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Amity Research Centers (2018)
Length:
16 pages
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Abstract

Tesla Motors (Tesla), the pioneer electric car maker, with its vision to 'develop and produce all-electric, zero-emission car with incredible power' had threatened the traditional German automakers. Being a disruptor, Tesla enjoyed the first mover advantage, thanks to its brand power, unique growth profile, extensive supercharger network, direct selling model and most importantly well-established battery supply chain. Meanwhile in mid-2017, faced with 'existential challenge' in the electric car market, Volkswagen AG, aimed to 'leapfrog' Tesla through its 'e-Mobility' strategy, and decided to manufacture 1 million electric cars annually by 2020. In order to support this initiative, Volkswagen announced a 'Roadmap E' strategy, with a total investment of EUR72 billion by 2022. Volkswagen decided to add 16 production sites by the end of 2022 for manufacturing electric vehicles dedicatedly. At the same time, the company had also finalised battery supply deals in China and Europe amounting to EUR20 billion. According to industry observers, the competitive advantage of Volkswagen included cost advantage, car-building architecture, millions of loyal customers and brand value. Moreover, the industry observers opined that Tesla lacked a sharp technological edge and the company's business was not 'cash generative'. With Volkswagen attempting to challenge Tesla in the electric car market, the industry observers pondered whether it was easier for Volkswagen to scale up, overcoming the tough competition from the industry pioneer Tesla, which had established a cult status in the EV industry?

Topics

Tesla motors; Electric car market; First mover advantage; Competitive strategies; Market attractiveness; Second mover advantages; Strategic approach; Transform 2025+; Model 3; Roadmap E
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2018

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