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JMC 436

Tesla Inc. Research Outline

Research Question

Are consumers willing to buy electric cars? Specifically, Tesla Inc.’s electric cars, the

Model S, Model X, and Model 3.

Literature Review

Electric cars have been in the automobile market for years now but have had much fewer

sales than gas cars. Making the switch to something unknown has stopped consumers from

purchasing an electric car. Many of the biggest automobile manufacturers have one electric car

or alternative fuel car in their catalogue of cars. Tesla Inc. only manufactures electric cars. Tesla

Inc. cars are what differentiates it from other automobile manufacturing corporations.

Electric car sales have been steadily rising since 2010 but have jumped in 2018 to a new

all time high. Tesla Inc.’s Model 3 has been at the top of sales for all of 2018. The Toyota Prius

Prime trails the Model 3 followed by Tesla’s Model S and then the Model X. (Monthly Plug-In

Sales Scorecard, 2018)

Tesla Inc.’s market in the long-term has been sportier and more expensive. Tesla has

defined itself as a luxury car company, though they have been making their newer models less

sporty and more practical for a wider consumer base. “In this market the Model S is price

competitive and has strong core and ancillary attributes compared with these vehicles.” (Scott

Hardman, 2015) This shows they are trying to be seen as a company that can sell to all

consumers.
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Electric cars have very little differences to a gas-powered car. “Fueling with electricity

offers some advantages not available in conventional internal combustion engine vehicles.

Because electric motors react quickly, EVs are very responsive and have very good torque.”

(Office of Energy Efficiency & Renewable Energy, n.d.) With electric cars there is no need to go

to a gas station once a week, anywhere there is an electric grid and electric car can be fueled.

Maintenance is easier with an electric car as well. “There is relatively little servicing and no

expensive exhaust systems, starter motors, fuel injection systems, radiators and many other parts

that aren’t needed in an EV. [Electronic Vehicle]” (Benefits of Electronic Vehicles, n.d.)

Methodology

We want a general consensus about the feelings for electric cars among automobile

consumers. The end goal would be to understand what non-Tesla consumers look for when

buying a car and how we should tailor the Model S, Model X and Model 3 car and their

marketing to better sell to consumers. Twelve focus groups will be held to collect qualitative data

on the consumer feelings towards electric cars. We want specific feelings and thoughts that are

detailed so that we can have a deeper understanding of what a consumer wants in a car.

Each focus group would have approximately 14-16 people to allow for a diverse

marketplace of ideas to be built during the discussion. Participants need to currently own a car

and have bought it within the last 3 years. Participants will be from major U.S. cites in different

regions. Seattle, Los Angeles, Denver, Houston, St. Louis, Chicago, New York City, Miami and

Oklahoma City. People in different regions have different needs from the cars they buy. By
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doing focus groups based out of the different regions of the United States, we can build

marketing plans around what consumers in that area know and are familiar with.

Experts focus groups of mechanics, car bloggers and specialists in clean energy and

alternative fuel will be held in Los Angeles, Houston, and New York City. This is to collect

information about what they have seen with customers and people who actively participate in the

market. Their perspective will help assuage concerns they have and have heard from their

networks about electric cars.

We might have to rely on an outside agency to find the right amount of people with the

demographic we’re looking for that are outside our normal consumers, though the groups should

be fairly similar except for the regions where they live. We want to try to be able to market our

luxury vehicles to a wider middle-class audience. We will be looking to have participants who

consider themselves middle class. We want people whose households make between $50,000 to

$150,000 annually. Participants will be from all genders, education levels, ethnic and socio-

political backgrounds. Tesla Inc. is a luxury car company, but we want to sell to a larger

consumer audience. We want to market to urban societies and rural and know what the

differences needed for successful marketing will be.

Research Instrument

Main component will be several focus groups, with 3 focus groups of people who have more

1. What car do you drive currently?

a. How old is it?

b. How many miles per gallon does the car get?

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c. How often do you buy gas in a month?

d. How often do you buy a car to replace your current car?

e. Do you buy new or used?

2. Other than a means of transportation, what is the most important function a car has?

a. How many passengers are you normally carrying in a car?

b. How important is storage space in your car?

c. Do you use navigation systems built in your car or do you use an alternative

navigation system? (Map, phone, GPS)

d. What are you listening to in the car? (Nothing, CD player, Aux cord hook up,

Bluetooth, radio, Sirius XM)

e. Do you think it is easy to have your cell phone functions as a function of the car?

(Bluetooth calling, text message reading/reply)

i. Is it helpful or distracting?

ii. Is it easy to set up?

3. How important is the aesthetic look of a car to you? (Scale of 1-5)

a. How much does the interior aesthetic of a car matter to you?

b. What color is your current car?

i. If you could change it what color would it be? (Or are you happy with

it?)

c. Do you have a preference of upholstery? (Leather, Cloth fabric)

d. Does aesthetic (interior/exterior) affect your willingness to buy?

4. What is the most important thing you want to know about a car before you go to buy it?
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a. How long do you spend researching about a car before you buy it?

b. How much do safety test ratings affect your willingness to buy?

c. What other things do you want to know about a car before you buy it?

5. What factors outside of the car itself would prevent you from buying from a certain

automobile manufacturer?

a. What outside factors might persuade you to buy from a certain automobile

manufacturer?

b. What effect does company reputation have on your willingness to buy a car?

c. Does seeing the CEO of a company be heavily involved in social media and other

projects outside of the company effect your willingness to buy a product from

said company?

i. As subtly as possible probe for reactions to Elon Musk’s many

escapades in the media recently.

6. Do you think electric cars work as well as gas cars do?

a. Does an electric car go as fast as a gas car?

b. What differences between an electric car and a gas car are you most interested by?

c. What would convince you to switch from a gas car to an electric car?

d. What is holding you back from switching from a gas car to electric?

7. Do you have any fears about electric cars that might not exist with gas cars?

a. What are some fears you have about gas cars that might not exist with an electric

car?

b. Talk about what safeguards are in place if a battery runs out.

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c. What would prevent you from buying a car electric?

Focus group of experts

8. How often do you see electric cars being talked about?

a. Is there a positive or negative sentiment to the comments?

b. What about an electric car is being talked about?

c. How curious are people? How interested are people?

9. Is there any kind of shift in the market towards alternate fuel cars?

a. Are more being seen?

b. Have you seen people go from an electric car back to a gas car?

c. Are people nervous about switching to an electric car?

i. What are their concerns?

10. What things do you recommend when advising a consumer about buying a car?

a. What is talked about most?

i. Safety?

ii. Speed?

iii. Luxury?

iv. Durability?

Reflection

Public perception is key in moving forward with the marketing of Tesla Inc.’s cars. This

research is meant to give Tesla a direction to take future marketing campaigns. A lack of

incentives for participating could provide trouble, however it could also weed out participants
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who are less passionate about electric cars. Those who have strong opinions will not need an

incentive to give detailed responses to our questions. The data will be hard to sift through and the

nature of focus groups allows for the discussion to veer off topic which will cause problems in

analyzing data. The specificity of the data will help Tesla strategize in the future. External

messaging will rely on the data pulled from these focus groups to inform consumers about the

benefits of an electric car and the benefit of choosing to buy an electric car from Tesla Inc.

The investigation of Tesla’s reputation is in order to learn the readiness of which

consumers are willing to buy electric cars. Creating a positive public opinion of Tesla Inc. in the

press by answering questions that come up in the focus groups is part of the external message

this data can send. In order to make plans to successfully market Tesla Inc.’s electric cars, the

Model S, Model X, and Model 3 to a wider and more diverse audience it is necessary to

investigate what the public already thinks of electric cars. Anything said in the focus groups that

Tesla is already doing can also be something that becomes a key marketing point. Tesla can clear

up any concerns with electric cars through these campaigns. We want Tesla Inc. to be considered

a pioneer in the electric car market. They have an ability to lead the field of electric cars because

they exclusively sell those models. Understanding this data will solidify Tesla Inc.’s reputation

as a leader in this field and help them sell to a larger market.

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Works Cited

Benefits of Electronic Vehicles . (n.d.). Retrieved from Ergon:

https://www.ergon.com.au/network/smarter-energy/electric-vehicles/benefits-of-electric-

vehicles

Monthly Plug-In Sales Scorecard. (2018, October). Retrieved from Inside EVs:

https://insideevs.com/monthly-plug-in-sales-scorecard/

Office of Energy Efficiency & Renewable Energy. (n.d.). Electric Vehicle Benefits. Retrieved

from Office of Energy Efficiency & Renewable Energy:

https://www.energy.gov/eere/electricvehicles/electric-vehicle-benefits

Scott Hardman, E. S.-W. (2015, January 30). Changing the fate of Fuel Cell Vehicles: Can

lessons be learnt from Tesla Motors? International Journal of Hydrogen Energy , 40(4),

1625-1638.