Overcoming Barriers to Entry in an Established Industry: Tesla Motors

California Management Review 57/4 : 85-103

20 Pages Posted: 24 Dec 2015

See all articles by Edward Peter Stringham

Edward Peter Stringham

Trinity College; American Institute for Economic Research

Jennifer Miller

University of Arizona

J. R. Clark

University of Tennessee, Chattanooga

Date Written: 2015

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.

Note: Published as Edward Peter Stringham, Jennifer Kelly Miller, and J.R. Clark (2015) Overcoming Barriers to Entry in an Established Industry: Tesla Motors. California Management Review 57/4 : 85-103. © 2015 by the Regents of the University of California. Copying and permissions notice: Authorization to copy this content beyond fair use (as specified in Sections 107 and 108 of the U. S. Copyright Law) for internal or personal use, or the internal or personal use of specific clients, is granted by the Regents of the University of California for libraries and other users, provided that they are registered with and pay the specified fee via Rightslink® or directly with the Copyright Clearance Center.

Keywords: Innovation, Barriers to Entry, Electric Cars, Entrepreneurship, Silicon Valley, Case Study, Environmental Protection, Environmental Policy

Suggested Citation

Stringham, Edward Peter and Miller, Jennifer and Clark, J. R., Overcoming Barriers to Entry in an Established Industry: Tesla Motors (2015). California Management Review 57/4 : 85-103. Available at SSRN: https://ssrn.com/abstract=2707735

Edward Peter Stringham (Contact Author)

Trinity College ( email )

Hartford, CT 06106
United States

American Institute for Economic Research ( email )

PO Box 1000
Great Barrington, MA 01230
United States

Jennifer Miller

University of Arizona

Department of History
Tucson, AZ 85721
United States

J. R. Clark

University of Tennessee, Chattanooga

Department of Philosophy & Religion (#2753)
Chattanooga, TN 37403-2598
United States

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