Customer Behavior Analysis for Tesla

Discuss about the Customer Behavior Analysis for Tesla.

It is considered that the purchase behavior of the customers depend upon different factors which influence them to make a purchase. Different individuals are motivated by different factors such as price, quality, promotion of the product and its environment friendliness. In this, content, the present paper the customer behavior will be analyzed for the Tesla Model 3 which is an eco car.

Motivation for Purchase 

Tesla Motors which is a renowned America automotive company launched Tesla Model 3 which is an electric car on 31 March 2016. It is determined that just after a week of its launch, the model was highly popular among customers and more than 300,000 reservations for Model 3 were made (Hull, 2016). This is because the company launched the model with best features that attracted customers towards it. It is found that customer’s main intention for purchasing Tesla Model 3 has been its eco-friendly feature. Tesla Model 3 is environment friendly which motivates people to purchase it as people at present are more concerned about the mother earth.

Another feature that attracts customers towards sedan Model 3 is that this vehicle is built on the third-generation battery technology platform of the company which is more efficient battery packs (Musk, 2016). This next generation feature provides autopilot system that allows fully autonomously driving to the drivers. Tesla Model 3 is considered as the most popular car by the company which is also the cheapest which influence customers to make a purchase as it is not too expensive. Tesla also uses new technology in the making of Model 3 that helps the vehicle to go on a single charge and doesn’t require charging for longer hours (Branman, 2016). Moreover, this model also does not require any heavier or bigger battery packs as it uses advance battery technology. Tesla Model 3 is an electric car that is considered to be higher in performance and efficient in designing in comparison to other gasoline powered cars. Tesla Model 3 offers a speedy performance due to which it has been the first choice among the buyers (Niedermeyer, 2016).


Tesla has communicated that Model 3 is the most affordable car for the people until now. The company launched of Model 3 which is much cheaper than other gasoline vehicles and has put itself within the reach of average person by offering this model within an estimated range of $35,000 (Froome, 2016). This is because, Tesla Model 3 prices starts from $35,000 which can be considered affordable to some extent but not by all people. It is investigated in a study that most people in the US cannot afford a new car. It was found that the average price of a brand new car is approximately $33,865 that is a monthly payment of $633 approximately if 20% is considered as the down payment (Read, 2016). Whereas, the average household income of residents of the US is below $26,000 which shows that most people do not find a minimum purchase of $35000 as affordable (Read, 2016). Therefore, the company is trying to make the expensive technology more affordable by launching another wheeler car which will be much cheaper. However, Model 3 has been the first luxury brand that will be within the range on an average person (Flavelle, 2016).

Trending Features

At present the customers are very comfort freak and also judge brands by their quality, price, comfort level they provide. The consumers consider that there are some features that every car must have such as comfortable seats. Most people spend a huge amount of time in travelling due to personal choices or professional reasons therefore; they opt for a car with more comfortable seats so they can enjoy their journey in a relaxed manner (Consumer Reports, 2016). Another feature is power seat which can help the driver with much more comfortable driving position as power seat can be adjustable. Forward collision warning is another feature that can be aligned with radar, laser or camera in order to assess the surrounding conditions. This system alerts the driver about the surrounding and collisions or accidents can be prevented. A backup camera is also a must have these days as it provides rear view which is safe and convenient feature for parking and car reversing (Consumer Reports, 2016). Along with this, blue tooth connectivity, USB port, rear cross traffic alert is also must have features as per the consumers.   

Level of Awareness for Electric Vehicles

Electric vehicles are potential options that can help in reducing CO2 emission. The willingness of consumers to purchase these new vehicles lies in the large scale diffusion of electric vehicles successfully (Sharma & Maheshwari, 2014). People are aware that in the near future the price of fuel will increase. Moreover, they are also aware that electric cars are a safer and cheaper option to protect environment. However, it is found that there is low level of familiarity among people regarding this new technology (Thiel et al., 2012).

Barriers in Consumer Demand for Electric Car

According to McCowen (2015), the two major barriers in Australia that prevents local people to accept electric cars are lack of battery recharging infrastructure publicly and lack of government driven incentives. In the views of Dini, Washington & Hawkins (2013), purchase cost, domestic production, lack of supportive policy and consumer perception are the factors that are responsible for low purchase demand for electric vehicles.

Psychological Barriers

It is investigated that there are some psychological traits that prevent people from buying an electric car. These psychological barriers include range anxiety which exists in consumers due to lack of charging stations. Another factor is the resale anxiety which is concerning for the people as they think that price of electric cars might drop in the future (Hill, 2015).

Demographics Purchasing Electric Car

In the views of Watts (n.d.), retirees with fixed income find electric cars cheaper in comparison to petrol cars therefore; they can be contributors to Electric cars. Another segment that can adopt and purchase electric car include environment lovers and technology freak consumers.

Chances of Selling to Existing Customers

As determined above, that Tesla Model 3 is already popular in the audiences and the pre booking has exceeding 300,000 this shows that consumers value the brand and trust is built. This depicts that there are high chances of selling the product and services to the existing users as they already have faith in brand and consider the brand as best selling electric car (McCowen, 2015).

Purchase Behavior

According to Jabeen (2012), there are two factors that determine the behavioral intention to use a system which includes perceived ease of usage and perceived usefulness. This means if users find the performance of the electric car good and easy to use they will be more interested to buy the product again and also suggest other people to use it. Another factor that influence purchase behavior is technological readiness and technology adoption propensity. 90% of the people think that new technology adoption helps in making life easier.

Key Segment

It is also investigated that people concerned about the environment are the potential buyers (key segment) of electric vehicles (Jabeen, 2012).

The 4ps

The four P’s include price, place, promotion and product that need to be considering for a product success. The product that is being sold is Model 3 and people prefer electric cars which are in their budget and with some automatic features. The knowledge about the electric cars is low but with the increasing awareness about the deteriorating environment people are inclined towards buying eco friendly options. Moreover, the consumers in Australia mostly prefer to purchase a white or black color car (Meagher, 2015; Fottrell, 2014). However, the choices of individual vary and they even prefer to buy red and grey color cars. People usually buy car from a dealer as they give warranty. However, new trends show that Australians find buying a car online is easier (Beismann, 2011; Denton, 2011). It is considered that online marketing is a new and better way to sell and promote business as it provides richer two way communication (Hirsh et al., 2016).  Therefore, many automotive companies across the world have started using online medium to sell and promote their services. In Australia, Tesla is already using social media sites and other blogs to promote Model 3 as well as the other upcoming models which is showing positive results. Other forms of promotion may include advertising on TV, direct marketing, ad in newspapers and magazines (Chitty et al., 2011).


From the overall discussion, it has been analyzed that the customer behavior towards Model 3 is positive. The main feature that attracts customers towards the car is its environment friendly nature, next generation feature and a brand affordable by average earning people. Moreover, the car already is popular among large pool of audience which shows that company has successfully promoted the model and has influenced customer to make a purchase.


Beismann, T. (2011). Australians prefer buying cars online than through dealers. Retrieved on: 9 September 2016, from

Branman, M. (2016). TESLA MODEL 3 PERFORMANCE, SPECS, AND NEWS. Retrieved on: 8 September 2016, from

Chitty, W. et al. (2011). Integrated Marketing Communications. Cengage Learning.

Consumer Reports. (2016). Must-Have Car Features, and Those You Can Skip Advice to help with optioning your next car. Retrieved on: 8 September 2016, from

Denton, L. (2011). Buying a car in Australia? READ ME FIRST! Retrieved on: 9 September 2016, from

Dini, A., Washington, S. & Hawkins, G. (2013). Understanding Barriers to Consumer Demand of Plug-in Vehicles in Australia. Australasian Transport Research Forum.

Flavelle, D. (2016). Tesla’s affordable Model 3 sparks lineups. Retrieved on: 8 September 2016, from

Fottrell, Q. (2014). Why white is No. 1 car color: Blame Apple, not O.J. Retrieved on: 9 September 2016, from

Froome, C. (2016). Tesla’s gamble on its ‘affordable’ electric car. The Conversation Media Pvt Ltd.

Hill, J. S. (2015). Psychological Barriers Are Holding Back Electric Vehicle Adoption. Retrieved on: 8 September 2016, from

Hirsh, E. et al. (2016). Changing Channels In The Automotive Industry: The Future of Automotive Marketing and Distribution. PwC.

Hull, D. (2016). Tesla Says It Received More Than 325,000 Model 3 Reservations. Retrieved on: 8 September 2016, from

Jabeen, F. et al (2012). Acceptability of Electric Vehicles: Findings from a driver surgery. Australasian Transport Research Forum.

McCowen, D. (2015). Government policy putting the brakes on electric cars: Renault. Retrieved on: 8 September 2016, from

McCowen, D. (2015). Why the Tesla is Australia’s best-selling electric car. Retrieved on: 8 September 2016, from

Meagher, D. (2015). White the most popular colour for a car, but for me it’s black. The Australian.

Musk, E. (2016). Tesla Model 3: Price, specs and everything we know. The Week.

 Niedermeyer, E. (2016). Tesla’s Model 3 Could Destroy Elon Musk’s Company. The Daily Beast.

 Read, R, (2016). Study: Most families in America can’t afford a new car. Retrieved on: 8 September 2016, from

Sharma, R. P. & Maheshwari, N. (2014). A Study On The Customer‟s Awareness And Perception Level Towards Green Cars. INTERNATIONAL JOURNAL OF TECHNOLOGY ENHANCEMENTS AND EMERGING ENGINEERING RESEARCH, 2(5), 72-75.

Thiel, C. et al. (2012). Attitude of European car drivers towards electric vehicles: a survey. JRC Scientific and Policy Reports: European Commission.

Watts, T. (n.d.). Do electric cars have a future in Australia? Yes, but they’re not for everyone. Retrieved on: 8 September 2016, from
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