Threat of New Entrants: The threat of new entrants in the industry with Tesla ar

Threat of New Entrants:
The threat of new entrants in the industry with Tesla are low due to the barriers that are in place and the amount of competitors that already exist within the market. The barriers that are involved with this are the research, development, and design of a car. This doesn’t come easy or cheap, so being able to do this takes time and money to complete properly. Along with that, establishing your brand in this market would take a long time. Creating something that people like and would be willing to move towards is a difficult thing to do. Brands that are already established like Tesla or Mercedes benefit from what they economy has likes about them. New entrants would have to try and move passed this barrier and would struggle to do so with the upfront costs that come along with it.
An example of a new entrant into the electric car market would be Lucid Motor Company. This company created a car called the Lucid Air, which is an electric car based in California that has been named MotorTrends 2022 car of the year. The Lucid Air is the motor companies first car and it has already won this award. With that being said, Lucid Motor Company has made itself a threat in this market with Tesla.
Threat of Substitutes:
In this area, the threat of substitutes are moderate. This is because of the alternatives that are offered by competitors and with the public transportation that is offered as well. It doesn’t cost much to switch from one type of brand to another based on the prices of vehicles, and public transportation is low as well. This makes it easy for people to choose what they want and decide what is best for them. Along with that, competitors offer hybrids and other electric vehicles that have options to fit all customers. This makes it easy for customers to be lost to competitors, rather than going to Tesla that may be priced higher.
An example for this would be Mercedes Benz offering the Mercedes-EQ. This electric sedan is new and still a luxury vehicle, that many will look to own themselves. Despite being new to the market, Mercedes is still moving towards being a luxury option for people within the electric vehicle market.
References:
Kissinger, D. (2019, February 22). Tesla Inc.. Five forces analysis (Porter’s Model) & Recommendations. Panmore Institute. Retrieved November 17, 2021, from http://panmore.com/tesla-motors-inc-five-forces-analysis-recommendations-porters-model.
Ltd, A. A. (2021, August 12). Tesla Analysis: Pestel, SWOT and Porter’s five. UK Essays. Retrieved November 17, 2021, from https://www.ukessays.com/essays/business/tesla-pestel-swot-porters-five-2123.php.
Valdes-Dapena, P. (2021, November 15). Lucid Air named Motortrend Car of the year. CNN. Retrieved November 17, 2021, from https://www.cnn.com/2021/11/15/business/lucid-air-motor-trend-car-of-the-year/index.html.