Tag Archives: engineering

Only a few short weeks ago we wrote that Tesla Motors announced pre-sales for its Model 3. While the car will not be available until 2017, pre-sale orders quickly surged. In the first few days, orders passed 110,000 units for an estimated revenue of $4 billion. Seems like a lot, but wait…

A little more than one week after opening the ordering process, Tesla stunned the industry when it announced that it had received $1,000 deposits for more than 325,000 cars – corresponding to an estimated $14 billion in future sales revenue! This is an amazing volume for a pre-sale for a vehicle that is not yet in full production.

Sounds ideal for the company, but not necessarily ideal for customers. Last year, Tesla delivered an estimated 50,000 vehicles, which would make for an extremely long wait time for Model 3 deliveries. However, the cash from the deposits should help Tesla more quickly expand its manufacturing capacity.

One wonders though – since there are other electric vehicles on the market from companies such as General Motors, Nissan, Toyota, and more, what is it that makes this vehicle such an enticing draw for consumers?

Group Activities and Discussion Questions:

1. Show Tesla’s announcement: https://www.teslamotors.com/blog/the-week-electric-vehicles-went-mainstream
2. Discuss pricing strategies and models: demand-oriented, cost-oriented, profit-oriented, and competition-oriented.
3. Which strategy is Tesla using? Why?
4. Divide students into teams. Given the large volume of pre-orders, who is the target market for the Model 3?
5. Discuss what would happen with sales volume if Tesla raised the price.
6. Have teams develop a SWOT analysis for Tesla.

Source: New York Times, Wall Street Journal, other news sources

Like many car enthusiasts, we have been waiting for Tesla to launch a new model that costs less than the $100,000 price tag of the Tesla Model X. The wait is finally over and Tesla is now taking pre-orders for its new Model 3, priced at a more reasonable $35,000. At this price, the response was overwhelming, resulting in long lines at Tesla dealerships on March 31^st to place a $1,000 deposit for the new car.

The Model 3 is not expected to be delivered until late in 2017, but nonetheless it already has an enthusiastic following. The new model is expected to have a range of about 215 miles when fully charged and be able to go from 0 to 60 miles per hour in less than six seconds, giving it an advantage over competition from Nissan and BMW.

With the introduction of Model 3, the company also hopes to increase annual sales from 85,000 cars this year to 500,000 cars by 2020. Already, there are more than 115,000 orders for the car. If all the orders turn into final sales, revenue from Model 3 could exceed $4 billion.

All electric vehicles may soon become more routine. Ready to charge?

Group Activities and Discussion Questions:

1. Discuss the importance of clearly defining a target market.
2. View the car on Tesla’s Web site: http://www.teslamotors.com/
3. Show a video of the car in action:

https://youtu.be/WVleMIl12s0

4. Divide students into teams and have each team develop a profile of a target market for this car. Include demographics, psychographics, behaviors, values, attitudes, etc.
5. Based on the target market profile, what makes this product unique for these customers?
6. Debrief the exercise.

Source: New York Times, Minneapolis Star Tribune, The Verge, other news sources