Market entry strategies for electric vehicle start-ups in the automotive industry – Lessons from Tesla Motors

The entry and growth of Tesla Motors has produced enormous change in the automotive industry. What lessons can alternative energy start-ups learn when considering entry into an established industry? Reviewing the innovation management literature, we examine the emergence of Tesla Motors and analyze its commercialization of electric vehicles through an in-depth case-study. We draw on extensive secondary data and construct a performance trajectory depicting Tesla’s entry into the automotive market, to demonstrate that Tesla Motors has not followed a disruptive innovation strategy. Instead, Tesla’s commercialization strategy is explained through the lens of Architectural Innovation and the Attacker’s Advantage. Implications are provided for new entrants.