Tesla’s approach was strikingly different. Despite this lead, Nissan failed to provide a robust fast-charging network which left buyers relying on a small number of third-party stations available to all brands. Nissan, with the zippy and relatively affordable Leaf, stole an early lead in the EV market, and was the best-selling electric car from 2011 to 2014. How did this happen and what can Tesla’s history teach us? Platforms need networks Tesla has such a network, and everyone else’s is laughable. But, investments in building a massive charging network make sense only if there is a large enough user base and demand for these chargers. ![]() Selling electric cars requires a robust charging network. Unless you buy a Tesla, you have few options for reliable route planning, guaranteed access, and rapid public charging.Īn electric car, therefore, is a two-sided platform good, the two sides being an installed base of car buyers and a large network of geographically dispersed multi-stall rapid-charging stations. The next largest network, compared to Tesla, is only 10% as large. Moreover, the network of available charging stations is highly fractured across ownership and technology. “Refueling stations” - i.e., rapid charging facilities - for electric vehicles are in their infancy, with only about 4,000 available in the United States. Build a great car (or truck), advertise it heavily, offer it in the right markets at a good price, and the product will sell.Īn electric car, however, requires a different value analysis. They have therefore built their strategies around standard marketing variables: product, price, placement, promotion. Automakers of gasoline cars or trucks do not have to worry about this, as refueling stations are abundant - over 160,000 stations are in the United States alone - and easily accessible. The car as platformĪ car creates value to its owner when it is driven, which requires refueling. While the incumbent automakers are still focused narrowly on perfecting their electric cars, Tesla has been thinking about the entire vehicle system, with the aim of solving consumers’ core driving needs. They can drive their Teslas for long distances in full confidence that they will find convenient locations at which to recharge their vehicle. The reason why consumers still choose Teslas over products like Audi’s eTron or attractive EVs from GM’s Buick, Cadillac, GMC, and Chevy brands is perhaps surprisingly simple. This is surprising since one might reasonably have expected that once firms with annual revenues in excess of $100B, deep manufacturing expertise, and large market shares turned their attention to the electric vehicle market, the game would be up. Yet, despite investments that add up to many billions of dollars, none of the major incumbent automakers seems to pose much of a threat to market leader Tesla, which has become nearly synonymous with EVs. They are not alone Bloomberg New Energy Finance predicts that 500 different EV models will be available globally by 2022. ![]() In the same year GM went public with plans to put at least 20 new electric models on the road by 2023. The Volkswagen Group in 2017 announced that they would offer 80 new electric vehicles across their brands by 2025 and electric versions of every one of its models by 2030. Over the past five years, the major auto companies have invested massively in electric vehicles (EVs).
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