Tesla’s Business Model More Similar To Amazon’s Than You Think

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Originally published on EVANNEX.

Tesla is more than just a car company. According to Miriam Tuerk at Forbes, “The electric-car company is working to decentralize power distribution and offer an alternative to today’s utility… Tesla is demonstrating that if the challenge goes unmet by traditional power utility companies, they’ll have their lunch stolen.”

Elon Musk’s strategy encompassing both electric cars and clean energy solutions is on full display inside Tesla’s stores (Image: Tesla)

Tesla first took on the auto industry, “reinventing electric cars as luxurious and powerful, albeit expensive for the average consumer. Today, those once unattainable vehicles are about to be offered on an affordable scale through the launch of ‘Tesla Model 3’, expanding the company’s customer set. The company is now using those same tactics for its expansion into power utilities.”

Tuerk explains, “Tesla’s energy offering began with its Powerwall energy storage product, which again takes an existing technology and rebrands it, this time as a luxurious home-energy solution… [however] the question now is, can this product be made affordable enough to be installed on a massive scale? Elon Musk thinks so, and if Tesla’s electric-cars business is any indication, he has a good shot at being proven right.”

A look at how Vermont’s Green Mountain Power partners with Tesla  (YouTube: MyNBC5-WPTZ)

It turns out, “like Amazon before it, Tesla is pursuing a two-pronged strategy. First, disrupt a legacy industry with a new model and approach, then expand to new industries by grabbing a stake in a key infrastructure sector. Amazon did this when it took on the retail industry with its foray into e-commerce, and then expanded into data centers, using its technology platform as the foundation of both businesses.”

To that end, Amazon is more than just an e-commerce business. Its AWS (Amazon Web Services) division now powers everyone from Netflix to AirBnB.

Tesla’s Powerwall is being actively promoted along with the company’s electric cars in their stores (Image: Tesla)

Amazon reshaped retail and then transformed tech via the infrastructure that powers it. Taking a page out of Amazon’s playbook, Tesla’s strategy is equally (if not more) audacious.

After all, it’s not just the automakers and utilities that could lose marketshare to Tesla. Combining the company’s EV and energy divisions, it’s clear that “Tesla’s goal is to create an all-in-one, sustainable energy option, with the potential to compete with the fossil-fuel giants.”

Source: Forbes

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Matt Pressman

Matt is all about Tesla. He’s a TSLA investor, and he loves driving the family's Model 3, Model S, and Model X company cars. As co-founder of EVANNEX, a family business specializing in aftermarket Tesla accessories, he’s served as a contributor/editor of Electric Vehicle University (EVU) and the Owning Model S and Getting Ready for Model 3 books. He writes daily about Tesla and you can follow his work on the EVANNEX blog.

Matt Pressman has 332 posts and counting. See all posts by Matt Pressman