Overcoming Barriers to Entry in an Established Industry: Tesla Motors

Abstract

The automobile industry's high costs of entry, economies of scale, and network effects from distribution, fueling, and service lead many to conclude that new entrants have no chance. Tesla Motors has overcome many barriers to pioneer electric cars. Starting with partnerships and a minimum viable product, Tesla is working to innovate and scale up. Tesla now produces a top-selling luxury car and has a market capitalization twice that of Fiat Chrysler and half that of General Motors or Ford. Tesla has shown that a startup can enter and disrupt the status quo in one of the most established industries.

Comparing Technology Acceptance for Autonomous Vehicles, Battery Electric Vehicles, and Car Sharing—A Study across Europe, China, and North America

“…The current technological developments in the automotive industry are particularly relevant for traditional incumbent manufacturers who are facing an increasingly competitive market: New automotive manufacturers, such as Tesla and Build Your Dreams, technology companies like Google and Apple, and mobility service providers, such as Zipcar, enter the industry [10,12,16,17]. These new entrants, as well as established car manufacturers, are increasingly placing the development and marketing of Autonomous Vehicles, Battery-electric Vehicles, and Car Sharing at the heart of their corporate strategy, despite facing little acceptance by many customers [13,[15][16][17][18][19][20][21]. Therefore, it is paramount to understand what factors determine the consumer acceptance of the three technologies, and to what extent differences exist between markets worldwide.…”

Range extenders: an innovative approach to range anxiety in electric vehicles

“…The phenomenon of 'range anxiety' suggests that the development of a complementary charging infrastructure is required for EVs to achieve a greater level of consumer acceptance. Like many products EVs are characterised by network effects as increasing number of users would enable the creation of the charging infrastructure (Stringham et al, 2015).…”

Disruptive Technology and the Board: the Tip of the Iceberg

“…Wealth management -once the fi eld of the elite in fi nancial planning -is being impacted by the latest in RPA and RDA specialists aiming to disrupt the existing market by off ering complex fi nancial plans, taking into account aspects of client information and better risk management at lower rates (Bhatnagar, 2016). Disruptive technologies are not just replacing humans: they are improving services, products and productivity and, in many cases, changing how markets operate, removing the barriers of entry for new companies to take on the giants (Fenwick, Hisatake, & Vermeulen, 2016;Stringham et al, 2015).…”

“…Ultimately it is a question of whether it is a mode of transportation or much more, with links to communication, other networks and maybe an experience yet to be defi ned, with both robotic and AI advancements yet to be determined. Early indications show disruption at all levels of the current market (Dirican, 2015;Stringham et al, 2015;Walker, 2014).…”