Tesla Motors Harvard Case Solution & Analysis

Tesla Motors Case Study Solution

Competitive Advantage:

Innovative Lithium Ion Batteries:

Different from the batteries that have been used by the manufacturers of cars for so long, Tesla has changed the trend in the battery used in cars. The most common type of battery i.e. used in laptops and other rechargeable items has been used by Tesla as a key change in its car. The Lithium ion battery used were supplied to Tesla by Panasonic but were modified with respect to the requirements of car eliminating the use of petrol, diesel or gas.

Large Network of Supercharge Stations:

As Tesla has manufactured cars with rechargeable batteries, this has significantly eliminating the need of petrol or diesel. It serves a key source to protect the environment as well. It has been reported by the Energy department that by 2013 there would more than 6,000 charging stations for public use. Similarly, to overcome the issue of charging, Tesla has stated to establish stations for replacing the battery with the charged one in just 90 seconds.

Direct Sale to Customers:

Almost every organization in the car industry sells its car through a dealership process. Unlike other firms in the organization, Tesla sales and services are independent of dealership. As Tesla has built its own stores for the sale of its products. These stores are owned by Tesla itself. The employees hired as salesperson on salary instead of commission per sale. Thus, no suppliers or retailers are involved in the sale of Tesla’s car. (MOON IS AHMED, 2015)

Entrance Strategy of Tesla:

Throughout its journey from its origination till now, the main focus of Tesla was to make an affordable car but with innovative technology and creative ideas.The first production car by Tesla – Roadster was made with the same focus. The entire manufacturing of cars was based on the idea of its use of car battery that was a common battery – Lithium Ion i.e. other than batteries being used in the car manufacturing. This was the key that resulted in the differentiating car from others as other cars need oils for running whereas cars made by Tesla motors are rechargeable in favor of ecological conditions as well as cost-saving.


Though, Tesla Motors are strong competitors in the car industry around the world. The research and development of Tesla is also strong enough to compete in recent times. But the declaration of the new model to be launched after the rumors is a key challenge for Tesla’s. This is due to the reason that the technology used in designing and manufacturing of cars by Tesla is quite expensive. Tesla needs to focus on the situation and then take a smart move against its statement of new model launch in the market. With the fact that Tesla’s cars require much money for the development of car and if the car is to be made at low price there might be compromise in any of the feature of car that significantly differentiates Tesla from others.


In the international car industry, Tesla is coming up with rapid changes in its position in the market. It has been a strong competition to many organizations in the United States as well as other firms around the world such as BMW and Audi.As recently, Tesla has introduced a model that competed the features of BMW and Nissan’s speed with great acceleration. But they key issue for Tesla is its statement about the upcoming model cost. This is not considered beneficial for Tesla in any way. Tesla needs to take some serious measures against this issue.



Exhibit 1

Tesla’s car models Roadster, Model S and Model X.

Exhibit 2

Porter’s Five Forces Model:

Exhibit 3

Competitive Advantage:


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