The Impact of Tesla Model Y & 3 on the Zhejiang Electric Vehicle Market in the Past Three Years
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● Title;
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● State the aim and objectives of the research;
● Provide an outline review of key underpinning literature;
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● Outline the key findings so far from your secondary research.
● Outline anticipated milestones in the preparation and execution of the project – create a Gantt chart and describe the project journey.
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THE IMPACT OF TESLA MODEL Y & 3 ON THE ZHEJIANG ELECTRIC VEHICLE MARKET IN THE PAST THREE YEARS
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Introduction and Background
Tesla, an electric vehicle company based in California, United States, has been in the spotlight since its establishment. The company has made remarkable achievements within a few years of entering the Chinese market. It has become one of the leading brands in China in terms of sales. Tesla began as an electric racing car company in 2003 (Chen, Li, & Zhi, 2022). According to Elon Musk, Tesla’s Chief Executive Officer (CEO), the master plan was to establish an expensive low-volume car and then gradually develop a medium and high-volume car at an affordable cost. Its first vehicle, the Roaster was launched in 2008 (Zhang, 2022). In 2014, Tesla entered the Chinese market with Model X and later Model Y in 2016 (Dai & Zhang, 2022). Both models were premium cars imported from the US and cost around one million Yuan. In 2020, Tesla officially entered the Chinese market, with the mass delivery of its Model 3 at Tesla Giga Shanghai (Yin et al., 2022). This model was reasonably priced. Initially, cars imported from the US were subjected to a 25% tariff (Li, 2023). This increased to 40% following the US-China trade conflict in 2018, prompting Tesla to negotiate with central and local governments to set up a factory in China (Thomas & Maine, 2020). This resulted in the establishment of Tesla’s Gigafactory in Shanghai. The timing was brilliant since the Chinese government had just lifted the restriction on foreign ownership in new car firms. As a result, Tesla became the first foreign-owned vehicle company in China. Gigafactory started manufacturing Model 3 in late 2019 and Model Y in late 2020 (Dai & Zhang, 2022). The high tariff barrier, the low production cost, and the largest automotive market in China compelled Tesla to build a factory in China (Bloomberg, 2023). Tesla’s strategy in China is to utilize low labor costs and local supply chains to increase production and minimize the product price. This would increase the sales of its new models. Today, the company focuses on producing affordable mass-market electric vehicles. This paper studies the impact of Tesla Model Y and 3 in the Zhejiang electric vehicle market. The study uses a comparative analysis to evaluate the contribution of Tesla's new models to the Zhejiang market. The result is that Tesla's new models play a significant role in Zhejiang's clean energy industry.
Research Aim and Objective
This research aims to evaluate the impact of Tesla Model Y and 3 on the Zhejiang electric vehicle market. Tesla's Model Y and 3 are the company's new models to exist in the Chinese market. To achieve the research objective, this study analyzes the demand for electric vehicles in Zhejiang, the production volume of green energy, the price trend, and the market share of Tesla in the region. These factors determine how Tesla’s new models impact the region’s energy vehicle industry.
Literature Review
Tesla is a major player in the Zhejiang electric vehicle market by manufacturing cars in the region instead of exporting from the US. The company employs SMART goals and critical success factors to dominate the Zhejiang market. The SMARK goals involve capturing the majority of the region’s market share, increasing the advertising budget, and utilizing China's non-existent electric vehicle market (Zhang, 2022). Tesla also takes advantage of critical success factors like increasing competition to attract new customers in Zhejiang and maintain successful relationships with stakeholders in China. Some of its estimated strengths like innovative technologies, good reputation, and innovative performance give it an upper hand in the electric vehicle industry (Yin et al., 2022). These strengths define Tesla’s ability to dominate the global market. In Zhejiang, China, the company is recognized as the pioneer of the energy vehicle market because its entry into the region via Shanghai led to the emergence of electric vehicle industries. Currently, Tesla is not the single producer of green vehicles in Zhejiang. Companies like BYD have existed to compete with Tesla in the production and delivery of electric vehicles.
According to Chen, Li, & Zhi (2022), introducing a new product into the market is a critical competitive strategy for companies interested in expanding their customer base and revenue. This strategy changes the market's competitive structure and gives consumers a wider range of alternatives. In this study, researchers gathered sales data for new energy vehicles in China for the last three years and analyzed the effects of the introduction of Tesla on the Zhejiang electric vehicle market using a comparative analysis model CITATION Dai221 \l 1033 (Dai & Zhang, 2022). Findings suggest that consumers prefer affordable, moderate-range, large and heavy, and low-energy consumption vehicles. Vehicle brand price elasticities indicate that Tesla has captured a significant market share despite fierce competition from Chinese electric vehicle manufacturers CITATION HeW23 \l 1033 (Hao & He, 2023). This is due to the introduction of new models Y and 3.
Being the leading producer of electric vehicles in the world, Tesla has significantly impacted Chinese manufacturers, changing the competitive atmosphere of the Chinese market CITATION HeW23 \l 1033 (Hao & He, 2023). China is one of the fastest-growing markets for green vehicles. The industry has passed the cultivation stage and is currently in the growth stage, a critical stage for building and