Competition Heats Up For Tesla In EV Market
Look at competition today in the automobile, airline, and even clothes industries. The word “Competition” can bring out the best or the worst in an organization. Microsoft was had legal charges brought against them years ago for attempting to eliminate competition and even monopolize the market. When organizations focus strongly on current competition, new organizations slowly begin to slip into the industry. This was the case many years ago with the Big Three (Chrysler, Ford, and GM). They were very focused on each other and really did not pay attention to Toyota. Now, according to US News, the top four wealthiest automakers are Toyota ($214 Billon), Volkswagen ($101 Billon), Daimler (Mercedes-Benz) ($84.3 Billon), and BWM ($71. Billion). The Big Three has dropped tremendously; GM is ranked sixth ($52.9 Billion), Ford is eighth ($44.1 Billon), and Fiat Chrysler is tenth ($36.6 Billon). When new companies begin coming into the market, this can create many problems with competition. In fact, Michael Porter sees this as a very powerful source. Now, Tesla is now beginning to make a great deal of noise in the world of competition.
Consider the following article: Competition Heats Up For Tesla In EV Market
1. https://www.forbes.com/sites/mikepatton/2022/03/30/competition-heats-up-for-tesla-in-ev-market/?sh=4abe7ed93423 Based on the article, it seems within the last few years, Tesla has entered the market with a bang. Based on the article and chapter one, they are now facing some competition, but seem to do well continually. Besides being first to the market, what does Tesla do to attract customers?
Chapter 6
Consider the readings from the text and the power points from Chapter Six in answering questions two and three.
2. In slide 24, it documents CEO pay of the top executive in various industries. Select one of the CEO’s from the slide, conduct some research on your chosen CEO and the company where they are CEO, and then explain if they are worth the amount they earn. Please validate your answer based on the performance of the organization.
3. In slide 25, successful diversity recruiting is the topic. The slide provides five successful keys to conducting this activity. For number three, your job is to add one more key that you feel is imperative for diversity recruiting to be successful. Conduct research outside the text in determining your additional successful key. Validate your answer
Chapter 7
4. Read the following article https://hackernoon.com/jeff-bezos-ceo-amazon-explains-his-business-model-to-shareholders-80228d4e9233 about Amazon and Jeff Bezos (sorry about the ads) and Chapter Seven. After reading both of these sources, what was Bezos’ model, and what was the culture of the organization at Amazon?
(Article for Question One) Competition Heats Up For Tesla In EV Market
Mike Patton
Mar 30, 2022,04:55pm EDT
Globally, there are approximately 1.2 to 1.3 billion cars on the road, which includes about 60 million electric vehicles. Thus, the market share of EVs is low, but it’s early. Tesla is clearly the pioneer in the design, manufacturing, and sale of electric vehicles. Tesla sold its first EV, the Roadster, in 2008. In the early days, the cost to purchase an EV was prohibitive for the general public. However, with improvements in technology, lower-priced models have been introduced and the barrier to entry is considerably lower. Which companies have the greatest market share in the EV space? Will EV prices reach parity with the cost of internal combustion vehicles? Will the internal combustion engine become extinct?
Global EV Market Share
Tesla leads all others, selling slightly over 936,000 units in 2021. This gave the company a market share of nearly 14%. Close behind Tesla was the VW Group, with just over 11% of the market last year. Chinese-based BYD was third (9%); followed by GM (7.6%); Stellantis, an Amsterdam-based company (6%); Hyundai Motor (5%); and BMW Group (4.8%). Mercedes and Toyota were in the top 12. Ford was noticeably absent.
Which countries have the largest EV market? According to the Bloomberg Electric Vehicle Index Country Breakdown, China has the largest market for EVs at 34%, followed by the U.S. (28%), and Germany (11%). Asia is leading the transformation to EVs, followed by Europe and the U.S.
Catalysts for EV Growth
Several governments have offered incentives for buyers of EVs. These incentives included, among others, tax credits and lower interest rates on EV loans. However, many of these incentives are coming to an end. According to Anthony Sassine, CFA, Senior Investment Strategist with KraneShares Funds, it is more difficult to register a traditional internal combustion engine in China than an electric vehicle.
What motivates buyers of EVs? The strongest motivation for buying an EV is environmental. The second leading reason is the design and technology of EVs. The result? In Norway, 75% of the cars sold last year were EVs. In fact, the government of Norway plans to completely phase out internal combustion vehicles by 2025. In 2021, 28% of all cars sold in Europe were EVs.
Charging stations are a necessity for full adoption of EVs. China again leads the way with approximately 800,000 public charging stations. The United States has just under 100,000. The Netherlands, South Korea, and France round out the top five.
How far can you drive in an EV? That depends largely on the type of battery. Tesla began with a nickel-based battery, which offers a longer distance, greater reliability, but costs the most. Others, such as the lithium-ion battery are less expensive but have a shorter range. The Tesla Model S has the longest distance rating but will cost $100,000 or more. Thus, the cost of a long-range EV is considerable.
Will the cost of EVs reach parity with internal combustion vehicles? KraneShares Anthony Sassine says they are close to parity now. He also believes EVs will completely replace internal combustion engines at some point.
Electric vehicles are an undeniable trend. During the coming years, expect to witness an historic transition from internal combustion to electric vehicles. However, there are many questions yet to be answered. Will countries build the needed infrastructure (ex: public charging stations) to catch up to the demand for EVs? What happens if the electric grid becomes overtaxed? Will hackers target the power grid leading to an increase in cybercrime? Despite the questions, EVs are clearly here to stay. At least for the foreseeable future.
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