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What Makes Tesla’s Business Model Different?

In TESLA trade the demand for completely electric automobiles is increasing at an exponential rate. There are a variety of reasons for this, including new restrictions on car safety and pollution, technology advancements, and changing customer expectations.
However, Tesla Motors Inc. (TSLA) and TESLA trade innovative business strategies that may be credited with a large part of the public acceptance and enthusiasm surrounding electric vehicles.
“To expedite the advent of sustainable transportation by bringing appealing mass-market electric vehicles to market as soon as feasible,”  said Tesla founder and CEO Elon Musk when he founded the firm in 2003.  Tesla’s successful business strategy is built on the foundation of this objective.

Tesla’s First Product

The company Tesla chose novel strategy to get its name out there in the market. 
Instead of attempting to construct reasonably inexpensive car that could be mass-produced and marketed,  it adopted the opposite strategy, concentrating instead on building an appealing automobile that would generate demand for electric vehicles in the first instance.
Tesla CEO Elon Musk stated the following about the company’s mission in blog post on the company’s website: “If we could have [mass marketed] our first product, we would have, but that was simply impossible for startup company that had never built car and that had only one technology iteration and no economies of scale.” 
The cost of our initial product was going to be prohibitively costly no matter how it looked, so we opted to design sports car since it appeared to have the best chance of being competitive with gasoline-powered alternatives.”

The Next Stage

Its business strategy was strengthened after Tesla successfully developed its brand and successfully manufactured and delivered its prototype vehicle to the market. A three-pronged approach to selling, repairing, and charging Tesla electric automobiles is at the heart of the company’s business strategy.

Direct Sales

Tesla, in contrast to other automobile manufacturers who sell through franchised dealerships, sells directly to consumers. It has established an international network of company-owned showrooms and galleries, most of which are located in metropolitan areas.

Tesla thinks that by controlling the sales channel, it will be able to obtain an edge in terms of product development speed. More significantly, it results in a more positive client purchasing experience. Tesla showrooms, in contrast to vehicle dealerships, are free of potential conflicts of interest. Customers exclusively engage with sales and service representatives who are employed by Tesla.

As of the end of 2021, Tesla will have 438 sites across the world, including showrooms, Service Plus centers (which are a combination of a retail store and a service center), and service facilities, among others. Tesla has also taken use of the Internet for sales, allowing customers to design and purchase a Tesla vehicle online.

Home Services

Tesla employs what the company refers to as Tesla Rangers, who are mobile technicians that conduct house calls in certain locations. In certain instances, the service is provided over the internet. The Model S can remotely transfer data, allowing personnel to inspect and solve various issues without ever having to physically touch the vehicle.

The Supercharger Network

For the first time, Tesla has built its network of “supercharger stations,” where drivers can charge their Tesla vehicles for free in as little as 30 minutes. The goal, of course, is to accelerate the rate of adoption of electric vehicles by making them less expensive and simpler to maintain in operation.

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Models From Tesla

Tesla entered the market with the Roadster, a sports car with a lot of power. Model S was debuted in June 2012, and the Roadster was no longer in production when that happened.

It was in September 2015 that Tesla began delivering its first SUV, the Model X. The Model 3 was introduced in July 2017 as Tesla’s debut in the area of cheap vehicles. It was the first Tesla vehicle to be delivered.

In 2020, the starting price for the basic model was $36,200.

Tesla has consolidated a large number of its sales outlets with service centers, which include charging stations, to save money. They think that building a service center in a new location corresponds to an increase in client demand in that location. Service centers and Service Plus sites are available to customers for charging and maintenance of their cars.

Tesla also manufactures a completely electric semi-truck, which is known as the Semi Truck. The vehicle consumes less than 2 kWh every mile driven, which is quite low for its class. As of now, the business says that it can travel 400 miles on a 30-minute charge.

It is striving to increase that range to more than 600 miles shortly. UPS was one of the firms that placed pre-orders for the vehicle, which will be delivered in 2019.

A supercharged version of the original Roadster, Tesla’s newest model is said to be the “fastest automobile in the world,” capable of driving from 0-60 in 1.9 seconds and reaching speeds of up to 200 mph. It is anticipated that deliveries of the new Roadster will begin in 2023, with a starting price of $200,000.

Interested parties may reserve a new Roadster with a $5,000 initial credit card payment and a $45,000 wire transfer, with the latter payment due within 10 days of the original payment being made.

What Makes Tesla's Business Model Different?

The Bottom Line

In the absence of a charging infrastructure that allows for on-the-go charging, the adoption of electric cars will be slow or non-existent. Tesla intends to continue expanding its network of Supercharger stations in the United States, Europe, and Asia, according to the company.

Even the premium electric automobile, which Tesla does not claim to have invented, was not invented by Tesla. Tesla, on the other hand, developed a successful business strategy for introducing enticing electric vehicles to the market.

A key component of the strategy was the development of a network of charging stations to address one of the most significant barriers to the widespread adoption of electric vehicles: the need to recharge on long journeys. In part, Tesla’s unique business plan, which includes maintaining complete control over sales and servicing, is responsible for the company’s stock price skyrocketing since its first public offering.

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