However, such fully electric advanced vehicles are technically challenging and expensive to produce. On the other hand, Tesla has been able to develop its Model S, Model X and Model 3 cars that are fully electric and boasts with advanced technical characteristics such as high speed and long milage in a single charge. Specifically, electric cars were known for being slower compared to traditional cars and their batteries did not last for long. On one hand, almost all major automakers such as General Motors, Ford, Toyota, BMW and others have built electric cars that are not very expensive, but performance of these cars are compromised.
One of the major challenges for electric vehicles is the bargain or compromise between their performance and cost. Compromise between performance and cost of electric vehicles. The following factors play an instrumental role in the formation of threat of new entrants into electric vehicles industry:ġ. The threat of new entrants into alternative fuel vehicles manufacturing industry is moderate. Tesla Porter’s Five Forces Analysis below contains the application of these factors to analyse the competitive environment for the alternative fuel vehicles manufacturer.įigure 1 Porter’s Five Forces Threat of new entrants in Tesla Porter’s Five Forces Analysis Porter’s Five Forces analytical framework developed by Michael Porter (1979) represents five individual forces that shape an overall extent of competition in the industry.
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