Tesla car<\/span><\/strong><\/p>\nThe Tesla Roadster is a staggeringly quick car with a dif- ference. There\u2019s no wheel-spin, no traction control stutter, no driveline shutter. As soon as one stamps on the throttle the driver gets 686 lbs of torque immediately, rocketing the car from 0\u201360 mph in 3.2 seconds and with negligible noise \u2013 the car is electric.<\/p>\n
The Tesla Roadster is the main product of Tesla Motors. Its charismatic chairman and main funder is PayPal co-founder, and SpaceX CEO, Elon Musk. Barely a dec- ade old, Tesla Motors is already gigantic, $33bn (\u00a320bn, \u20ac25bn) market capitalisation and adored. It\u2019s been called \u2018the world\u2019s most important automotive company\u20191\u00a0and the Tesla\u2019s Model S, \u2018the Most Loved Vehicle in America\u20191\u00a0\u2013 out- selling Mercedes S-class and BMW 7 series. And yet the last successful American car start-up was Ford, founded 111 years ago. How can Tesla Motors be so successful?<\/p>\n
Tesla is the brain-child of three Silicon Valley engineers convinced by global warming arguments and looking for alternative fuel sources for cars. Co-founder Martin Eber- hard asked: \u2018How much of the energy that comes out of the ground makes your car go a mile?\u20191 He observed: \u2018Hydro- gen fuel cells are terrible \u2013 no more efficient than gas. Electric cars were superior to everything.\u20191 He then discov- ered a bright yellow, all-electric, two-seater bullet car with zero emissions, \u2018tzero\u2019, built by AC propulsion. Inspired, Eberhard kept saying to potential recruits \u2013 \u2018try and touch the dashboard.\u20191\u00a0He would then hit the accelerator \u2013 they couldn\u2019t! With Lamborghini-level acceleration, this demon- strated electric cars didn\u2019t have to be golf carts.<\/p>\n
But industry logic said electric cars would never suc- ceed. GM spent $1bn (\u00a30.6bn, \u20ac0.75bn), developing the EV-1 which was then scrapped. Battery technology had not improved in a hundred years. But Eberhard realised lithium-ion batteries were different \u2013 improving 7 per cent p.a. So Tesla was positioned to ride the current of tech- nological history.<\/p>\n
The founders had no experience making cars, but real- ised car companies now outsourced everything, even styl- ing. Manufacturing partners were ready to be connected with; a \u2018fab-less\u2019 car company was possible.3 Production began 2008. The business plan described the Roadster as \u2018disruptive\u2019 technology 1 \u2013 a high-end sports car with lower price and emissions than competitors \u2013 and a lower resource cost to the planet.<\/p>\n
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\nRoadster<\/strong><\/h4>\n0\u201360 mph < 3.9 seconds; 100mpg; world-class handling; zero tailpipe emissions; 300 mile range; zero maintenance for 100,00 miles (other than tyres); 50% price of the cheapest competitive sports car.1<\/strong><\/h4>\n<\/blockquote>\n <\/p>\n
Tesla\u2019s strategy was:<\/strong><\/h2>\nTo enter at the high end of the market, where custom- ers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model all free cash flow is plowed back into R&D to drive down the costs and bring the follow on products to market as fast as possible. When someone buys the Tesla Roadster sports car, they are actually helping pay for development of the low cost family car.<\/p>\n
2 Tesla aimed to provide zero emission electric power gen- eration from their \u2018giga\u2019 battery factory in line with their \u2018overarching purpose to help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy.\u2019 2 In 2015, Tesla Energy was launched selling batteries for home and business use. Edison didn\u2019t invent the light bulb, but he made it affordable and accessible through his electric system.<\/p>\n
3 Tesla is also offering an energy system for a world of elec- tric vehicles, homes and businesses, using batteries.<\/p>\n
Questions<\/span><\/strong><\/h3>\n\n- How does Tesla Motor\u2019s strategy fit with the various strategy definitions in Figure 1.1?<\/li>\n
- What seems to account for Tesla\u2019s success?<\/li>\n<\/ol>\n
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