesla Model S cars.

10.1.5 WarrantyModel S will come with a 4 year or 50,000 mile, whichever comes first, new vehicle limited

warranty. An additional warranty covers the battery and varies by kilowatt hour capacity. Battery

warranty for 40 kWh will be 8 years or 100,000 miles, for 60 kWh 8 years or 125,000 miles, for 85 kWh/85

kWh performance will be 8 years, unlimited miles.

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10.2 Price Elements

10.2.1 Pricing Strategies

10.2.1.1 Introductory Price of Model S

Tesla Premium EV Car PriceModel S Model S Signature

Model S Model SPerformance

Signature SignaturePerformance

StartingPrice after$ 7,500Federal TaxCredit

1.40 kWh -$49,900

2. 60 kWh -$59,900

3. 85 kWh -$69,900

1. 85 kWh - $84,900

Includes upgradedinterior, suspension,and wheels

1. 85 kWh -$87,900

1. 85 kWh - $97,900

Source: TeslaMotors.com

10.2.1.2 Federal Tax Credit and allowancesElectric vehicles (EVs) purchased in or after 2010 may be eligible for a federal income tax credit of up

to $7,500. The credit amount will vary based on the capacity of the battery used to fuel the vehicle.

(Fuel economy, 2010) To qualify for the US Federal Tax Credit, the new vehicle must be purchased by

the taxpayer, and not purchased for resale. The credit is applied when the taxpayer completes their

annual tax forms. Qualification is contingent on Adjusted Gross Income.

It qualifies to claim a 100% writing down allowance against capital expenditure in year one. Depending

on the tax rate, the corporation can save a minimum of 26% of the total vehicle purchase price

10.2.1.3 Geographic PricingTesla Motors Premium EV Model S is delivered to US and Canada. Pricing of Model S for US

customers are provided in Section 9.1.1. In a blog on the Tesla website, George Blankenship, the

company’s vice president of worldwide sales, wrote: “Due to volatility in currency rates around

the world, we are not able to announce pricing outside the United States at this time. We expect

to announce pricing about six months prior to the start of deliveries in those areas.” (George

Blankenship, VP Tesla Motors, December 20, 2011). Tesla Model S is expected to reach the UK

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in right-hand-drive form in mid-2013.

10.2.2 Pricing Objectives

10.2.2.1 Sales orientedTesla Motors mostly focus on increasing market share pricing strategy for Model S. Unlike other

car companies Tesla Motors is quite confident about Model S quality and has an objective of

maintaining the present market share or increase its share depending upon its stature. The

pricing goal is to achieve the rapid growth in EV sector and discourage other car companies in

automotive industry to enter the EV market.Tesla Motors will provide base model which is quite

affordable to the middle class within couple of years down the line, this is an objective to be

adopted by Tesla for a transition from other EV sports car to Model S pricing strategy.

10.2.2.2 Profit orientedIn the long run cost of production of Model S will decrease and profits will increase. Tesla Motor’s

long term pricing strategy would be price oriented. Because this strategy helps to achieve a target

return – a specified percentage return on its sales or on its investment. It covers anticipated

operating cost and provides a desired profit. This return Tesla plans to invest in research and

development to come up with a new product line in luxurious EV segment, i.e. Model X.

10.2.2.3 Status Quo orientedStatus Quo oriented pricing strategy is not applicable for Tesla Model S. (LEAF, VOLT, MODEL

S: COMPARISONS AND FINANCIAL VIEWS, 2011)

10.2.2.4 Non-Price orientedNon-Price oriented pricing strategy is not applicable for Tesla Model S.

10.2.3 Pricing Policies

10.2.3.1 One-PriceAt the base price of $49,900 (after US Federal Tax Credit), Model S comes equipped with the 40 kWh

battery, 19" all-season tires, interior surfaces of black textile and synthetic leather, the 17"

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touchscreen, a 200-watt, seven-speaker stereo system with AM/FM and HD radio tuners, a Mobile

Connector and J1772 adapter. Base model will be sold over the internet with a one-price strategy

across North America (USA and Canada). (Motors, 2012) In 2012 and 2013 Tesla Motors would be

focusing on USA EV market with a same base price of Model S, mentioned above.

10.2.3.2 Flexible PriceTesla Model S will be launched with a one price across USA. Tesla is planning to launch same

product in other demographics like Europe or Asia in 2014 and 2015. Flexible Price model would

be followed in other demographics.

10.2.3.3 Skimming PriceTesla will also follow Price skimming as a pricing strategy in which it will set a relatively high price

for a Model S ‘Performance model’ at first than the base model of Model S, then will lowers the

price over time. The objective of a price skimming strategy is to capture the consumer surplus. If

this is done successfully, then theoretically no customer will pay less for the product than the

maximum they are willing to pay. Tesla Motors will continue to invest in R&D sector to improve

the quality of rechargeable betray technologies and this investment comes from number of high

profile investors and government support. Hence, more improvement they make in terms of

technological innovation and incorporate them in Electric Vehicle like Model S, it will help to lower

introductory base price gradually in consumer market.

10.2.3.4 Penetration PricePenetration pricing is not applicable for Tesla Model S. This pricing model is applicable when a

company is trying to make profit in the short term, set a low price at the first launch of a product

and continue to increase the price after certain timeline to make more profit. Tesla Motor’s goal is

to get a long term market share and continue to improve quality in EV sector, especially in battery

technology. Hence initial base price of the Model S car will come down gradually, making the

product affordable to consumer space. Penetration pricing strategy will not be applicable for

Model S.

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10.2.3.5 Reservation and refundable Policy

The reservation payment is 100% refundable.

Reservation payments vary by country: $5,000USD / $5,000CAD. The reservation payment for

Model S Signature is $40,000USD / $40,000CAD.

Reservation Holders will be invited to configure their Model S about three months before its

production date.

Tesla vehicles are designed and built to meet the unique requirements of each market and are

physically different country to country as required by law. Customers should reserve Model S in

the market they intend to register and drive their vehicle. Exporting cars into different markets is

not supported by Tesla Motors.

10.3 Place Elements

10.3.1 Direct Channel SystemUnlike other automobile manufacturers, Tesla sells vehicles over the internet and at

Tesla-owned stores in 31 cities worldwide. Tesla plans to have a total of 50 stores, opening the

additional stores to coincide with the Model S rollout. (Appendix 13.7) In 2010, Tesla hired

George Blankenship, formerly of Apple, as its vice president of design and store development.

"This is about technology, innovation, and a great pipeline of products that need to be explained

to the customer" he told Fastcompany.com.47 Blankenship‘s strategy is to put Tesla showrooms

in the middle of popular retail districts, mimicking the strategy of high-tech companies like Apple,

and completely revolutionizing the typical dealership model. This retail model will allow Tesla to

control the customer experience in each of its stores, providing the necessary customer service

for a high involvement purchase such as an EV. TESLA MOTORS 11 Furthermore, the in-store

experience can confirm the emotional appeal of a Tesla vehicle, making customers already feel

part of a cool, hip, and exclusive brand community. However, this unproven model is not risk

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free. Tesla will not be able to utilize existing franchise sales systems from dealers, and this model

will make it more costly and time-consuming for Tesla to expand distribution.

10.3.2 Channel System managementTesla‘s management team is led by Chairman, Product Architect, and CEO Elon Musk and an

upper management team selected from top automotive and technology firms. Musk is a visible

champion for the company and is almost a symbol of the brand, as well as being a primary

shareholder. Tesla‘s strategic partnerships and their DOE Loan Facility are dependent on Musk

remaining in his role at Tesla and retaining a percentage of ownership in the company until at

least a year after the conclusion of the Model S Facility Project.6 (Appendix 13.8).

10.3.3 Expectations of middlemenTesla will not support Middlemen for Model S Car sell in the market in 2012 and 2013. Hence this

section is not applicable for Tesla Model S Car Model.

10.4 Promotion Elements

10.4.1 Define challenge type

10.4.1.1 Regulatory limitation on internet selling

Tesla sells vehicles from Tesla stores as well as over the internet. Tesla may not be able to sell

vehicles through this sales model in each state in the United States as many states have laws

that may be interpreted to prohibit internet sales by manufacturers to residents of the state or to

impose other limitations on this sales model, including laws that prohibit manufacturers from

selling vehicles directly to consumers without the use of an independent dealership or without a

physical presence in the state. (REGISTRATION STATEMENT - Tesla Motors, Inc.)

10.4.1.2 Branding of Tesla MotorsOne of the greatest challenges of the Tesla is branding. Tesla has a community which is known

as enthusiasts, directly and indirectly promotes it’s brand value to consumer space. Tesla brand

enthusiasts will include Model S across 50 states consumers who aspire to own a Tesla car.

These enthusiasts connect with each other electronically and in person at Tesla events around

the world. (Appendix 13.9)

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10.4.1.3 AcquisitionTesla is looking forward to launch Model S in Europe and Asia in 2013. Currently Model is only

delivered in North America, mostly in USA. Tesla’s next year 20,000 goals likely include at least

some deliveries to European and perhaps Asian customers as well. Tesla will surely hard at work

getting the Model S certified for sale in European Union countries and other markets. Taking into

account the competition and possible cooperation with other companies in the same industry in

Europe and Asia is considered to be one of the challenges that Tesla may face in EV sector in

future. (GREENCARREPORTS.COM, JUNE 26, 2012)

10.4.2 ObjectivesPromotion technique of Tesla Motor Model S is usually designed to last for a relatively long time.

Common sales promotion techniques will include special staging events, pricing, and

advertisements to gain publicity. Tesla will make use of sales promotions to achieve a number of

specific business objectives like increased brand awareness, reaching new market, new product

launch, keep existing customers, inventory clearance. As Model S is one of the cutting-age

models in automotive industry first three objectives will be most important to achieve and

promotional events are designed to address them.

10.4.3 Promotion Elements

10.4.3.1 Video ToutingVideo Touting is one of the self promotional events that Tesla normally follows before every

product launch to increase customer awareness. For the product Model S Tesla Motors will be

releasing a new video touting the upcoming Model S. Just a few minutes long, the video features

Tesla's chief designer, Franz Von Holzhausen, and George Blankenship, Tesla's VP of sales and

ownership experience (and former Apple retail strategist) will be speaking no evil about the all-

electric vehicle. The two men talk about how the Model S takes the idea of a car decades into the

future, filled with close-up shots of the car and clips of it running down the road, we will hear how

great the car drives and how the company will be growing more excited every day to deliver this

revolutionary car to customers. (Blanco, Jan 31st 2012)

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10.4.3.2 Mass Selling

10.4.3.2.1 AdvertisingTesla Motor normally doesn’t invest much in advertisement. Rather than depending on

conventional advertising, Tesla has relied on the quality of its product and word-of-mouth

recommendations from early customers to promote the company.

10.4.3.2.2 PublicityTesla Motors will be looking to clog up traffic a bit more along Santa Monica Boulevard, company

will plan to kick off a 2,700 mile road trip starting at its Los Angeles store. Customers and

employees will gather to kick off a road trip to the North American International Auto Show in

Detroit in coming 2nd week of Oct 2012. The promotional event is part of a series of events from

Los Angeles to Detroit to promote the firm's electric cars. Tesla, which is based in Silicon Valley,

will send 16 employees along on the ride.

10.4.3.3 Sales PromotionTesla Motors couple of popular Sales Promotion will be contests, special pricing during Holiday

season, car show or exhibition, F1 Contests; coupons are the popular sales promotions that

Tesla Motors will adapt for Model S.

10.4.4 Strategic direction

10.4.4.1 Push strategySales strategy of the Tesla Model S will be designed keeping push strategy in mind where main

objective of sales force will be to encourage consumers to buy the product, increase brand

awareness, product features, performance, cost effectiveness, federal tax-cut and long term

saving in terms of maintenance.

10.4.4.2 Pull strategyTesla sales force will be focusing on limited sales service after Model S is sold to the consumer.

Most of the product defects (if any) or maintenance issues of the car would be chandelled by

customer care department and Pull strategy will not be too much applicable for Model S. Tesla

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also provide a significant support through social media such as Twitter, Blogs etc, it would be

used for Model S in similar way.

10.4.5 Communication ToolsMessage New Car, the media TV, direct mail, Brooks Brothers etc will be major communication

tools for Tesla Model S. Motorsports is the time-honored way for automakers like Tesla to

showcase the performance capabilities of their cars, and that presents an interesting conundrum

for high-performance BEVs (Battery Electric Vehicles).

10.4.6 Media Tools

10.4.6.1 Tesla Motors Social MediaTesla Motor uses social media like other car companies to ramp up customer base and branding

purpose. Twitter, Facebook, linkedin, Blog are one of the important social media tools for Model S

promotions. Video uploading in Youtube and touring product upcoming product features is

another most important media tool Tesla will follow for Model S product promotion. (Appendix

12.12)

11. Marketing Matrices11.1 Profit and Loss Statement

Profit and Loss Statement for a Marketing Effort Tesla Motor Model SGross Income

Sales (4 Car / Month X 50 Different States X$ 57,400 / Car X 12 Months) $137,760,000Shipping and Handling collected $900,000Gross Income $138,660,000

Variable CostCost of the Goods Sold $47,400Shipping Cost $2,600Variable Cost for each Car Sold $50,000Total Car Sold 2400Total Variable Cost $120,000,000

Gross ProfitGross Income - Total Variable Cost $18,660,000

Fixed Cost

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Operating cost $500,000Administrative Cost $105,000Insurance Cost $100,000Research & Development $3,000,000Inventory Maintenance $120,500Promotional Events $2,500,000Total Fixed Cost $6,325,500

Profit Gross Profit - Fixed Cost $12,334,500

11.2 Breakeven Analysis of Model S

Breakeven Analysis Tesla Motor Model SSelling Price

Price for Unit EV Model S Car $57,400Fixed Cost

Operating cost $500,000Administrative Cost $105,000Insurance Cost $100,000

Research & Development $3,000,000Inventory Maintenance $120,500Promotional Events $2,500,000Total Fixed Cost $6,325,500

Variable CostCost of the Goods Sold $47,400Shipping Cost $2,600Total Variable Cost for Unit $50,000

Contribution Per UnitSelling Price - Variable Cost $7,400

Breakeven PointTotal Fixed Cost % Contribution Per Unit 855

Breakeven Sales FigureBreakeven Point * Selling Price $49,065,365

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11.3 Return of Investment Analysis

Return of Investment Analysis of a 10500 Model S Tesla EV CarQuantity Produced 2,000# Orders Received 2,400Item Cost of Goods $57,400Cost of Goods $137,760,000

Cost of Shipping & Handling $600,000

Total Variable Costs $138,360,000

Sales Revenue $204,200,000

Shipping & Handling Revenue $900,000

Total Revenue $205,100,000

Promotion CostsOperating cost $500,000Administrative Cost $105,000Insurance Cost $100,000Research & Development $3,000,000Inventory Maintenance $120,500

Promotional Events $2,500,000

Total Fixed Costs $6,325,500

Response Rate 120.00%Average Order Size $85,458Quick Cost Per Order $57,650Total Cost Per Order $60,286Quick Cost/Revenue Ratio 67.46%Total Cost/Revenue Ratio 70.54%Quick Promotion Profit $66,740,000Total Promotion Profit $60,414,500Return on Investment 41.76%

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11.4 RFM Analysis of Model S

Recency Frequency Money (RFM) AnalysisCustomer

IDCustomer name Last order

totalorders

totalspent

recency

frequency

money

178 Zoey Ziff 8/8/2011 5 289000 1 1 1828 Dodi Dunlop 8/1/2011 3 177200 1 1 233 Yoko Yokomi 8/3/2011 3 172200 1 2 228 Ron Remson 8/24/2011 2 114700 1 3 387 Xiu Xuan 8/24/2011 2 112800 1 3 443 Heda Hoppa 8/16/2011 1 57500 1 4 420 Wes Waylan 7/8/2011 5 288000 2 1 116 Ike Isaacs 5/28/2011 5 287500 2 1 1

602 Ursulla Ulian 6/6/2011 4 229200 2 1 211 Aaron Arpes 7/24/2011 3 172100 2 3 385 Debra Darby 6/16/2011 2 114500 2 4 4

1004 Coco Collins 7/9/2011 1 57200 2 5 5402 Edie Edsel 4/12/2011 5 289000 3 1 114 Sam Sampson 3/12/2011 4 229700 3 2 18 Nora Nelson 2/10/2011 4 229100 3 2 2

19 Quito Quimby 5/19/2011 3 172200 3 3 31 Perry Peary 4/25/2011 2 114200 3 4 45 Olga Orca 2/19/2011 1 57300 3 5 5

1297 Bebe Barnes 12/12/2010 4 229700 4 2 2

570 Colen Colon 12/22/2010 3 172200 4 3 3204 Bart Bellum 2/8/2011 2 114700 4 4 3123 Amy Abel 1/10/2011 1 57400 4 5 5192 Greg George 1/18/2011 1 57200 4 5 5

7 Twana Tyler 1/10/2011 1 57200 4 5 5356 Fred Fink 2/15/2004 5 289000 5 1 1

4 Mike Makem 9/12/2010 4 229500 5 2 235 Len Lyons 8/24/2010 3 172200 5 3 335 Len Lyons 7/22/2010 2 114700 5 4 42 Joe Jones 5/12/2010 2 111800 5 4 4

193 Vicki Voss 2/10/2010 1 57200 5 5 5

Best customers are ranked 1 for Recency, 1 for Frequency and 1 for Money. Worst customers are ranked

5 for Recency, 5 for Frequency and 5 for Money. As per above RFM Analysis we can conclude that Zoey

Ziff is the best/most loyal customer, followed by Dodi Dunlop, Yoko Yokomi. Vicki Voss, Joe Jones, Len

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Lyons are interested in purchasing product based on above RFM analysis.

11.5 Lifetime Value Analysis

Lifetime Value AnalysisLifetime Value Calculator Year 1 Year 2 Year 3

# Customers 2000 900 405Retention rate 40% 45% 50%Spending Rate $57,400.00 $67,400.00 $77,400.00Total Revenue $114,800,000 $60,660,000.00 $31,347,000.00

Value Cost % 60% 50% 45%Value Cost $68,880,000.00 $30,330,000.00 $14,106,150.00

Acquisition cost(marketing assistant wage 34000 x

12 month) $408,000 0 0Total cost $69,288,000.00 $30,330,000.00 $14,106,150.00

Gross Profit $45,512,000.00 $30,330,000.00 $17,240,850.00Discount Rate 1 1.1 1.2

Net Present Value profit $45,512,000.00 $27,572,727.27 $14,367,375.00Cumulative NPV profit $45,512,000.00 $73,084,727.27 $87,452,102.27

Lifetime Value $22,756.00 $36,542.36 $43,726.05

11.6 Key Code Analysis

Key Code Analysis

PromotionID

PromotionName

PromotionDate

OfferCode

KeyCode

ResponseRate

AverageOrder

CostPerorder

Cost/RevenueRatio

LifetimeValue

100 Advertising 4/13/2012 Promo_001 1001 80% 600 $57,000 0.298 75853.33101 Road Trip 6/17/2012 Promo_002 1002 75% 350 $57,000 0.174 130034.3

102SocialMedia 2/12/2012 Promo_003 1002 90% 1050 $57,000 0.521 43344.76

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12. Appendix

12.1 Market Penetration Forecasts

EV: Electric Vehicle, PHEV: Plug-in Hybrid Electric Vehicles, HEV: Hybrid Electric Vehicles, ICE:internal combustion engine. Source: Data From CSM Auto (Global Insight), Sourced From JPMorgan Report

Sources: Anson M. Retrieved from http://www.examiner.com/auto-in-los-angeles/estimates-vary-on-electric-vehicle-sales

Data from CSM Auto (Global Insight), Sourced From JP Morgan Report

12.2 The EV and PHEV Market

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EV: Electric Vehicle, PHEV: Plug-in Hybrid Electric Vehicles

12.3 Fuel/ Energy Costs per Mile of Luxury Sedans vs. Tesla‘s Model S

12.4 Range, Battery Pack Costs, and Price/Mile For EVs

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12.5 Tesla Strategic Partnership

Source: Tesla Motors Inc. (2010, September 30). 10-Q. Retrieved from http://ir.teslamotors.com/sec.cfm12.6 The attitude towards electric vehicles and its antecedents

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Source: EV Market Segmentation by Anita Garling.

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12.7 Buying intention, attitude, and attitudinal antecedents regarding a state-of-art electricvehicle

Source: EV Market Segmentation by Anita Garling.12.8 Tesla Store Locations

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12.9 Tesla Executive Team

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Sources:About/Executive Bios. (n.d) Retrieved from http://www.teslamotors.com/about/executive-biosTesla Motors Inc. (2010, February 3). Tesla Hires Toyota Manufacturing Expert. [Press Release]. Retrieved fromhttp://www.teslamotors.com/about/press/releases/tesla-hires-toyota-manufacturing-expertTesla Motors Inc. (2009, October 1). Tesla Motors Announces Senior Engineering and Manufacturing Executives. [PressRelease].Retrieved from http://www.teslamotors.com/about/press/releases/tesla-motors-announces-senior-engineering-and-manufacturingexecutives

12.10 Tesla Model S Product Features

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Source: http://www.teslamotors.com

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12.11 Tesla Enthusiasts

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12.12 Tesla Motors Social Media Brand Community

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13. Reference1. Nada : http://www.nada.org/Publications/NADADATA/default.htm2. Franchise Help : http://www.franchisehelp.com/industry-reports3. Trade Europe: http://trade.ec.europa.eu4. Search Program: http://search.proquest.com/docview/213082564/fulltextPDF?

source=fedsrch&accountid=127685. Yahoo Finance: http://finance.yahoo.com/q/co?s=TSLA+Competitors6. EV Market Segmentation and Communication Strategy by Anita Garling7. Golob, T. & Gould, J. (1998). Projecting use of electric vehicles from household vehicle trials.

Transportation Research B, 32, 441-4548. Power, J. D. & Associates (1993). Automotive consumer profile study. The Power

Report, USA.9. Tesla Motor Specification and Standard Features

http://www.teslamotors.com/models/specs10. Auto Car: http://www.autocar.co.uk/car-news/new-cars/tesla-honour-model-s-pricing11. Model S Update: (December 20, 2011) Pricing and Options : By George Blankenship, Vice

President, Worldwide Sales and Ownership Experience URL:http://www.teslamotors.com/blog/model-s-update-pricing-and-options/

12. Fueleconomy, http://www.fueleconomy.gov/feg/taxevb.shtml13. Blanco, Jan 31st 2012, Tesla shows off Model S in new promo video:

http://green.autoblog.com/2012/01/31/tesla-shows-of-model-s-in-new-promo-video/http://idealab.talkingpointsmemo.com/2012/06/tesla-launches-2012-model-s-how-many-will-it-sell.php

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16. LEAF, VOLT, MODEL S: COMPARISONS AND FINANCIAL VIEWS, 2011http://www.teslamotors.com/de_AT/forum/forums/leaf-volt-model-s-comparisons-and-financial-views

17. Tesla Motors, Vision. About out Company, published in webarchive.teslamotors.comhttp://webarchive.teslamotors.com/learn_more/our_company.php

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24. JP Morgan. Tesla Motors: Electrifying Luxury; Initiate With Overweight. August 9, 201025. Tesla Motors Inc. (2010, September 30). 10-Q. Retrieved from

http://ir.teslamotors.com/sec.cfm26. Audi (2009, December 31). Annual Report. Retrieved from

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27. BMW Group (2009, December 31). Annual Report. Retrieved fromhttp://www.bmwgroup.com/e/0_0_www_bmwgroup_com/investor_relations/corporate_events/hauptversammlung/2010/_pdf/BMW_AG_Jahresabschluss_engl.pdf

28. Quantum Fuel Systems Technologies Worldwide. (2010 April 30). 10-K. Retrieved from29. http://www.sec.gov/Archives/edgar/data/1166380/000119312510157610/d10k.htm30. Toyota Motor Corporation (2009, March 31). FORM 20-F. Retrieved from

http://www.sec.gov/Archives/edgar/data/1094517/000119312509136292/d20f.htm31. Tesla Motors, webarchive from www.webarchive.teslamotors.com32. Tesla Tomorrow, University of Wisconsin from

http://business.library.wisc.edu/resources/kavajecz/10_Fall/TeslaMotors_Presentation.pdf33. http://webarchive.teslamotors.com/users/login.php?frompage=/owners/yourcar.php34. United States Department of Energy. The Recovery Act: Transforming America’s

Transportation Sector Batteries and Electric Vehicles. July 14, 2010

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New York UniversitySchool of Continuing Education and Professional Studies70 Washington Sq South, New York City, New York, 10012Partha Mitra, Management & Systems, [email protected]

Image credit: Tesla Motors