Tesla Motors: The EV Challenge

Description

In early 2016, Tesla Motors was the center of attention of many events in the automotive industry. During those days, Model S –a 100% electric luxury sedan– was under production and the firm had just launched Model X, an edge technology sport utility vehicle. In March that year, the company introduced the expected Model 3, a more affordable vehicle targeting a more massive market. With just 12 years in the market, Tesla Motors went from being the object of mocks and criticism from many experts in the industry, to a respected company and a figure of cult for many people. Nevertheless, despite their achievements and the fact of having been the first automaker going public since Ford did so in 1956, there were still serious doubts about whether this small Californian manufacturer could actually replicate or even exceed the work done by the major American, German or Japanese manufacturers. Based on a different business model and value proposition, Tesla was trying to change the world producing electric vehicles that matched or had better performance in comparison to the internal combustion ones. However, it was undeniable that the cost of the project was high, and it resulted in the constant losses the company reported to investors.

Keywords

Innovation operations strategy Technology Vertical integration