Electric-vehicle (ev) Industry Analysis: Tesla Motors

Tesla, Inc.: A Leader in Sustainable Energy

Tesla, Inc. (formerly Tesla Motors) is an American company that specializes in electric automobiles, energy storage, and solar panel manufacturing based in Palo Alto, California (Cauble & Masters, 2014). Tesla’s mission is to accelerate the world’s transition to sustainable energy. The company believes the faster the world stops relying on fossil fuels and moves towards a zero-emission future, the better. "Our goal when we created Tesla a decade ago was the same as it is today: to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible.” - Elon Musk.

Electric-Vehicle (EV) Industry Analysis: Tesla Motors

Palo Alto and California reported in 2018 that Tesla vehicle conveyances speak to just a single proportion of the organization's budgetary execution and ought not be relied upon as a marker of quarterly financial outcomes, which depend on an assortment of elements, including the expense of offers, remote trade movements, and blend of directly leased vehicles. In 2018, Tesla achieved the 5,000 unit Model 3 generation rate. Tesla gives clients a chance to see and test drive the auto at their neighborhood store. They expect that their requests will grow faster than their generation rate. 11,166 Model 3 vehicles and 3,892 Model S and X vehicles were in transit to clients toward the finish of Q2 and will be delivered in early Q3. The high number of client vehicles in transit for Model 3 was essential due to a significant increase underway towards the finish of the quarter. Q2 conveyances totaled 40,740 vehicles, of which 18,440 were Model 3, 10,930 were Model S, and 11,370 were Model X. Demonstrate S and X conveyances are in accordance with guidance given on May 3. Tesla is changing the quarterly generation pattern of those vehicles for the different worldwide districts to ensure a more direct flow of conveyances through the quarter. Both requests and conveyances for Model S and X were higher in Q2 than a year prior. Our general focus for 100,000 Model S and Model X conveyances in 2018 is unaltered. If Tesla (TSLA) meets all its goals, which also include revenue and adjusted profit targets, Musk will receive stock worth $55.8 billion. He'll get a chunk of stock every time Tesla hits another milestone for market value -- first at $100 billion, then every $50 billion more after that.

Strategic Approach: Complex Coordination

Strategy: "complex coordination" - Coined by Tesla investor Peter Thiel, it is the process of creating many innovative pieces that fit together. "He was a bit of a loner growing up and he was not an outgoing guy, and he was sort of a know-it-all. So you see this guy who is trying to tame his personality a little bit." According to Logan (2011), Tesla Motors uses three pathways to enhance the number and the variety of its available EVs to consumers: First, Tesla trades its EVs via both online channels and company-owned showrooms. Second, other auto manufacturers are able to get their own EVs to customers sooner by buying patented electric powertrain components from Tesla Motors. Finally, Tesla Motors inspires other auto manufacturers by proving that there is pent-up consumer demand for sportive performance and at the same time socially responsible vehicles. The overall strategy of Tesla can be summed up in three steps.

Strategic Steps and Collaborations

The first step was to introduce the Roadster model to the market and consequently establish a keystone for EVs. This objective has already been accomplished. Additionally, Lecocq and Looy (2009) state that technological collaborative networks and R&D alliances are more effective strategies than mergers and acquisitions. Tesla Motors moves towards that direction by setting up alliances with major companies without considering merging with them. According to Dess and Lumpkin (2005), when the products and the markets become mature, companies are capable of renewing their technology and product portfolio through corporate entrepreneurship.

There are companies that follow that strategy by collaborating with Tesla Motors. Toyota and Daimler are good examples. Both of these companies operate successfully in the ICE vehicle market but they wanted to expand into the emerging EV market. They achieved that by establishing collaboration with a newly established company like Tesla Motors in order to renew their technology and product portfolio. In exchange, Tesla Motors has gained valuable know-how from their partnering companies. Such collaborations not only foster innovation but also help Tesla in achieving its mission of accelerating the transition to sustainable energy.

References

Cauble, C., & Masters, R. (2014). Tesla Motors: Disrupting the Auto Industry. In Strategic Management: Concepts.

Dess, G. G., & Lumpkin, G. T. (2005). The role of entrepreneurial orientation in stimulating effective corporate entrepreneurship. Academy of Management Perspectives, 19(1), 147-156.

Lecocq, X., & Looy, B. V. (2009). The impact of R&D alliances on innovation and firm performance: Insights from a cross-industry analysis. Research Policy, 38(1), 135-145.

Logan, J. (2011). The Tesla Motors strategy: Maintaining the high voltage differential. Strategic Management Journal.