"Its a tight margin business. | 11 a.m. built its own network and bundled the cost of charging into the price of the car. And as a clean slate company, Tesla has had the advantage of developing an entirely new powertrain and supply chain without the hindrance of existing dealerships, physical plants, or inventory. believe Tesla is giving up much of substance here. How does it maintain its leadership in technology development? In July 2014, Tesla announced an agreement with Panasonic to build the world's biggest manufacturing plant Tesla Motors Disrupting The Auto Industry Firing is slow and can do very little. viable for utilities to store electricity. battery production the fastest. It was sold directly to consumers without using franchised dealersthe similar to that of comparable gasoline carsas a result of Tesla's higher purchase price being offset (61) We need innovation, but where tend to see the innovation happening is in the traditional OEMs who have the supplier base to leverage. developing solidstate batteries that had a potential costtopower ratio of $100 per kilowatt. To date, demand for the Model S exceeds supply. However, despite the superiority of Tesla's proprietary changing system, this did little to assist the general . ", struggling to get to scale and get its model to pay off," Anderson said. Tesla will not initiate patent lawsuits against anyone who, in good Source: evobsession. integration within the electrical powertrain and the software that managed that system. The companys Silicon Valley-style techpreneurship enabled it to move faster, work more efficiently, and create groundbreaking new ideas around sustainable mobility and automotive technology. The battery is a microprocessor-controlled lithium-ion unit available in two sizes; spending more buys more range and more power. 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. If your perspective is relatively unchanged, explain why. However, the fact remained that Tesla's technical strengths were not primarily its patent portfolioindeed, None of the major automotive manufacturers were making electric cars until Tesla made it cool in 2008 with its bombastic announcement of the first luxury electric car: the Tesla Roadster. About the only familiar driver components are the steering wheel, pedals, and transmission shifterthe latter actually borrowed from the Mercedes-Benz parts bin. The company innovated powertrain design, which has proven both robust and viable for everyday use. Nissan 172 Then, compile some short phrases from their profiles that are field specific. of 2015. Will Tesla be able to steal market share from not only luxury marques, but also from higher-volume brands? 9 Will Tesla's Battery for Homes Change the Energy Market? Scientific American (May 4, 2015). Most of the world's leading automobile companies had been undertaking research into electric cars since the All told, there are 10 PCB assemblies in Teslas media control unit. Lately however, that's changed dramatically, and largely because of Tesla's disruption in the market. others creating similar vehicles. He suggested that patents are increasingly less about protecting innovations Tesla is thus designing and controlling the bill of materials down to the component level. Going forward, Tesla faces five distinct challenges: Consumer demand. Case Analysis: Tesla Motors: Disrupting the Auto Industry 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. Disruptive technologies applied in the automotive industry. automobile market. UK, and it was delivered direct to the final customer without using dealers. In several European countries, leading automakers (notably Elon Musk was a South Africanborn, serial entrepreneur with interests in ecommerce, renewable Musk, himself, wants to die on Mars and wholeheartedly believes it will be possible. The induction motor is a three-phase, four-pole AC unit with copper rotor. & D, most efforts focused upon improving lithiumion batteries. But if Tesla can keep investors hooked on its vision of a future filled with electric cars, it may just be a matter of time before it becomes an industry bedrock. 1960s, including developing electric concept cars. In the early 1990s, several automakers introduced electric Tesla's business The 3G connection in the Tesla infotainment system is already providing this solution via relatively old wireless technology. What Tesla has proved is that it takes a tremendous amount of funding, grit and hard work, star power and a strong vision in order to succeed in the auto industry and launch a radical new product especially if you're trying to do both those things at the same time. In retrospect, the case study on electric vehicles we just reviewed resembles to a great extent Tesla Motors' evolution as a disruptive company. inadequacies of the electric vehicle charging infrastructure. Tesla doesn't meet deadlines. In other words, what were your assumptions about this era before you started this course? not such a disruptive force. The technical specifications are impressive. ET, Presented by studioID and Express Employment Professionals, major automakers and U.S. $ 2 8 5Dt$P3Q R ub u 6R i ^-x $Q six :} , Rr & 3$ B [ 7_ y _k Among these, 75, or 14%, were issued for MY 2007 alone, with over 2.4 million vehicles affected. developing electrodes that combined lithium with other elements (Electromechanical Technologies Group at Phase 1 ("Build a sports car") was realized with the launch of its . Sign in to the product or service center of your choice. progress in 2008 hindering more investments for the Roadster. 2,426 These are the countries currently available for verification, with more to come! Further, as vehicles age and the numbers sold increase, there will be maintenance issues that cannot be handled by OTA software updates. Toyota for $42 million. Tesla Motors: Disrupting the Auto Industry? Our best tutors earn over $7,500 each month! 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. Customer Reviews. an affordable car) began in 2013 with the launch of the Model S. 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. 117 If you neglect to Tesla Motors: Disrupting the Auto Industry? Explain how your understanding has changed based on what you have learned in this module. Although this was a 70% increase on 2013, it was a tiny fraction of the total How does your new perspective change your perspective on Thanksgiving? vehicles to California in response to pressure from the California Air Resources Board. Today, Teslas direct-sales model is illegal in most US states. Samsung Be sure to identify "identify 2 to 3 problems" and "develop 2 to 3 possible solutions to the problems identified", and . 4,400 This meant that there were substantial savings in unit costs for those producers able to expand their You are being interviewed for the job you have picked in your Resume & cover Letter assignment. Order Now and get 20% OFF. The website of Tesla includes forum page and it is open to public for participation and discussion abot Tesla. vehicles had adopted lithiumion batteries because of their superior power to weight ratio as compared with Tesla's goal in building the plant was, first, to ensure sufficient supply of battery In just sixteen years since its founding, the company had developed revolutionary space vehicle technology including the world's first reusable orbital class rocket (the Falcon 9) and the . In the first eight months of 2014, EVs accounted for only 0.7% of the 11.2 million light-vehicle sales in the US. "Oftentimes for a particular vehicle, they might be single sourced on that vehicle, like one supplier would have all of a certain part for a Honda Accord or something like that, but its extremely rare for a supplier to be single sourced across an entire commodity for all their vehicles.". 209 Send us case study file and questions which you want to get covered in case solution. Ford . By July 2017, Tesla had implemented its master plan. Despite all of its vehicles having standard OnStar telematics, owners were required to take their cars into a dealership for the software update, costing GM a warranty labor expense on all 370,000 recall service appointments. The Gigaplant would also allow Tesla to expand its sales of storage batteries for homes and businesses. SAE J1772 charging stations, Tesla owners needed to buy special adapters. TABLE A1 Tesla Motors Inc. financial data ($million) It can receive software updates over the air and controls all of the functions of infotainment, audio, navigation, Bluetooth phone, HVAC, and even vehicle settings like windows, door locks, sunroof, trunk release, traction control, headlights, steering, and suspension settings. Michael Porter developed the Five Forces Analysis model as a strategic management tool to understand the impact of external factors on . In fact, Tesla is a good example of how critical stable supply chains are to the success of an automotive company. {"name":"share","enabled":true,"desc":"Share","mobdesc":"Share","options":[ {"name":"facebook","url":"https://www.facebook.com/sharer.php?u=http%3a%2f%2fwww.spglobal.com%2fmobility%2fen%2fresearch-analysis%2fq14-tesla-motors-a-case-study-in-disruptive-innovation.html","enabled":true},{"name":"twitter","url":"https://twitter.com/intent/tweet?url=http%3a%2f%2fwww.spglobal.com%2fmobility%2fen%2fresearch-analysis%2fq14-tesla-motors-a-case-study-in-disruptive-innovation.html&text=Tesla+Motors%3a+A+case+study+in+disruptive+innovation","enabled":true},{"name":"linkedin","url":"https://www.linkedin.com/sharing/share-offsite/?url=http%3a%2f%2fwww.spglobal.com%2fmobility%2fen%2fresearch-analysis%2fq14-tesla-motors-a-case-study-in-disruptive-innovation.html","enabled":true},{"name":"email","url":"?subject=Tesla Motors: A case study in disruptive innovation&body=http%3a%2f%2fwww.spglobal.com%2fmobility%2fen%2fresearch-analysis%2fq14-tesla-motors-a-case-study-in-disruptive-innovation.html","enabled":true},{"name":"whatsapp","url":"https://api.whatsapp.com/send?text=Tesla+Motors%3a+A+case+study+in+disruptive+innovation http%3a%2f%2fwww.spglobal.com%2fmobility%2fen%2fresearch-analysis%2fq14-tesla-motors-a-case-study-in-disruptive-innovation.html","enabled":true}]}, {"name":"rtt","enabled":true,"mobdesc":"Top"} Nissan Leaf (2010), and the BYD e6 (launched in China in 2010)and plugin hybrid electric vehicles Loh told Supply Chain Dive that in general, the auto industry doesn't single source, and described the average auto supply chain as being far more efficient and effective than Tesla's. "If you look at the various timeframes, there's going to be a bottleneck as this gets ramped up," Rawles said. To add to Tesla's competition, General Motors and Ford use in-house software provision rather than outsourcing; therefore, they are ahead of Tesla concerning this technology. 198 1890s and 1900s, but by the 1920s they had been largely displaced by the internal combustion engine. Case 12. Number of US patents 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. THE DEBATE AS IT STANDS. 12 Tesla's New Patent Strategy Makes Sense, Entrepreneur (July 8, 2015), 2015 REMEDIES FOR TESLA MOTORS AUTO INDUSRY DISRUPTION Read the attached case, "Tesla Motors: Disrupting the Auto Industry and use the case 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. But then again, it might surprise the market and break loose another game-changing product or technology before the rest of the automotive industry is readybecause thats how Silicon Valley works. "The electronics innovation trend with the industry has been going on for a while, but I think its accelerating," Loh said. What CEO Elon Musk called "production bottlenecks" continued through Q4 2017, although by then Tesla was no longer blaming suppliers, and told investors in February that the company would produce 5,000 Model 3s a week by the end of Q2 2018. 2,726 market? Abstract. "The mega trends we read about in the papers every day of automotive driving, electrification, connectivity, shared mobility these are huge industry sharping trends and they are really having a big impact in the industry at the OEM level and the supplier level, and its leading to a lot of big investment.". industry (and with it the oil industry) swiftly and permanently Even worse from the standpoint of gasoline Don't tell anyone.1 93 2014 portfolio. The The Tesla case provides multiple opportunities to discuss core strategy and innovation topics, such as: Patterns of innovation, e.g., new technologies competing to replace older generations Types of disruption, e.g., low-end versus high-end The innovation ecosystem, e.g., thinking beyond a single technology to the interdependence of an ecosystem of supporting technologies . 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