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Tesla took a unique approach to
establish itself in the
market and create value.
Instead of trying to build
a relatively affordable car
that it could
mass-produce and market,
it took the opposite approach,
focusing instead on
creating a compelling car
that would create a demand
for electric vehicles.
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In a post on Tesla's website,
CEO Elon Musk said this
about the company's mission.
"If we could have mass-marketed
our first product,
we would have.
But that was simply
impossible to achieve
for a startup company that
had never built a car,
and that had one
technology iteration
and no economies of scale.
Our first product was
going to be expensive,
no matter what it looked like,
so we decided to
build a sports car,
as that seemed like it had
the best chance of being
competitive with its
gasoline alternatives."
Tesla delivered to the market
the first high-performance
electric luxury sports car,
the Tesla Roadster.
The company sold
approximately 2500 Roadsters
before ending production
in January 2012.
According to S&P Global,
Tesla has benefited from being
the first mover for many years.
In January 2019,
Tesla owned the growing
luxury EV segment,
a meager 326000 units from
a $17 million total
US vehicle market.
The only luxury electrified
competitions at the
time were the BMW i3,
Jaguar i-Pace, and Audi e-tron.
In subsequent years,
even as more competing
luxury EVs came to market,
Tesla's market share
continued to grow.
Tesla's share of total
luxury vehicle registration
was 29% as of September 2023,
a 19 percentage-point increase
over the four-year time span.
Prior to that, the non-Tesla
luxury EV market barely made
a mark at 1% to 2% share of
luxury vehicle registrations.
However, starting in 2022,
that share started to grow
with each successive quarter.
To create value for
their own clientele interested
in the EV offerings,
Legacy luxury brands have
brought offerings like
the Porsche Taycan;
BMW i4 and iX; Mercedes-Benz
EQS, EQE, and EQB;
the expansion of
the Audi e-tron lineup and
Volvo's Recharge line.
The new arrival
disruptor brands include
Polestar, Lucid, Fisker,
and mostly Rivian,
that have also made an impact
among non-Tesla brands.
This has allowed
top luxury brands
to increase their
value offerings to
their loyal brand followers
and not lose them
to rival brands like
Tesla without a fight.
