There is no doubt that Tesla is a company on the rise. When it comes to electric cars, Tesla is the brand that first comes to mind.
With their electric cars and innovative technology, they are changing the face of the automotive industry to become one of the most successful companies in recent history.
But why do people by Tesla? Who is the target market for Tesla and why does the brand appeal to so many people?
In this article, we will explore Tesla’s target market and discuss some of the reasons why they are so successful in this space.
What is an Electric Vehicle?
An Electric Vehicle can be defined as a vehicle that uses one or more electric traction motors for propulsion. Electric Vehicles can be Battery Electric Vehicles (BEV) or Hybrid Electric Vehicles (HEV).
A Battery Electric Vehicle uses a battery pack as its sole source of energy to deliver power to the traction motors. A Hybrid Electric Vehicle uses more than one source of energy. Typically, these are an Internal Combustion Engine and a battery pack.
A very popular Hybrid Electric Vehicle is the Toyota Prius. And a very popular Battery Electric Vehicle is the Tesla Model 3.
Why do people buy Electric Cars?
To understand the Target Market for Tesla we need to first understand the reasons why people prefer an Electric Car over an Internal Combustion Engine car.
There are 5 Key Advantages that motivate people to transition from the traditional Internal Combustion Engine vehicles to some form of Electric Vehicle. These are:
- Lower Emissions
- Health Benefits
- Cost Savings
- Energy Independence and
- Subsidies
A prime motivation for people to switch from fossil fuel-burning IC Engine vehicles to Electric Vehicles is to lower the emissions of harmful gases into the environment.
Data from the World Health Organization shows that in 2016 alone, outdoor air pollution resulted in about 4.2 million premature deaths worldwide.
A big benefit of lower emissions of Electric Vehicles at the point of operation is that EV adoption will help lower pollution in crowded cities.
So a big reason why consumers buy an Electric Vehicle is to do their part to save the environment. In that sense, an EV can be seen as a green product.
In terms of cost savings, an electric car is cheaper to charge than it is to fuel an IC Engine vehicle for the same distance covered. Battery Electric Vehicles also have fewer moving parts than conventional vehicles and so are cheaper to maintain. This also means that they can have a longer life than IC engine vehicles.
Finally, most countries have to import their petroleum from some of the world’s biggest geopolitical hotspots. Several countries, therefore, offer subsidies, tax exceptions, purchase rebates, tax credits, and free charging to get people to switch to electric vehicles.
Who are Tesla’s customers?
(A Psychographic analysis)
When someone buys a Tesla they are buying more than a car. They are usually buying into a dream. They are buying into a vision of a better future.
A Tesla customer is someone who is environmentally conscious, wealthy or at least has the means to afford a luxury car, looking for status and wants to be seen as an early adopter of new technology, interested in cutting-edge design and performance, and willing to pay more for a premium product.
This target market can be further segmented into different psychographic groups. The main ones are:
- Green consumers: These are people who are very environmentally conscious and want to do their bit to save the planet. They are willing to pay more for a green product.
- Early adopters: These are people who like to be the first to try new things. They are usually wealthier and have higher disposable incomes. They are also more likely to be male.
- Status seekers: These are people who want to be seen as successful and affluent. They are willing to pay for a luxury product that will give them status.
- Tech-savvy consumers: These are people who are interested in new technology and like to have the latest gadgets. They are usually younger and have higher incomes.
Understanding the Target Market for Tesla: Why Do People Love a Tesla?
When it comes to buying Electric Cars there are plenty of options on the market. Yet more people are attracted to Tesla than to any other brand. Why is that?
Here are some of the most important reasons why people prefer a Tesla:
- The Brand
- Features & Technology
- Superior Design
- Luxury and Status
- Environmentally Conscious
- Performance & Range
- Charging Stations
1. The Brand
Tesla has one of the most recognizable brands in the world. People who buy a Tesla often do so to associate themselves with the brand. Many find it cool to say “I drive a Tesla”.
So, by owning a Tesla, people are making a statement about themselves and their values. They are saying that they are well to do, they have disposable income, they care about the environment, and they have a taste for luxury – all at the same time.
2. Features & Technology
Tesla cars come with a lot of features that many of the other electric cars do not have. These include all-wheel-drive capability and the ability to use the car’s computer to change settings like the suspension and steering.
A Target Market for Tesla includes tech-savvy people who want the best technology in their car, with a big touch screen on the dashboard for controlling everything from entertainment to the temperature.
Many people like Tesla cars because of their rapid acceleration. All-electric cars have high torque because electric motors reach their peak torque at a low speed. This means they can accelerate extremely fast. For many, there’s nothing like the feeling of quiet acceleration when going from 0 to 60 miles per hour in under two seconds.
3. Superior Design
Until Tesla came around, electric cars had clumsy designs. Tesla’s cars are sleek and futuristic, which is a big draw for many people.
If you drive a Tesla, it seems like you’ve stepped into the future. They require less routine maintenance than traditional cars because they have fewer parts and are simpler to fix. The design of their model is so streamlined that they don’t even use door handles! Their approach is to make the car look as clean and uncluttered as possible.
4. Luxury and Status
Tesla cars are luxurious, and they come with all the bells and whistles you’d expect from a luxury car.
Being seen as a luxury brand is one of the most important factors that make Tesla appealing to customers. People who buy a Tesla not only want a luxury car, but they also want to be seen as being environmentally conscious and cutting-edge. And they’re willing to pay for this privilege.
Tesla cars are expensive, and the price tag of a Tesla makes it unattainable for most. So, when someone has one, they are seen as wealthy and successful. This is appealing to many, making owning a Tesla a status symbol.
5. Environmentally conscious
One of the biggest motivators people have to switch from IC Engine cars to Electric Cars is their concern for the environment and doing what they can to reduce their carbon footprint.
Being the leading Electric Car manufacturer in the world, Tesla benefits from this transition to environmentally friendly alternatives.
So, Tesla’s target market includes people who want to feel like they’re doing something good for the environment, while also enjoying the latest technology and a luxurious lifestyle.
6. Performance & Range
Tesla vehicles outperform most other electric cars in terms of speed and handling. This makes them more fun to drive.
Tesla models can travel for over 400 miles on a single charge. This gives Tesla a bigger range to work with in terms of where it can place recharging stations and Superchargers, which attracts more customers.
7. Charging Stations
Tesla has built over 900 charging stations across the United States, making them accessible to most people who buy one of its cars. They have also made agreements with other electric car companies to allow them to use these stations, increasing the number of people who will have access to Tesla charging stations.
Summary
Electric Cars are becoming extremely popular, and we can envision the day when all IC Engine vehicles are replaced by Electric Vehicles. And being the leading brand in electric cars, Tesla stands to gain tremendously from this transition.
The rising popularity of electric cars can be attributed to the following reasons: Lower Emissions, Health Benefits, Cost Savings, Energy Independence and Subsidies/Incentives.
Even though there is a broad choice of electric cars on the market, most customers gravitate towards Tesla. There are many reasons for this, including Tesla’s brand as a luxury and environmentally friendly product, its technology, its superior design, its performance, and its broad network of charging stations.
In conclusion, not only is the target market for Tesla durable and loyal, it stands to grow immensely as the world sheds its dependence on oil and the entire transportation section transitions from polluting technologies like internal combustion engines to cleaner technologies like electric cars.