Examining Competitive Advantages In the Evolution

Introduction

A few years after Tesla’s venture into electric car manufacturing, it has evolved to be one of the most prominent players in the global automobile industry, thanks to several competitive advantages the company has developed over the years. This essay aims to evaluate some of the most evident factors that have promoted Tesla’s competitive positioning in the automobile industry.

A Robust Car Battery Supply Chain

Tesla has gained a significant competitive advantage with its robust supply chain of electric car battery considered one of the most cost-effective and efficient ones in the market, thanks to its partnership with one of the world’s leading companies in battery technology – Panasonic. Vance (2013) asserts that Tesla’s success in electric vehicle (EV) is partly contributed by Panasonics quality cells and partly by Tesla’s constant improvement on battery chemistries and packs. Tesla’s scaled up production of the batteries contribute to better production efficiencies and reduced costs. The reduced cost of production is then passed on to the consumers through cheaper but more efficient EV batteries (Muller, 2013).

Fast and Effective Charging Stations

Another area where Tesla does better than its competitors is its ability to understand the car consumers need for fast and effective car charging stations rather than stations that are somehow scattered in different locations (Vance, 2013). According to Lavric (2012), whereas other players in the EV market have left this problem for the market to solve, Tesla has taken advantage and responded to this need by building a network of numerous EV fast-charging stations (super-charger networks) that no other market player in the EV industry can compare with. More interestingly, because the charging fee is included as part of the car’s buying price, Tesla drivers psychologically treated to a lifetime of free car charging, something that is only peculiar to Tesla. Again, Davis (2010) argues that there seems to be no other RV manufacturing company that has taken up Tesla’s model of supercharger networks or one that has built anything comparable to it.

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References

• Davis, J. (2010) “How Elon Musk Turned Tesla into the car company of the future,” Wired September. Retrieved from:
• Lavrinc, D. (2012). “Tesla locks other EVs out of its ‘Supercharger’ Walled Garden, Wired September 25th. Retrieved from:
• Muller, J. (2013). What do Toyota and Mercedes See in Tesla? A bit of themselves, Forbes, June 1.
• Vance, A. (2013) Gone in 90 seconds: Tesla’s Battery Swapping Magic, Bloomberg Bisinessweek, 20th June.