Tesla Car is an American electric vehicle and clean-energy company, co-founded by eccentric billionaire and current CEO, Elon Musk. Unlike their traditional counterparts, Tesla has a truly unique blend of scorn and admiration alike through its many years of operations. It’s a company that specializes in electric vehicle manufacturing, battery manufacturing and manufacturing of energy storage solutions from the scale of the home to the grid. Through the purchase of Solar City, has started manufacturing solar panels and solar roof tiles.

Tesla’s aim and mission remain, and as we quote, to “accelerate the world’s transition to sustainable energy.” A company such as Tesla, however, understand very well that such a transition or rather, a paradigm shift in the technology we use every day cannot occur simply by the existence of a new product in an immense market. For people to be convinced of the electric potential, electric cars would need to be quicker, more fun to drive and at the same time a lot safer than their gasoline counterparts. Today, with the incredible sale numbers, pre-orders and excitement that ensues every time Tesla launches a new product, it is more than apparent that Tesla delivers on all of the aforementioned, and more.

Today, Tesla owns and operates multiple production and assembly plants, including its main vehicle manufacturing facility in Fremont, California, Giga Nevada in Reno, Nevada, Giga New York, in Buffalo, New York and Giga Shanghai, China. Tesla also manufactures and sells cutting edge products across multiple sectors with the Model X, Model S, Model 3 and the upcoming Model Y in the automotive space as well as Powerwall, Powerpack and Megapack batteries, solar panels and solar roof tiles. However, Tesla wasn’t a multi-billion-dollar company with multiple giant factories and diversified offerings from day one.

EARLY DAYS

Tesla was incorporated in July 2003 with Elon Musk acting as the chairman of the board, provisioning 98% of the initial funds to the company and appointing Martin Eberhard as the first CEO of the then Tesla Motors Inc. Tesla Roadster, a low volume but high priced car was the first product to roll out of the Tesla factories, followed by upcoming models: Model S and Model 3. Musk financed most of the company in its early days through his personal wealth with the third and fourth financing round seeing investments from prominent entrepreneurs such as Google co-founders Sergey Brin & Larry Page, former eBay President Jeff Skoll, Nick Pritzker, JPMorgan Chase, etc., bringing the total investments to ~ 105 million dollars through private funding.

STRATEGY

Tesla Car

It is no secret to anyone that when Tesla launches a product, opinions regarding the same remain divisive at best. On the one side, critics call out Elon Musk as being a person who is no longer in touch while supporters, on the other hand, grab the first opportunity they get to put their preorders in. However, a point where neither the critics nor the supporters disagree on is that Tesla has changed the face of the auto industry forever.

Though IC Engines have dominated the industry for about a century, considering global, environmental as well as business factors, that trend seems to be rapidly changing in favour of electric cars. This is verified as we find more and more traditional automakers like Mercedes, Audi, Porsche, etc giving electric cars a very important place in both their future roadmap as well as their present product lineup.

While it is not uncommon to find people’s opinion about Elon Musk generally pointing at the direction of being unhinged, the start of 2020 saw Tesla being the best performing automaker worldwide which leads to the conclusion that there must be a fair bit of calculation in all the madness. Tesla has two very important factors going for them – the number of resources they allocate for the upkeep of existing products and bold headline-grabbing moves that rightfully cement Tesla as a company driven by innovation.

Elon Musk masterfully creates an impression of excellence, innovation and the future in his product launches with the originality of Tesla’s concepts. He goes another step forward in bringing the prototype physically out on the stage and proceeding to demonstrate its features, performance and the general look and feel for the entire world to experience. This is demonstrated by the recent Cybertruck launch wherein he drove out with the actual product he is trying to sell instead of just talking about it or showing concept images. Taking it even one step further, he amplifies said impression through social media which keeps the buzz about the product alive and the excitement about the same high amidst the general populous.

Along with all the aforementioned, he also does not spare a cent to ensure that the currently existing products continually get performance improvements through over-the-air software updates as well as the city infrastructure of supercharging stations, that complement the usability and convenience of driving Tesla’s on the road, continue increasing in number, becoming more and more accessible in the process.

Staying ahead of the curve with cutting-edge technology also prevents the said technology from being replicated in some way shape or form and sold for cheaper in the market. Tesla ensures this by maintaining its intellectual property as well as through the acquisition of other companies developing relevant products to stay ahead of the game. This is evident by Tesla’s acquisition of Maxwell Technologies (a company manufacturing high capacity ultra and supercapacitors and other electrical energy storage equipment) and huge resource allocation on battery research, gigafactories for their manufacture and partnerships with already established companies in the same field.

All of the above prevents other firms from replicating Tesla’s innovations, keeping their product line exclusive and relevant, keeping the buzz alive in potential customers, offering excellent post-sale service on existing products as well as boosting the convenience of using anything Tesla, establishing a very positive name for the brand in the process – a strong recipe for success.

TECHNOLOGY

Technology is quintessential when it comes to setting a product apart from the rest in the market and truly leaving a mark on the convenience it delivers in the minds of the customers using the same. Tesla has made some really long strides in the technology department that have found incredible utility in making its electric cars such an in-demand product today.

In the battery department, Tesla currently has research ongoing at the Dalhousie University in Nova Scotia, Canada, featuring lead researcher Jeff Dahn to further improve their battery technology. It has also collaborated with Panasonic which is currently their sole supplier of batteries for the Model S, X and 3. Despite the aforementioned, one of the biggest challenges regarding battery power is their cost per watt. Elon Musk has, however, stated that by 2020, batteries would cost 100$/kWh.

A key selling point for a Tesla in the tech department is their autonomous driving feature. Every Tesla sold today comes with a suite of inbuilt sensors and Graphical Processing Units as standard, that serves as the hardware behind the still-in-development autopilot features. In April 2019, Tesla announced that all of its cars will include Autopilot as a standard feature while other features such as Navigate on Autopilot (Beta), Auto Lane Change, Autopark, Summon, Smart Summon, etc would be an added cost option.

Along with R&D on technologies relevant to the automotive space, Tesla has also launched several other products in the domestic and industrial space such as Powerwall home and Powerpack industrial battery packs which has already seen incredible enthusiasm and adoption all around the world with orders valued at 800 million dollars. In the energy generation department, Tesla also manufactures solar panels and roof tiles with proprietary glass technology, containing embedded solar collector, and are one-third lighter than standard roof tiles.

CONCLUSION

What Elon Musk and Tesla have been able to create is an impact large enough to rearrange the automotive space forever. Their multi-pronged strategy of changing an industry which has fundamentally remained the same for the better part of a century is fascinating to explore and understand. Hence, no matter your opinion regarding Elon Musk as an individual or Tesla as a company, the study of their strategy and the consequent impact it is already having contains an enduring lesson for all innovators and entrepreneurs alike, regarding how to develop a compelling product or how to make a product compelling in an extremely niche and competitive market space.

4 COMMENTS

  1. Hi, the Tesla – The Best Electric Car In The World article it is well written and was a pleasure to read it.

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