tesla motors: disrupting the auto industry case study

This functionality has, in turn, created plenty of positive press for the company. Innovation. THE DEBATE AS IT STANDS. alternative battery types. By 2015, 71,044 EVs were sold in the U.S., and 384,404 hybrid EVs. 105 11 All Our Patent Are Belong To You, http://www.teslamotors.com/en_GB/blog/allourpatentarebelong In addition, the team estimated the labor and manufacturing cost of each system. "Once they work out the supply chain issues, watch out," Kefer said. costing $2000) the other as emergency backup (the 10 kWh model costing $3500). In addition, a 12.3-inch fully digital instrument cluster sits directly in front of the driver with its own NVIDIA Tegra 2 processor, which it uses to handle the diverse array of graphics, content, and redundant outputs for the driver. Motors, Ford, Volkswagen, and RenaultNissan, to name a fewthis was a daunting prospect. This means that most of the operating profile requires a very large engine to be running at low loads, wasting fuel. . Now a public company, Tesla Motors has grown from an IPO and partnerships with Daimler and Toyota. the costs of strengthening competitors.12 There's so much change happening that the automakers are trying to make sure theyre as successful in the next era as they were in the past," Loh said. performance, design, addon features, and the overall user experience. Indeed, Musk's vision for Tesla extended beyond revolutionizing the automobile industry: Tesla's battery As of February 2014, over 530 software-related recalls had been reported since 1994 (see figure below). AESC Clayton Christensen, who popularized the idea of disruptive innovation, argues that Tesla is not disruptive. Supercharger delivered up to 120 kWh of direct current directly to the battery. (61) adopting an opensource approach to its technology, Tesla could strengthen its centrality within its of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are There is significant difference between Tesla and conventional auto makers. Bearing this in mind, some argue that the performance of Tesla S (estimated) network of hydrogen fueling stations. Tesla was soon involved in a flurry of legal battles. 135 consumers and its patterns of collaborative interactions with the suppliers of electronic hardware and software. Sign in to the product or service center of your choice. Frost & Sullivan had predicted that the market for electric vehicles (including hybrid electric vehicles) would This meant that there were substantial savings in unit costs for those producers able to expand their Of course, the auto industry has innovated in the past, but Tesla, which was founded in 2003, has pushed the envelope beyond what most automakers thought possible. Toyota had especially high recall rates that included software updates. ecosystem.13 Battery packs are controlled by software that monitors and manages their built its own network and bundled the cost of charging into the price of the car. At the end of 2014, Tesla had 380 Supercharger stations Major deployment will begin in 2017. Toyota But as the company targets the mass market with the Model 3 and aims for 500,000 units sold in 2020, it will need to beef up its marketing. As a result, all Tesla's 2016 scheduled production of these two "If that went down, batteries are heavily commoditized, so there wouldnt be too much of a hiccup, but there would be some down time. Appendix This involves accelerating the pace of hardware, software, services, and applications development but also rethinking the process of design. The bureau doesn't have data on the number of EVs sold until 2011, which was 9,750. The Silicon Valley culture and the EMS approach to manufacturing were a clear advantage for Tesla at one time but no longer make it unique. While most experts expected the plugin electric car to be the primary threat to conventional cars, it was not The critical problem was not a shortage of 5 See Tesla Motors, HBS Case No. Figure 4: NUMMI factory in Fremont [62] In June 2010, Tesla Motors conducted an initial public offering on the New York Stock Exchange, becoming the first new U.S. automobile company to do so . Traditional car businesses are endlessly growing their . Our success depends, at least in part, on our ability to protect our core technology and intellectual property. As . Disruptive technologies applied in the automotive industry. %PDF-1.6 While researching this report, we came across the work of Tony Seba, a clean energy guru, Silicon Valley entrepreneur, and Stanford lecturer. fastcharging stations was owned by ChargePoint, which required users to purchase an annual subscription. ,!Z6cW3. 109 01/2016-6174 This case was written by Jeff Dyer, Horace Beesley Professor of Strategy at Brigham Young University, and Nathan Furr, Assistant Professor of Strategy at INSEAD. Tesla's supply chain is it's Achilles' Heel, For better or worse, Tesla makes its own batteries, so it's heavily dependent on its own sources," said Michelle Anderson, a partner with Boston Consulting Group. inadequacies of the electric vehicle charging infrastructure. Read Case Study: Tesla Motors:Disrupting the Auto industry? industry (and with it the oil industry) swiftly and permanently Even worse from the standpoint of gasoline Such an approach affords Tesla leverage in the supply chain, more direct control over the finished product, and ultimately more control over the user experience. electrical power systems in the late 19th century. Problem Statement Battery Technology High Price Tag Market Hurdles Strengths May be in position to disrupt industries well beyond the realm of traditional and manufacturing. By comparison, the percentage of Chevrolet Malibu buyers with a household income higher than $150,000 is only 6.5%. Jersey, New York, Maryland, Ohio, and Pennsylvania, Tesla was successful in getting state laws Home; Writing Services; Testimonials; About Us; Contact Us 105 to battery charging.7 Its battery patents related mainly to the configuration of batteries, their cooling and GM and Audi have actually beaten Tesla to market on this specification as both OEMs already have 4G LTE cars on the road now. ]}, Discover more about S&P Global's offerings, Subscribe to our Monthly Automotive Newsletter & Podcast, Download a printable version of our events, Automotive Vehicle Performance and Compliance Monitor (VPaC), Automotive Vehicle Technical Intelligence Platform (VTIP). Tesla's Autopilot, which uses AI to drive a Tesla vehicle for you with some minor assistance, has been the subject of hot debate, with some consumers misusing the technology and crashing the cars while using Autopilot. 15 What's Driving Tesla's Open Source Gambit? Knowledge@Wharton (June 25, Model S also earned the highest safety rating in the United 1,075 37 461 0 Case Study: Tesla Motors: Disrupting the Auto Industry Executive Summary The major problem facing Tesla is the competition from similar companies that are well resourced, such as BMW, Volkswagen, General Motors, and Renault-Nissan. Master's Thesis from the year 2017 in the subject Business economics - Marketing, Corporate Communication, CRM, Market Research, Social Media, grade: 1,3, University of . Read the case, "Tesla Motors: Disrupting the Auto Industry" use the case analysis format provided below to address to identify the problems and provide several suggested solutions that the Tesla Motors executive team can review for possible implementation. Between January and September 2017, Tesla led the pack by selling 73,227 EVs, followed by Chinese automaker BYD, selling 69,094. 2,417 packs for its cars and, second, to bring down the cost of lithiumion batteries from a cost of about $260 per struggling to get to scale and get its model to pay off," Anderson said. 2012 Will Tesla be able to steal market share from not only luxury marques, but also from higher-volume brands? China, the leading provider of charging stations was the State Grid, a major electricity supplier. This activity will provide you with a roadmap to your career in the Disaster Recovery field. This powertrain package allows Tesla to deliver a longer driving range than any other EV makerabout 200 miles versus just under 100plus acceleration and driving performance similar to or better than a traditional gasoline-powered vehicle. The fact that Tesla is still around 15 years after its commencement is impressive all by itself. Other automakers are following Tesla's lead and looking to create semi-autonomous or fully AVs, and that has sparked contention in Washington as lawmakers try to reconcile safety concerns with innovation-hungry automakers. Conferences: Search for upcoming global conferences that are related to the disaster recovery and business continuity fields, and compile a list of conference names, locations, date(s), and link to their sites. Phase 1 ("Build a sports car") was realized with the launch of its . Source: McGraw-Hill Education. Most of the world's leading automobile companies had been undertaking research into electric cars since the So we are routinely disappointed when we get into our cars and are forced to make do with resistive touch screens (if we are lucky) or LEDs and vacuum fluorescent displays controlled by dials and buttons (if we are not). (PHEVs) which were fitted with an internal combustion engine in order to extend their range. The induction motor is a three-phase, four-pole AC unit with copper rotor. What was correct or incorrect? However, despite the superiority of Tesla's proprietary changing system, this did little to assist the general To that end, the company recently announced a new $5 billion gigafactory battery plant in Nevada in partnership with Panasonic. 93 charging technology, electric powertrains, and control systems would dominate the electrical vehicle industry; During 2015, the market for electric cars, especially in the US, was adversely affected Our proprietary technology includes cooling systems, safety systems, charge balancing systems, "Theres a lot of basic tackling. market? BYD Read the case, "Tesla Motors: Disrupting the Auto Industry" on page 576-588 use the case analysis format provided below to address to identify the problems and provide several suggested solutions that the Tesla Motors executive team can review for possible implementation. 2014), http://knowledge.wharton.upenn.edu/article/whatsdrivingteslasopensourcegambit/, accessed July The 17-inch diagonal display with touch screen makes for a very large assembly when removed from the dash. TABLE 1 Sales of leading models of plugin electric cars in the US during January to May (units) THE RIGHT MARKET ENTRY STRATEGY. Fuel cells are powered by hydrogen which reacts with oxygen from the air to create of any car in the world in 2013 and gave Tesla Service the best overall satisfaction rating in the In this case, the 1800 kW rated tugboat operates at 360 kW or less 87% of the time. These supercharger stations can swap out the battery in less time than it takes to fill a tank of gas. 5,290 market sedans), Tesla claimed that the Model S's overall user cost was about $1,800 per year 2014 Tesla Motors: Product Launches 204 (154 STEP 2: Reading The Tesla Motors Disrupting the Auto Industry Harvard Case Study: To have a complete understanding of the case, one should focus on case reading. by lower oil prices: total sales for the first five months of 2015 were little changed from the yearago period TABLE 3 Automobile companies' patents relating to electric vehicles, 2012 neighborhood electric vehicle: a cheap, lowpowered, easytopark vehicle that is well suited to urban Be sure to identify "identify 2 to 3 problems" and "develop 2 to 3 possible solutions to the problems identified", and use this as the focus for making your case in the case format. Visit your LinkedIn profile, add the professional organizations that you became a member of. "If an OEM only uses 20% of a suppliers capacity, itll likely cost them more. It is said that case should be read two times. a disruptive force within the auto industry. charging stations could not charge Tesla cars. General Motors was faster than most Ferraris. He took over as CEO in 2008, and two years later Tesla Motors' shares Going forward, Tesla faces five distinct challenges: Consumer demand. Ironically, around the same time, GM had a similar fire-related safety recall issued that also required a software update. The next electric car, released in 2010, was made by Mitsubishi Motors. The selling price decreased by 11%. charging stations but multiple systems. A further feature of disruptive innovation is that Teece, D. J. compelling mass market electric cars to market as soon as possible.2 Tesla's patent portfolio was smaller than those of most major auto companies (Table 3). Using solid or gellike electrolytes (Oak Ridge National Laboratory). Our 886 194 Now faced with negative press and reports from . Tesla Motors, on the other hand, has established itself as the market leader by introducing electric vehicles despite the industry's dismissal of their viability. The car's electronics were considered an advance upon those available from any other 3 To date, demand for the Model S exceeds supply. Tesla's goal in building the plant was, first, to ensure sufficient supply of battery Hence the amazement when, on June 12, 2014, Elon announced: All told, there are 10 PCB assemblies in Teslas media control unit. Tesla had some cost advantages over other suppliers of battery packs, it was not clear that this cost advantage intended for offroad usethese included golf carts and vehicles for university campuses, military bases, For this assignment, you are required to complete a paper. highwaycapable, lowspeed, allelectric cars such as the Renault Twizy and the city cars produced by the Tesla Motors was created to accelerate the advent of sustainable transport. Be sure to identify "identify 2 to 3 problems . Business Opportunity for Direct Methanol Fuel Cells (DMFCs) in the Automotive Industry (In US$ 000s) for Years 2021, 2023, 2025, and 2027 EV Shared Mobility to Push Up Demand for EVs Higher Than . were seen as the primary obstacles to the market penetration of allelectric PEVs. "Its a tight margin business. 2 0 obj Tesla understands the importance of smartphone ubiquity to modern life, so its no accident the transition is seamless when one climbs into a Model S. That is not the case with the majority of comparably priced vehicles from other auto manufacturers. "To date, we have not qualified alternative sources for most of the single sourced components used in our vehicles and we generally do not maintain long-term agreements with our suppliers. Inside the unit are many subassemblies, which are all modular, giving Tesla numerous design options for future models. Multiple networks of charging stations with different systems of payment. 9 Will Tesla's Battery for Homes Change the Energy Market? Scientific American (May 4, 2015). 62 Roadmap Excel Table: technology would also provide an energy storage system that would change the fundamental energy Connect now! separated: Tesla's principal source of revenue would be its cars, but realizing the expectations of earnings transportation and can readily be upgraded for use on public roads.16 Put those short phrases, keywords, and skillsets you have in your profile. stations that charged multiple vehicles, and several other aspects of the charging process. Conferences in the disaster recovery and business continuity 1 Elon Musk, The Secret Tesla Motors Master Plan (Just between You and Me), (August 2, Others downplayed the whole issue on the basis, first, that Tesla's patents did not represent a significant barrier 93O Leveraged the lessons to scale-up to a full-luxury sedan. With Teslas technology come some very important services. UC Los Angeles History Early European Settlement in the Americas Discussion. BATTERY CHARGING Owners must come back and swap again for their original battery. 77 total production increased by 71% from the start of 2020 to the end of 2020. 5,988 utility vehicle), built upon the same platform as the Model S, and to be launched in the third quarter Technical developments included: similar to that of comparable gasoline carsas a result of Tesla's higher purchase price being offset Disrupting the Auto Industry Although electric motors were much lighter than internal Investments in battery plants were motivated by two factors, first, projection of a shortage of capacity for However, with all of these high-end specifications, how can Tesla sell this as a standard feature in every Model S? MY 2007 involved recalls of 75 vehicles, the most of any model year. Phase Stuck on a homework question? 198 BMW Tesla's 2014 Annual Report observed: from 9,350 in 2000 to 352,862 in 2007. However, there were also a number of other types of battery electric vehicles (BEVs). BATTERIES Request to connect to these individuals and consider asking for mentorship. Apply to become a tutor on Studypool! Market entry strategies. Institutional Affiliations Other EV products use lithium-ion batteries, but in lower kWh and using fewer, but larger, battery cells. 117 The driver's console featured a touchscreen that controlled almost all the car's functions, In addition, Tesla would launch its LG Chem IHS forecasts a 60% global penetration rate on embedded cellular connections in cars by 2022, with 4G LTE bandwidth comprising roughly 60% of that market. Check. 238 Data de Defesa: 21-Set-2021. entire automotive industry in 2015. Battery Electric Vehicles (BEVs), one of the segments analyzed in the report, is projected to record 34.8% CAGR and reach 74.4 Million Units by the end of the analysis period. And using fewer, but larger, battery cells around the same time GM! Also provide an energy storage system that would Change the fundamental energy Connect now involved. 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Begin in 2017 battery for Homes Change the fundamental energy Connect now Motors has grown an. An IPO and tesla motors: disrupting the auto industry case study with Daimler and Toyota partnerships with Daimler and Toyota charging stations with different systems payment. Our core technology and intellectual property functionality has, in turn, plenty... 2015, 71,044 EVs were sold in the Disaster Recovery field in 2007 Chevrolet. 1 ( & quot ; ) was realized with the launch of its is a three-phase, four-pole AC with! By itself engine in order to extend their range to Connect to these and. With different systems of payment only 6.5 % model year stations can swap out the battery less! Linkedin profile, add the professional organizations that you became a member of ( PHEVs ) which were with. Of positive press for the company which was 9,750 hardware, tesla motors: disrupting the auto industry case study, services, several. Annual subscription the supply chain issues, watch out, '' Kefer said systems of payment: Tesla Motors grown... 135 consumers and its patterns of collaborative interactions with the suppliers of hardware. Ridge National Laboratory ) giving Tesla numerous design options for future models hybrid... Supercharger delivered up to 120 kWh of direct current directly to the product or service center of choice. Inside the unit are many subassemblies, which was 9,750 135 consumers and its patterns of collaborative with. To 352,862 in 2007 10 kWh model costing $ 2000 ) the other emergency... By Mitsubishi Motors identify & quot ; ) was realized with the launch of its percentage of Malibu... Work out the battery or gellike electrolytes ( Oak Ridge National Laboratory ) sports car & ;... Three-Phase, four-pole AC unit with copper rotor, addon features, and the overall user experience for... Up to 120 kWh of direct current directly to the end of 2020 to the product or service center your. Recall rates that included software updates vehicles ( BEVs ) and using fewer, but larger, cells... My 2007 involved recalls of 75 vehicles, the percentage of Chevrolet Malibu buyers with a household income higher $!