Tesla Motors Inc.

Catherine Khieu
Rafay Qureshi
Ismail Ashraf
Amy Cho
Hasan Quadri
Farid Ijazi
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Marketing Plan
Tesla, Inc.

Table of Contents

1. Executive Summary.1
2. Company Description1-2
3. Strategic Focus and Plan..2
3.1. Mission...2
3.2. Goals.2
3.3. Core Competencies.2-3
4. Situation Analysis.3
4.1. SWOT Analysis...3
5. Market-Product Focus...4
5.1. Marketing and Product Objectives.4
5.2. Target Markets...4
5.3. Points of Difference.....4
5.4. Positioning4
6. Marketing Program.5
6.1. Product...5
6.2. Price..5
6.3. Promotion.5
6.4. Place.....5
7. Financial Data and Projections....5
7.1. Figure 1. Teslaa Fiscal Revenue..6
7.2. Income Statements...6-14
8. Organization..14-15
9. Implementation Plan...15
10. Evaluation...16
11. Work Cited.....17
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1. Executive Summary

Tesla is one of the major leaders in the electronic vehicle market. Tesla has shown
that it is always one step ahead of the competition. We always seem to surprise everyone in
many new ways.

Starting off as a luxury vehicle company which was aimed at more the wealthy and
elder aged market, Tesla has now expanded its market to a larger, diverse group by
launching the Model X. The Model X is mainly focused for people who are in search of a
bigger vehicle and are in need more space, who are also concerned with the environment.
Still aimed at the wealthy class, the Model X is starting at $85,000 as the listing price.

Also, Tesla is expanding its market even further, trying to target the middle class
with the Model 3. The Model 3 is our most affordable model yet, starting at a mere $35,000.
What Tesla did with the Model 3 is that we combined real world range, performance, and
luxury into a premium sedan. What this means is, we did not only make an affordable car,
we improved the range the vehicle can travel on a fully charged battery, and without
lowering or compromising the quality of the vehicle. The demand for the Model 3 will be
determined by how well the market for electric vehicles performs. With many companies
such as Toyota and Chevy also coming into the market, this brings more competition to us,
but it also helps increase the market of electric vehicles. The Model 3 is already available
for pre-order, but new reservations will arrive in 2018. This is because the first 12 months
of production have already been sold out. The reason for this is because tesla has already
established itself as a leader in the EV market and owning a tesla is a lot of people's dreams.
And with the model three tesla is doing just that helping people achieve their dreams.

2. Company Description

Tesla was started in 2003 by co-founders Martin Eberhard and Marc Tarpenning,
and most famously, Elon Musk, with the primary focus on energy innovation and proving
that electric vehicles could be better than gasoline-powered vehicles. Tesla headquarters is
located in the city of Palo Alto, California and currently has over two-dozen stores and
galleries worldwide.

In 2008, Teslas engineers developed the companys first vehicle, the Tesla Roadster,
which set a new standard for electric mobility. Tesla would sell more than 2,400 Roadsters,
now on the road in more than 30 countries. In 2012, Tesla launched Model S, the worlds
first premium electric sedan, which was named Motor Trends 2013 Car of the Year and
achieved a 5-star safety rating from the U.S. National Highway Traffic Safety
Administration. Released in 2015 was the Tesla Model X, a full-sized, all-electric, luxury,
crossover SUV. In March 2016, the company unveiled The Model 3, the company's first
model aimed for the mass market, which is expected to be released in 2018.
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Tesla believes its high-quality, yet affordable strategy has proven to be successful.
This marketing plan outlines how the Company has expanded its target market from
wealthy buyers to a larger, more competitive market.

3. Strategic Focus and Plan

Mission
Teslas mission is to offer a compelling customer experience while gathering the
rapid customer feedback and achieving operating efficiencies, better control over the costs
of inventory, warranty, service, pricing, and the development of the Tesla brand.
Goals
Elon Musk has many goals outlined for Tesla outlined in his goals in his two-part
plan starting 10 years ago when he first had the idea of forming an electric car company. In
the first part, one of his goals is to build a sports car referring to the Tesla Roadster and
eventually the Tesla Model S. Afterwards, he plans to use that money to make his Teslas
more affordable. While he is improving the cost of lowering the cost of his Teslas, he also
wants to provide a zero emission power generation options such as solar panels installed
on the owners to charge the Tesla without being on the grid. He has since reached many
of his goals with the Model S being more and more affordable and a cheaper option, the
Model 3, expected to be released in 2018. Also, with the acquisition of Solar City, a solar
roofing company, Tesla is one step closer to providing a zero emission electric power
generation option. As outlined in the second part of Mr. Musks plan, he plans to create
solar roofs with seamlessly integrated battery storage. He also plans to expand the electric
vehicle production to address all major segments Major segments being the different forms
of intra-continental transportation such as shipping, taxi services and owning ones very
own Tesla. Mr. Musk plans to bring electric vehicles to semis, taxis, and personal vehicles.
Along with that, he plans to incorporate the automated feature for all segments. Another
goal Mr. Musk has is to develop a self-driving capability that is 10x safer than manual
driving via massive fleet learning. He plans to have a massive fleet of Teslas simultaneously
communicating with other Teslas to reduce human error and improve coordination of
traffic. Lastly, Elon Musk plans to enable ones Tesla to make money for you when you are
not using it. Elon Musk did some research and said that an average person uses a car for up
to 10 percent a day or about 2.5 hours. The other time it is just sitting in a persons garage
or driveway. Elon Musks goal is to utilize this downtime and have a persons Tesla act as
their automated Uber. This would generate passive income for the owner and would
financially benefit whoever uses the service.
Core Competencies
Tesla is known for their electric vehicles, but what Tesla specializes in or their Core
Competencies are their technology, battery pack system, and their vehicle design. One thing
that sets Tesla apart is their powertrain technology. Since the Tesla is an all-electric vehicle,
their powertrain or the components that generate power and deliver it to the road surface
are far more compact and have less moving parts than an internal combustion/gas vehicle.
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Less moving parts helps reduce maintenance costs and potentially the cost of having to
replace something. Tesla also specializes in their battery pack system. Its design permits
flexibility with respect to the battery chemistry, form factor, and the vendor that Tesla
adopts for battery cell supply. In essence, Tesla is constantly improving their batteries to
increase battery capacity, longevity, and power delivery and to lower cost. Lastly, Tesla
specializes in their vehicle design and simulation. By using Computer Aided Design (CAD)
software and computer simulations decrease testing needed when developing newer
vehicle models. Also, with the difference in power the drive train requires from the lesser
energy components, such as the Heating, Ventilation, and Air Conditioning, radio, power
windows, and heated seats require special integration of its components.

4. Situation Analysis

Tesla was founded in 2003 by Martin Eberhard and Marc Tarpenning. What they
wanted to do with Tesla was to show that electric cars can come into the market and be just
as, if not, better than gasoline cars. Tesla has now made a brand for itself and with CEO,
Elon Musk, he proves that the company can go further than just making great electric cars
to help with the environment. Tesla is different than other brands with their eye appealing
design on their cars, especially since most fully electric or hybrid cars dont put much effort
into design.

SWOT Analysis:

Strengths:
Eco friendly
First fully electric car
The Model S achieved a higher safety rating than any other car

Weaknesses:
High price with a low demand
Small target market
Limited charging stations
Limited manufacturing capability

Opportunities:
Gas prices rising
Self-driven cars
An increase in the awareness of global warming
Environmentalist interest groups

Threats:
Competition from cheaper electric manufacturers
Cars with a higher mpg
Small market
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Fear of new technology

Still a relatively new brand

5. Market-Product Focus

This section describes the marketing and product objectives for Tesla and the target
markets, points of difference, and positioning of its electric vehicle models.

Marketing and Product Objectives

Tesla Motors has no advertising, no ad agency, no CMO, no dealer network, and thats
no problem. Advertising Age
Teslas marketing intent is focusing on generating demand for the vehicles, building
long-term brand awareness, managing corporate reputation and their existing customers
to create loyalty and customer referrals.
Current markets. Current markets will be grown by developing the same high-
quality vehicles at a more affordable price point.
New markets. Tesla will expand to new markets by geographically placing buying
centers in cities with significant traffic in hopes to potentially gain free publicity and
avoid marketing costs.
New products. In addition to Teslas current models, we introduce the Model 3, a
lower-priced sedan, to be manufactured in 2017.

Target Markets
The primary target market for Tesla vehicles is mostly well-employed millennials.
Mostly Baby boomers and Gen-X (Target Age 35-55 Years) who are trendy, average to
upper middle class consumers who are also conscientious of the environment.

Points of Difference
The points of difference --characteristics that make Tesla unique relative to
competitors--fall into three important areas:
Unique design and eco-friendly. No known competitor offers a luxury, fully electric
car/SUV.
Direct Sales. Unlike other car manufacturers who sell cars through dealerships,
Tesla uses direct sales by creating an international network of company-owned
showrooms and galleries, mostly in prominent urban centers around the world.
Supercharger network. Tesla has created its own network of Supercharger stations
where drivers can charge their Tesla vehicles for free of charge.

Positioning
In the past, Tesla products were considered high-end and high-priced electric
vehicles. Tesla will position itself as the leading fully electric vehicle in an affordable mid-
range price arena, without compromising the sleek style, performance, and overall
customer experience.
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6. Marketing Program

Currently, Tesla has manufactured and sold three vehicles into the market (Roadster,
Model S, and Model X), with the Model 3 on its way. Tesla is trying to reach out to more
consumers and expand their market to a wide range. As of now, most people see the brand
and think that it is mainly for people who either care about the environment, or just want a
luxury sedan, but with the Model 3 coming out, this opens a gate for a larger target market,
more for the common middle class consumer and not the wealthy.

Product:
Roadster
Model S
Model X
Model 3

Price:
Roadster - $100,000
Model S - $90,000 - $140,000
Model X - $95,000 - $120,000
Model 3 - $35,000

Promotion:
Tesla does not specifically have a marketing budget (absolutely no advertising)
Teslas loyal customers help spread out the word (mainly through social media)
Quality of their products makes people want to desire it more

Place:
Direct channel: manufacturer deals directly with the consumer
No lots/dealerships where consumers can buy a Tesla vehicle
Build your own Tesla online, itll be ready at the nearest service center
A different approach and cutting out any middlemen in the process of buying a car

7. Financial Data and Projections

Figure 7.1 below shows Tesla Motor's revenue from the fiscal year of 2008 to the fiscal year of 2016
grew from under 14.8 million U.S. dollars in the fiscal year of 2008 to around 14 billion U.S. dollars
in the fiscal year of 2016, which proves that Tesla continues to rapidly expand.
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Figure 7.1. Tesla's revenue from Fiscal Year 2008 to Fiscal Year 2016 (in million U.S. dollars)

The following Income Statement, Cash Flow Statement, and Balance Sheet are from Yahoo Finance
(Yahoo Finance Tesla Inc.).

Income Statement
All numbers in thousands

Revenue 12/31/2016 12/31/2015 12/31/2014

Total Revenue 7,000,132 4,046,025 3,198,356

Cost of Revenue 5,400,875 3,122,522 2,316,685

Gross Profit 1,599,257 923,503 881,671

Operating Expenses

Research Development 834,408 717,900 464,700

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Selling General and Administrative 1,432,189 922,232 603,660

Non Recurring - - -

Others - - -

Total Operating Expenses - - -

Operating Income or Loss -667,340 -716,629 -186,689

Income from Continuing Operations

Total Other Income/Expenses Net 119,802 -40,144 2,939

Earnings Before Interest and Taxes -547,538 -756,773 -183,750

Interest Expense 198,810 118,851 100,886

Income Before Tax -746,348 -875,624 -284,636

Income Tax Expense 26,698 13,039 9,404

Minority Interest 785,175 785,175 785,175

Net Income From Continuing Ops -674,914 -888,663 -294,040

Non-recurring Events

Discontinued Operations - - -

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income
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Net Income -674,914 -888,663 -294,040

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common -674,914 -888,663 -294,040

Shares

Cash Flow
All numbers in thousands

Period Ending 12/31/2016 12/31/2015 12/31/2014

Net Income -674,914 -888,663 -294,040

Operating Activities, Cash Flows Provided By or Used In

Depreciation 1,034,385 494,653 301,665

Adjustments To Net Income 308,693 362,800 191,863

Changes In Accounts Receivables -213,097 46,267 -183,658

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Changes In Liabilities 1,980,954 1,088,261 1,042,227

Changes In Inventories -2,465,703 -1,573,860 -1,050,264

Changes In Other Operating Activities 3,985 -53,957 -65,130

Total Cash Flow From Operating Activities -123,829 -524,499 -57,337

Investing Activities, Cash Flows Provided By or Used In

Capital Expenditures -1,440,471 -1,634,850 -969,885

Investments 16,667 16,667 -16,710

Other Cash flows from Investing Activities 7,374 -38,701 -3,849

Total Cash Flows From Investing Activities -1,416,430 -1,673,551 -990,444

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Financing Activities, Cash Flows Provided By or Used In

Dividends Paid -21,250 -21,250 -21,250

Sale Purchase of Stock 2,067,078 856,611 489,615

Net Borrowings 1,718,190 683,937 2,292,092

Other Cash Flows from Financing Activities - - -

Total Cash Flows From Financing Activities 3,743,976 1,523,523 2,143,130

Effect Of Exchange Rate Changes -7,409 -34,278 -35,525

Change In Cash and Cash Equivalents 2,196,308 -708,805 1,059,824

Balance Sheet
All numbers in thousands
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Period Ending 12/31/2016 12/31/2015 12/31/2014

Current Assets

Cash And Cash Equivalents 3,498,735 1,219,536 1,923,660

Short Term Investments - - -

Net Receivables 499,142 168,965 226,604

Inventory 2,067,454 1,277,838 953,675

Other Current Assets 194,465 115,667 76,134

Total Current Assets 6,259,796 2,782,006 3,180,073

Long Term Investments 506,302 506,302 506,302

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Property Plant and Equipment 9,117,037 5,194,737 2,596,011

Goodwill - - -

Intangible Assets 376,145 12,816 12,816

Accumulated Amortization - - -

Other Assets 6,404,796 78,380 54,583

Deferred Long Term Asset Charges - - -

Total Assets 22,664,076 8,067,939 5,830,667

Current Liabilities

Accounts Payable 3,070,369 1,338,946 1,046,829

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Short/Current Long Term Debt 1,150,147 627,927 611,099

Other Current Liabilities 1,606,489 844,162 449,238

Total Current Liabilities 5,827,005 2,811,035 2,107,166

Long Term Debt 5,969,500 2,021,093 1,818,785

Other Liabilities 4,101,872 1,658,717 642,539

Deferred Long Term Liability Charges 851,790 446,105 292,271

Minority Interest 785,175 785,175 785,175

Negative Goodwill - - -

Total Liabilities 17,535,342 6,936,950 4,860,761

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Stockholders' Equity

Misc. Stocks Options Warrants 375,823 47,285 58,196

Redeemable Preferred Stock - - -

Preferred Stock - - -

Common Stock 161 131 126

Retained Earnings -2,997,237 -2,322,323 -1,433,660

Treasury Stock - - -

Capital Surplus 7,773,727 3,409,452 2,345,266

Other Stockholder Equity -23,740 -3,556 -22

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Total Stockholder Equity 4,752,911 1,083,704 911,710

Net Tangible Assets 4,376,766 1,070,888 911,710

8. Organization

Tesla has a functional organizational structure that supports continuous business growth.
Global hierarchy, global centralization, as well as minimal regional divisions are all
fundamental characteristics of Teslas organizational structure.

One great advantage of Telas organization is how it benefits from a global net. It has few
countries its reached out to so the control over their market is good. Another advantage is
the ease of implementing new strategies throughout the organization because of the size.
Also, the minimal regional divisions support not just financial reporting and analysis, but
also possible future regionalization of strategies and tactics in the automotive business.
These advantages empower Tesla to use its organizational structure for further
international growth.

However, a disadvantage of Teslas corporate structure is the rigidity that limits rapid
adjustment in the organization. Tesla isnt capable of adapting too quickly because of costs
and how new it is. For a company such as Tesla, it would need to grow its business first
and establish what it has and take the Shareholders for a ride. For example, global
centralization is a structural characteristic that limits the ability of overseas offices to
readily respond to issues they experience in their respective regional markets. To address
this disadvantage, Tesla can reform its organizational structure to increase the level of
autonomy of overseas offices. Also, an organizational structure with a higher degree of
decentralization tends to be more effective in creating well adjusted products to suit the
customers at hand.
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9. Implementation Plan

To address our weaknesses, Tesla will implement a plan according to the well prospect
future of tesla and the current market to appeal to them and fix their cars. While we are a
relatively diversified and spread out company we arent spread out too thinly. One of our
major weaknesses it the value of our energy plan and how Tesla cars will revolutionize the
world. So after we mediate our losses with our research and pacify our huge debt we can
move onto greater things.

As we accumulate more demand and our model 3 sells really well, well move onto the next
phase. First we need to build momentum from our large debt scaring shareholders to back
off.

We plan to release more models, but we need to completely solve our bugs problem with
our current cars.

Due to how our organization is structured and very decentralized it will be difficult to
implement changes as effective as possible. Tesla is spread out. So in order to balance that
Tesla should just focus on the markets locally. At the same time take into consideration
what the entirety of the company is like it will grow.

Well take an iron hammer and force it upon the earth

Continue promotion of driverless cars and make people realize how cool that would be if
that could happen. A clean environment and huge first step to a safer and cleaner world in
harmony with nature. Tesla can start to promote what their future plans are to hype up the
world and make everyone interested how the world will be.

10. Evaluation

While Tesla is new relatively. It has tons of potential to grow. It had a great start and its
picking up more momentum as model 3 is around the corner. While the debt is high and
shareholders might be at risk. The vision and direction tesla is going is unlike many
companies out there. It has a seemingly genuine motive to better the world and to shine. So
far very little to complain about tesla because while it being a new company with its minor
hiccups and hurdles it has managed to be in the game and still picking up momentum and
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love from the public. Tesla already has an amazing PR without even doing anything. The
idea and focus will propel Tesla to greater heights.

Tesla has a lot of unspoken promises that many believe will happen. Just from the track
record from breaking the safety ratings and extremely fast speeds. Tesla as an organization
has lots to improve on with the decentralized system it has running it may do harm in the
long run.

Some Fallacies, the locations are limited to sell Tesla, its also difficult to buy one with its
poor financing plans. Also the risk of being new unfinished technology is pretty high. Very
few reviews and dissatisfaction can greatly harm Tesla. The locations are limited because
you need to have charging stations near you to safely drive places. And you would need a
certified mechanic to deal with your car with the high learn ratio. There are a lot of risks
and possibilities.
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WORK CITED

Baker, David R. 8 States Sign Deal to Boost Electric-car Sales. SFGate. SFGate, 24 Oct.

2013. Web. 20 March 2017

Daily Guel Gauge Report. Daily Fuel Gauge Report. AAA, 31 Oct. 2013. Web. 21 March

2017

The New York Times Media Kit. The New York Times Media Kit. The New York Times, n.d.

Web. 20 March 2017

Shahan, Zachary.US Electric Car Sales Have Increased 361% In 2013 So Far.

CleanTechnica. Clean Technica, 6 Nov. 2013. Web. 17 March 2017

Tesla. 136 Marketing Music Technology. N.P., n.d. Web. 14 March 2017

"TSLA Income Statement | Balance Sheet | Cash Flow | Tesla, Inc. Stock - Yahoo

Finance."Yahoo! Yahoo!, n.d. Web. 26 Apr. 2017.