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TABLE OF CONTENTS

Executive Summary................................................................................................................1

Introduction...............................................................................................................................2

USA’s Electric Automotive Industry (ADD MARKET SHARE)......................................................3

External Analysis: Electric Automotive Industry........................................................................3

Key Drivers..............................................................................................................................3

State law.............................................................................................................................3

Policy Incentives..................................................................................................................4

Emissions & Fossil Fuels......................................................................................................5

Cost.....................................................................................................................................6

Trends.....................................................................................................................................6

Development of Better Clean ENERGY VEHICLES (Legal & Ecological & Technology &
Social)..................................................................................................................................6

Uncertainty via Inconsistent Laws (legal & Ecological & Social).........................................7

Power......................................................................................................................................8

Degree of rivalry.................................................................................................................8

Industry Attractiveness...........................................................................................................9

Internal Analysis: Tesla...............................................................................................................9

Core Competences ................................................................................................................9

RESEARCH & DEVELOPMENT..............................................................................................9

VRIN Analysis........................................................................................................................11

Competitive Advantages......................................................................................................12

Company Distinctiveness......................................................................................................12

Conclusion................................................................................................................................12

References................................................................................................................................13
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Executive Summary

This report covers the electric vehicle in USA and the internal analysis of Tesla
Company. They key drivers that have been used in the report are state law, policy
incentives and the fuel emission while trends have been used are provide better and
clean environment to the country where the industry has to face uncertainty in the
progress due to the law. The Tesla Company has been analysed using VRIN while
discussing its competitive and distinctiveness advantages.
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1. Introduction

The main purpose of this report is to provide external analysis of electric vehicle industry of
the USA as well as internal analysis of a renowned company under the name of Tesla. The
external analysis of the company is based on model PESTEL and the five forces of porter to
comprehend the key drivers, power, and trends of the industry. Furthermore, this information
will be used to find the factors that are attractive to the people with respect to the industry.
Observing the resources, skills, competencies as well as value chain the internal analysis of
Tesla will be followed by Vireo analysis that will mention the competitive advantage to
determine if Tesla is distinctive from the market competitors (Becker et al, 2009)

2. USA Electric Vehicle Industry

The electric vehicle industry of USA is based on different types of electric vehicle that is
manufactured by the company. There are three categories of EV which are based on battery
electric vehicle, fuel cell electric vehicle and hybrid electric vehicle although there are also
much more types that can be discussed the main category that is being used in the USA is a
plug-in electric vehicle. In the last decade, the US electric market has made been successful
in recording an impressive growth in the market. The use of EV in different states of US is
because many states have different rules and regulation which has affected the EV industry.
The plug-in hybrid vehicle is the technology that has potential to change the way we use
power transportation and the impact of transportation on the environment.

3. External Analysis
3.1. Key Drivers
3.1.1. State law

The states of US that include Virginia, California and Colorado including more than 14 states
have applied additional annual fees ranging from 50-300 dollars for the electric vehicle to be
paid for the infrastructure of transportation. Now the many states are thinking to change their
mode of transport where they are concerned about making the difference in the energy
content and chose to use alternate resources instead of gasoline and diesel. Considering this,
the many states in the US have implemented tax as they believe that the owners of electric
vehicles do not have to pay any tax because they are using no other form of energy, as a
result, there is no extra cost that is applicable to them
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According to the state law that is mentioned above has a negative impact on the EV industry
of US as it has prohibited the industry to grow in many states. Consumers would think that it
is better to pay the taxes rather than being charged with the extra amount of money for the
things that they are not even using. It is not acceptable to accept that such vehicle that is
environment and cost friendly could be charged with annual fees to be paid by the owners.
This has restricted the user to make their choices while for the future people would think
before inventing such vehicles as their choices will also be limited to the number of lands in
the US.

3.1.2. Policy Incentives

In the growing industry of electric vehicle, policy incentives play a major part. According to
the policy that the US has adopted the 200,000 units of cells of the products manufactured by
the company which have been sold for the use within the country must be taxed ranging from
2,500 to 7,500 US dollars. In the states like California it promotes the environment friendly
and safe vehicle option for the transportation while the owner has to be rebated 7,000 dollars
for buying or leasing the electric vehicle which has zero-emission.

In the following years 2050, the number of electric vehicles will increase by 12% partly due
to being cost friendly and the different policy of the stats. This indicates that the policies that
government has implemented are bound to work in the future concerning the massive growth
of the industry, the government has to make sure to keep promoting the rules and policies that
they have implemented so they can have a long-lasting effect on the industry as well as on the
consumers of the electric vehicle (Hampstead, 2018). 

3.1.3. Emission and Fossils Fuels

The gas emission of the greenhouse has impacted many states, such as California, and thus
caused to implement the strict laws to bring the better change in the environment of the state.
California along with the other states of US have introduced zero-emission vehicle, where
they made sure a certain number of vehicles should be sold by the year 2025, as they consider
that the transportation is the leading factor for the emission of greenhouse gases in the US
that is 25%.
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The concerned departments that include US department of transportation, US environmental

protection Agency, as well as California Air Resources Board, debated that the automakers
should make sure to reduce the fuel consumption and the greenhouse gas effect by 4-5% in a
year. The fact that the greenhouse gas emission is high has made a positive effect on the
electric vehicle industry as users are keen to use the mode of transportation that is clean and
does not emit any gas that can cause harm to the environment.

The main reason for the mission is in the use of fossils fuels that are being used in the
vehicles for a very long time. The US has to import a considerable amount of petroleum per
year where a vast amount of money has to be spent. Considering the deployment scenario of
US the country’s oil imports will be significantly lower in the 12-15 years by 18-38 percent
as compared to the improved ICE fossils fuels. In the year of 2009, the US has to import 11.7
million barrels consisting of crude oil and petroleum products where a major sector of the
transport depends on the oil.

3.1.4. Cost

Considering the technology the future cost of the drive in technology is supposed to be
reduced by 8% per year as to make it more economical for the people to use the electric
vehicle in the country. If the future cost of the vehicle industry will decline there will be the
number of buyers in the country that can help the economy of the USA as there will be the
lesser use of petroleum in the transportation sector of the country. This can also have an
impact on the social and environmental causes of the USA as well as electric vehicle
industry. It is believed if the amount of cost will be reduced the consumers will feel that the
vehicle now is worth to buy (Naughton, 2017). 

3.2. Trends
3.2.1. Better Clean Energy Vehicle

The federal policies that include advanced technology vehicle manufacturing provoke the
electric vehicle industry to invest in the new technology and produce a better clean energy
vehicle. It is believed that these incentives can bring a better and bigger change in the way
vehicles are manufactured while keeping the industry up to date about the invasion of new
technology and development (Levinson, D. (2014). The Mission can be controlled as the new
automakers have the tendency to make a better use is technology. This is quite evident in the
states like California where the automakers can test their new invention in the electric vehicle
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and make it better for the use of the people. This has attracted more attention of the
consumers especially within the states that support the electric vehicles where this technology
can win the battle against greenhouse gas emission.

3.2.2. Uncertainty via Inconsistent Laws (legal, Ecological & Social)

The commercialiaation of electric industry is being held back due to an uncertainty as well as
the knowledge gap. The suppliers and the consumers are not sure about the future of electric
vehicle and where it can lead them considering the automotive industry considering the fact
that it is still new to the industry and can have the impacts that the automakers might not have
contemplated (Gordan et al 2017)

These inconsistencies are evident in Michigan and Maryland where the formers state does not
allow the electric vehicles to be sold directly while the latter sales permit the direct selling of
electric vehicle. These inconsistencies have affected the growth of the industry, as a result,
the automakers will have to locate for another option or outsource their products where they
can have more opportunities. The goal of the company that is to reduce the emission of
greenhouse gas cannot be achieved if there will be restricting laws concerning the industry.
Many states do not allow the use of an electric vehicle that has a lesser effect on the
awareness of people and social consumers that has affected the company in a negative way.

3.3. Power

It is more likely that there will be more competitors in the market due to the unprecedented
growth of the electric vehicle industry. Considering the laws, they should be made more
consistent.

With the advancement of technology, many other industry and automakers are spending a
considerable amount of money on electric vehicles regardless the fact that most of their
strategies are based on prototypes. Although the number of automakers is rising and the
electric vehicle in the USA is growing with steady progress but the uncertainty has put off
many companies to proceed in future.

The cars are heavily dependent on the consumers as well as the businesses. The buyers can
switch from one model of the car to another model without paying or investing the extra
amount of money that is heavy on their pockets, therefore, the consumers prefer to buy things
that are based on the quality and the price that are affordable to them.  
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The buyers who are available in the market have less knowledge about the electric vehicle
industry but if they agree to attain more knowledge regarding the company and the products
that it manufacture it will make them more and more keen to attain the knowledge regarding
the technology that has been used in electric vehicles which can influence their purchasing
choice in the future.

Due to the growth of electric vehicle industry, there are more chances for the rivalry, but in
the future of the electric vehicle industry the consumers are expected to see few electric
vehicle industries to remain in the market as many of them have been failed to grow due to
the laws implemented in different states of US.

The power supply concerning the electric vehicle industry is high. If there will be the number
of companies that are producing electric vehicle than the amount of lithium required in the
country will increase, but the prices of lithium-powered batteries are declining. The new
companies will join the electric vehicle market so as to maintain the supply chain of batteries
within the company; otherwise, there will be fluctuation in the price of the batteries.

The main threat to electric vehicles is the normal cars that consume petrol. The hydrogen-
powered cars or solar cars are also a substitute for electric vehicles but they are still under
experiment and observation while there are or other options that can replace the electric
vehicle and its efficiency.

3.4. Industry Attractiveness

Considering the situation of the current market, electric vehicles are not attractive from any
perspective. Although in the coming 20 years there is a vast number of chances that the
company will grow steadily but they will find it hard to compete in the market of US and
over through the conventional vehicles that are advancing day by day. If the laws that some
of the states within the countries had not implemented there were number of chances for the
industry to grow all over the world and take over other companies within no time, but due to
restriction the automakers have minimum time and cost to spend in the market of the vehicle
as it would take millions of dollars to invest in the research and development procedure (Jin
and Slowik, 2017). 

4. Internal Analysis
4.1. Core Competencies
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The smart use of money by the company Tesla has resulted in the company to become the
leader in the market with respect to the research and development criteria. The core
competencies of the Tesla are to manufacture innovative and new technologies in vehicle
engineering and power train. Through these competencies, the company has engineered the
business to become a king in the vehicle motors and cars that have played the role of big
competitive advantage through gaining more number of customers and companies who are
seeking for the leaders in the electric vehicle market. The company has started to
manufacture the batteries at the lowest price possible that has also cut their cost for the future.
They have been increasing their research and development in the past years wherein 2017
they managed to attain the highest investment recorded. They are more committed to the
company and how to better the technology that is the reason they are a leader in the US
market (Kanematsu, 2018).     

4.2. VRIN Analysis

4.3 competitive advantages of Tesla

The cars manufactured by the Tesla are designed from the basics like a computer. Almost
every function of the car is involved using particular software that has made the company to
analyze the data of the vehicles and optimize the functions accordingly. Tesla aims to deliver
the autonomous capability in driving the car that many of the vehicle industry could not
provide while they tend to. Some of the cars that are manufactured by the Tesla are equipped
with the sensors to that are necessary for the autopilot sensors.

Tesla tends to use these technologies for enabling the ridesharing platform, which will be
known as Tesla network through which the owners of the cars will be able to rent their cars
by providing autopilot so to make the maximum profit from their cars. But with this idea and
the concept, the economy of the US will disrupt the automobile market as the transportation
economy will be transformed (Campbell, 2017)

4.4 Distinctiveness

Through the distinctive actions of the Tesla that they use for the success of the company
provided with the grand gesture and making the future visions bold, the company has made
the brand idea standard in the mind of the people. They have changed the vision of the people
of the car and how smooth and flexible driving should be. They have changed the name of
comfort into the luxury as they are more passionate and brand that is purposeful. They are
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making it visible to the people about the brand image that it has and how distinct their ideas
and technology is. They are inventing new forms of cars and models that are attractive to the
people providing the gestures that people might not have imagined.

Conclusion

To conclude the above report it has discussed the external analysis of electric vehicle industry
as followed by the internal analysis of Tesla. From the analysis of key drivers and the trends
that have been used in the report related to the electric vehicle industry it cannot be wrong to
say that the industry is not attractive due to some of the uncertainties within the company,
while it is not suitable for the company to spend a large amount of money in market and
resources as well as in research and development procedure that have no certain chances of
growing with the time. After analysis the Tesla as the electric vehicle industry it can be
concluded that Tesla has distinctive ideas and meaning to the industry while trying best to
provide the most luxurious and suitable car to the people by spending ample amount of
money in research and development.
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Capability Value Rarity Imitability Non- Competitive

Substitutability Implications
Research & YES YES YES NO Competitive
Developmen There is value As compared The research This cannot be parity –
t in the research to the other and the substitute nor Tesla is
and companies it development have any other considered to
development is rare to see process can be option as the be miles ahead
as teals tends the amount limited if the company has than the other
to spends being spent company spend a companies in
millions on on the tends to spend considerable their research
Research and research and appropriate amount of and
development, development amount of money on the development
they also are of the money for the research and projects as they
the leader in company and purpose while development believe to
electric vehicle the products. hiring the purpose. invest the most
industry in the engineers and to get the most.
US. researchers
who have
adequate
knowledge.

Brand YES NO NO NO Competitive

Management They are To consider This can be This cannot be parity –

known as the the strong imitated by substituted as As the company

premium management other brands. the market of has managed to
brand. BMW is the the teals is remain at the
one of the good at selling pinnacle of the
vehicle keeping the success it is
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company. prices as low as rather next to

possible. impossible to
dethrone them
from the
market of
electronic
vehicle.
Electric YES YES YES NO Competitive
Powertrain The power Enables Luxury car- Tesla’selectric parity

train future electric makers will powertrain is

technology of vehicles to launch a unique and
the company use a selection of cannot be
has made it significant electric substituted due
the leader in amount of vehicles in to its ability to
the market. this 2019, most of be used and
technology. them rolled bettered.
(Ir.Tesla.com, out across
n.d.) many brands
in 2021.
(Ferris, 2017)

4.3 competitive advantages of teals

The cars manufactured by the Teals are designed from the basics like a computer.
Almost every function of the car is involved using particular software that has made
the company to analyze the data of the vehicles and optimize the functions
accordingly. Tesla aims to deliver the autonomous capability in driving the car that
many of the vehicle industry could not provide while they tend to. Some of the cars
that are manufactured by the Tesla are equipped with the sensors to that are
necessary for the autopilot sensors.
 Page | 12

Tesla tends to use these technologies for enabling the ride sharing platform, which
will be known as Tesla network through which the owners of the cars will be able to
rent their cars by providing autopilot so to make the maximum profit from their cars.
But with this idea and the concept the economy of the US will disrupt the automobile
market as the transportation economy will be transformed (Ferris, 2017)

4.4 Distinctiveness

Through the distinctive actions of the Tesla that they use for the success of the
company provided with the grand gesture and making the future visions bold the
company has made the brand idea standard in the mind of the people. They have
changed the vision of the people of the car and how smooth and flexible driving
should be. They have changed the name of comfort in to the luxury as they are more
passionate and brand that in purposeful. They are making it visible for the people
about the brand image that it has and how distinct their ideas and technology is.
They are inventing new forms of cars and models that are attractive to the people
providing the gestures that people might had not imagined.

Conclusion

To conclude the above report it has discussed the external analysis of electric
vehicle industry as followed by the internal analysis of Tesla. From the analysis of
key drivers and the trends that have been used in the report related to the electric
vehicle industry it cannot be wrong to say that the industry is not attractive due to
some of the uncertainties within the company, while it is not suitable for the company
to spend a large amount of money in market and resources as well as in research
and development procedure that have no certain chances of growing with the time.
After analysis the Tesla as the electric vehicle industry it can be concluded that Tesla
have distinctive ideas and meaning to the industry while trying best to provide the
most luxurious and suitable car to the people by spending ample amount of money in
research and development.
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References

Becker, T., Sidhu, I. and Tenderich, B. (2009). Electric Vehicles in the United States A New

Model with Forecasts to 2030. [ebook] Center for Entrepreneurship & Technology
(CET), p.1.

 Campbell, P. (2017). Tesla gains on rivals in the great brand race. [online] Ft.com.

WRONG

 Ferris, R. (2017). As Tesla goes mainstream, luxury carmakers plan rivals to shake up the

market for electric cars. [online] CNBC.

RIGHT

Ferris, R. (2017). As Tesla goes mainstream, luxury carmakers plan rivals to shake up the
market for electric cars. [online] CNBC. Available at: https://www.cnbc.com/2017/07/28/as-
tesla-goes-mainstream-luxury-carmakers-plan-rivals.html [Accessed 16 May 2018].

 Gordon, D., Sperling, D. and Livingston, D. (2012). Policy priorities for advancing the
U.S.

electric vehicle market. Washington, DC: Carnegie Endowment for International Peace, p.6.

 Hampstead, J. (2018). Chinese EV makers plan expansions into the U.S.. [online]

FreightWaves. Available at: https://www.freightwaves.com/news/2018/1/17/chinese-ev-

makers-plan- expansions-into- the-us [Accessed 3 May 2018].

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 Jin, L. and Slowik, P. (2017). Literature review of electric vehicle consumer awareness

and

outreach activities. [ebook] The International Council on Clean Transportation, p.2. Available

at: https://www.theicct.org/sites/default/files/publications/Consumer-EV-

Awareness_ICCT_Working-Paper_23032017_vF.pdf [Accessed 3 May 2018].

 Kanematsu, Y. (2018). Chinese electric cars turning heads in US. [online] Nikkei Asian
Review.

Available at: https://asia.nikkei.com/Asia300/Chinese-electric- cars-turning- heads-in- US

[Accessed 3 May 2018].

 Ir.Tesla.com. (n.d.). Tesla - Annual Report. [online] Available at:

http://ir.Tesla.com/secfiling.cfm?filingid=1193125-13- 96241&cik=1318605 [Accessed

2 May

2018].

 Levinson, D. (2014). Electric Avenue: How to Make Zero-Emissions Cars Go

Mainstream.

New

York: Council on Foreign Relation, pp.21-26.

 Naughton, K. (2017). The Near Future of Electric Cars: Many Models, Few Buyers.
[online]

Bloomberg.com. Available at: https://www.bloomberg.com/news/features/2017-12- 19/the-

near-future- of-electric- cars-many- models-few- buyers [Accessed 3 May 2018].

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