The first post focused on Tesla vs. BMW. Read it here. This post takes a little wider focus.
The likely effects in the German and EU vehicle marketspaces of an Alien Invader Tesla in 2023 and beyond may be startling. Here is a quick comparison (Casting together what would have been 70 parts into two) of Tesla manufacturing methods compared to current ‘German Car Inc’ factories. The growth of Tesla vehicle buying in the EU (particularly luxury and EV segments) is likely to accelerate. The revenue and margins of competitive vehicles are likely to suffer. This is a strategy of an Alien Invader to attack the highest margin products (such as the luxury vehicle segment) and place competitive strain across multiple product lines (EVs in this instance).
Tesla will not be a ‘foreign manufacturer’ with production at a highly efficient German facility. Tesla will get lower logistics costs, more market presence, and reduced sales/marketing costs at scale compared to competing with its imported Chinese products.
Tesla brings other pressures to their competitors. The increased costs of petroleum fuels will create additional EV migration pressures. Remote work will reduce commuting time and distances spent in vehicles extending the useful life of Tesla and other EVs. Relationship buyer segments will welcome the direct-to-customer business model. Over-The-Air improvements, fixes, and cosmetic driver user interface changes will create a sustainable value perception for the Tesla brand. Tesla’s experience (including recalls in the USA) at high volumes will continue to pressure German manufacturers in competition.
Investments by the German and EU governments into charging infrastructure (as well as Tesla’s own SuperCharger network) will continue to produce network effects benefiting EVs. Tesla operates more than 1.000 SuperCharger locations in Germany. German and EU regulators are still evolving standards for multi-brand services and payments which has caused friction with Tesla’s current deployment models. Continued migration to EV’s urged by governments and social pressure will contribute to Tesla’s benefit.
Tesla is a true Alien by EkaLore's definition, breaking the rules on the manufacturing floor, the sales channel, and the marketing strategy.
To read about more companies entering new markets, breaking established “rules” and capturing profit read more articles here at www.ekalore.com/alien-invaders
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