Market Analysis: Sale of Solar Panels and Batteries in Tesla Motors

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Market Analysis: Solar Panels and Batteries in Tesla Motors Inc.

Market analysis is an integral component of an effective business plan and successful business, as it helps gather essential and valuable information on a wide range of aspects related to product or service success and decision-making effectiveness. Conducting a market analysis involves data collection on issues such as economic shifts, market trends, demographics, customer expenditure traits, and competitors (Zuzaku, 2015). Data is evaluated quantitatively and qualitatively, providing vital information on the viability of a business plan, and examining whether the product will potentially cater to customer needs. The report conducts a market analysis on the introduction, design, and sale of solar panels and batteries to electric car owners in Tesla Motor’s Inc.

Business Overview, Mission, and Vision 

Tesla Motors is famous for its design and development of electric vehicles, which have enabled the company, achieve the green strategy, and maximize its sustainability and Corporate Social Responsibility. According to the triple down theory, it is the mandate of the business to ensure Planet-People safety and customer satisfaction while harnessing Profits. Electric vehicles are widely used globally; however, it has become expensive and difficult for some customers and owners to charge their cars due to the limited number of charging and service stations  (Tonachel, 2015). The challenge has resulted in decreased sales and a general drop in Tesla’s revenue and profit margins. To address this problem, the proposed product idea is developing solar panels and batteries to be used as possible solutions. Solar batteries and panels will assist in charging electric vehicles from home or while on the road and not worrying about finding public charging stations. Moreover, solar energy will help reduce electricity bills and is clean energy, hence becoming a win-win situation for Tesla (sustainable green strategy and increased sales) and customers (reduced expenses and eased charging difficulties).

Mission and Vision Statements 

Mission statement guiding Tesla’s states ‘accelerate the world’s transition to sustainable energy’, while the vision states, ‘to create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles’ (www.tesla.com., 2020). These statements align with the proposed business idea. Through solar panels and batteries, the mission of energy sustainability and vision of global transitioning to electric vehicles is achieved and facilitated.

Target Market and Business Model 

The intended market includes electric car owners globally. The intended plan for successful business operations and customer reaching will involve both direct and online sales. Direct sales will consist of using Tesla’s showrooms and stores and collaborating with charging station companies and other motor companies such as Ford and GM. Online sales will involve selling products through Tesla’s website, which is a more natural way to reach a more extensive customer base.

Market Analysis 

As a business market, the product market will be categorized into four categories: car type, geography, battery type, and solar panel type. Below are characteristics of the intended customer base  (Almuzel, 2018).

Market segmentation	Description
Demographic/Psychographic	·         Electric car owners who can or cannot afford continuous electric charging or cannot access charging stations easily ·         Wealthy people in urban and uptown areas ·         Highly educated, professionally employed, with upper-middle-income and plus
Market	·         EV car type ·         Battery type ·         Region ·         Solar panel type
Geography	·         North America ·         Europe ·         Asia
Geo-demographic	·         Urban/Uptown area ·         Areas with a continuous supply of wireless technology ·         Areas with people driving EVs

 

Competitor Analysis

Possible significant competitors include Ford Motors and Volkswagen, as they design electric vehicles. In contrast, competitors on the design and sale of solar panels and batteries include Fluence Energy (AES), China BYD, and NEC Energy Solutions  (General, 2018).

Market Size Estimation

Market size includes the projected number of potential customers as well as product unit sales. Tesla Motors Inc. operates in the automotive, energy storage and production industries. Hence, the production of solar panels and batteries will be conducted in the company, making it a manufacturing business in nature. The intended market is extended in terms of EV car owners and four regions with customers using EV vehicles. Solar panels and batteries will be produced in alignment with customer size and an increment of 50% more products to be sold to other actors and partners. Therefore, according to Tesla’s EV sales in 2019 statistics, units sold of all EV types were approximately 775,000 globally (Wagner, 2020). Thus, the estimated market size and product unit sales are 775,000.

Market Value 

Market value helps identify potential revenues expected from the market, which is essential for effective decision-making on the plausibility and viability of the proposed idea. Assumptions in this estimation include market size/unit products and the average price of solar panels and batteries. In this case, the product used is an AC/DC battery of 10/kWh, which is $7,000. The market value is $5,425,000,000.

Expected Market Value: Solar Panel and Batteries in Tesla Motors Inc.
Assumptions	Probability	Units (‘000)	Average Price	Market Value
Pessimistic	0.3	468,345	6,950	$3,255,000,000
Most Likely	0.5	775,000	7,000	$5,425,000,000
Optimistic	0.2	776,000	7,050	$5,470,800,000
Total				$4,525,000,000

 

As per the results, the estimated market value is $4,525,000,000. Tesla’s market share in the solar panel and battery market is 2%. Hence, TAM is 0.02 x 4, 525,000,000=$90,500,000, approximately 90.5 million. Based on the data acquired above, the proposed business idea is a good plan as a startup as the TAM and EMV produce profitable projections as per the market size. Going onwards, TAM is expected to rise as market share and market size increases.

 

 

References

Almuzel, M. G. (2018). Tesla Solar Roof Marketing Plan. Engineering and Technology Management Student Projects, 1-47.

Tonachel, L. (2015, September 17). Study: Electric Vehicles Can Dramatically Reduce Carbon Pollution from Transportation, and Improve Air Quality. Retrieved from NRDC: https://www.nrdc.org/experts/luke-tonachel/study-electric-vehicles-can-dramatically-red

Wagner, I. (2020, February 12). Electric vehicle sales – globally by model 2019. Retrieved from Statista: https://www.statista.com/statistics/960121/sales-of-all-electric-vehicles-worldwide-by-model/

www.tesla.com. (2020, April 12). Tesla’s mission is to accelerate the world’s transition to sustainable energy. Retrieved from https://www.tesla.com/about

Zuzaku, A. (2015). The significance of market research to businesses. ADVANCES IN BUSINESS MANAGEMENT. Towards Systemic Approach, Vol 3.

 

 

Assignment Content

Top of Form

Purpose

MBA Business Plan component

 

Context

 

One of the most important elements in a business plan is the market analysis. A market analysis is a qualitative and quantitative assessment of a market. It includes data collection and estimation in reference to the market size and value; characteristics of the intended customer base; in-depth understanding of the competition; barriers to entry and the regulatory environment. An accurate and detailed market analysis allows entrepreneurs to determine whether the market is sufficiently large to build a sustainable, profitable business.

 

Instructions

 

For this assignment, you will prepare a portion of the market analysis for a proposed business of your choice. You will create a report that can be included as part of your digital portfolio.

 

Write a 450- to 600-word report that includes the following sections:

 

• Section 1: Business overview, mission and vision
• Section 2: Market analysis
• Section 3: Recommendation

 

Use the Market Analysis Research document for details on what to include in each section.

 

Format your assignment consistent with APA format with at least one (1) scholarly, peer-reviewed reference and one reference from the assigned readings (textbook).

 

Please Include:

• An Introduction paragraph (Do Not Write the word Introduction to begin the body of the paper – Use the title of the paper instead). There should be a thesis statement in the introduction paragraph.
• At least two (2) Level One Headings
• Conclusion Heading.

 

Submit your assignment.

 

Resources

 

DAT 565 Market Analysis Research Grading Guide2.doc

 

 

 

 

 

 

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