In this edition of the business models of technology companies I’m talking about the Tesla business model using the business model canvas.
In the video I use the Tesla business model canvas to show who it’s key customers are and the value proposition it offers them. I describe how Tesla communicates with its customers and it’s key marketing and distribution channels. Finally I cover how Tesla monetises it’s business model.
How does Tesla deliver value to customers? I then look at the infrastructure side of the Tesla Business Model Canvas to show how it uses key resources to deliver the key activities that are required to manufacture its cars and the partnerships that it needs to do this. Finally I look at how much this all costs.
The Tesla Business Model
The way it works is that Tesla offers an electric high technology car to people who are concerned about the environment and the cost of petrol (or gas if you are from the US).
The high technology component of Tesla solves a number of problems. It provides status in a way that is quite different to traditional internal combustion cars. It also provides a far more interesting mobility experience that is a step away from the petrol driver having to control his car every second of the drive. The Tesla driver can relax and let the autopilot do the heavy lifting.
To deliver this Tesla has a huge factory making the electric batteries and also a heavily automated factory that assembles the cars. It also has network of car chargers and it’s own fully owned sales centres.
These differ from the traditional car industry model which sells dealership franchises. You don’t buy a car from Ford. Your buy a car from a Ford dealership.
The Tesla business model breaks that. This difference allows Tesla to be far closer to its customers and control the whole value chain. Tesla is vertically integrated in a way that traditional car companies have not been for generations.