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    Tesla Case Study: November 2020

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    Retheesh Ravi Kumar
    This document is a one-page summary of a case study about Tesla's entry into the automotive industry through disruptive technologies. Tesla uses advanced vertical integration by developing software in-house and manufacturing batteries through a joint venture. It also offers solar panels and charging equipment. Customers can configure and order cars online and pay by credit card. Cars receive over-the-air software updates and require less maintenance than gas vehicles. However, Tesla faces challenges from limited experience, manufacturing efficiency, and economies of scale as a new industry entrant compared to larger automakers. Critics point to quality issues, though electric vehicles have lower lifetime costs. Tesla generated early losses but its costs should decrease as production increases.

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    Tesla Case Study: November 2020

    Uploaded by

    Retheesh Ravi Kumar
    25 views2 pages
    This document is a one-page summary of a case study about Tesla's entry into the automotive industry through disruptive technologies. Tesla uses advanced vertical integration by developing software in-house and manufacturing batteries through a joint venture. It also offers solar panels and charging equipment. Customers can configure and order cars online and pay by credit card. Cars receive over-the-air software updates and require less maintenance than gas vehicles. However, Tesla faces challenges from limited experience, manufacturing efficiency, and economies of scale as a new industry entrant compared to larger automakers. Critics point to quality issues, though electric vehicles have lower lifetime costs. Tesla generated early losses but its costs should decrease as production increases.

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    One-pagesummary Tesla 16112020

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    This document is a one-page summary of a case study about Tesla's entry into the automotive industry through disruptive technologies. Tesla uses advanced vertical integration by developing software in-house and manufacturing batteries through a joint venture. It also offers solar panels and charging equipment. Customers can configure and order cars online and pay by credit card. Cars receive over-the-air software updates and require less maintenance than gas vehicles. However, Tesla faces challenges from limited experience, manufacturing efficiency, and economies of scale as a new industry entrant compared to larger automakers. Critics point to quality issues, though electric vehicles have lower lifetime costs. Tesla generated early losses but its costs should decrease as production increases.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    25 views2 pages

    Tesla Case Study: November 2020

    Uploaded by

    Retheesh Ravi Kumar
    This document is a one-page summary of a case study about Tesla's entry into the automotive industry through disruptive technologies. Tesla uses advanced vertical integration by developing software in-house and manufacturing batteries through a joint venture. It also offers solar panels and charging equipment. Customers can configure and order cars online and pay by credit card. Cars receive over-the-air software updates and require less maintenance than gas vehicles. However, Tesla faces challenges from limited experience, manufacturing efficiency, and economies of scale as a new industry entrant compared to larger automakers. Critics point to quality issues, though electric vehicles have lower lifetime costs. Tesla generated early losses but its costs should decrease as production increases.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    See discussions, stats, and author profiles for this publication at: https://www.researchgate.

    net/publication/345919850

    Tesla Case Study

    Chapter · November 2020

    CITATIONS READS

    0 6,498

    1 author:

    Mario Glowik
    Hochschule für Wirtschaft und Recht Berlin
    53 PUBLICATIONS   91 CITATIONS   

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    Some of the authors of this publication are also working on these related projects:

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    All content following this page was uploaded by Mario Glowik on 16 November 2020.

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    Professor Dr. Mario Glowik February 2020

    One-page summary of the case study titled: Disruptive technologies applied


    in the automotive industry. The case of Tesla (Inc.)
    Forthcoming: Glowik, M. (2020). Market entry strategies. Internationalization theories,
    concepts and cases (third edition). Berlin and Munich: De Gruyter Oldenbourg

    Electric cars consist of less components than conventional cars, which helps Tesla entering
    the automotive industry through advanced vertical integration. Why? The software of the car
    is mainly developed in-house at Tesla. The battery, which serves as the most valuable
    component in an electric car, is manufactured together with Tesla’s joint venture partner
    Panasonic. In parallel, Tesla offers car charging equipment, with or without solar panels, for
    private house owners. The client can configure and order its individual car model via Tesla’s
    web page. The payment of the new car is possible through credit card. Customers are allowed
    to return its individual, newly purchased car for a full refund within seven days or 1,000 miles
    of the car usage. Whereas conventional car makers generate considerable part of their profits
    through maintenance service, owners of a Tesla electric car do not need to regularly show up
    their cars at the garage for maintenance, oil and break changes etc. Software updates of a
    Tesla car are made “over the air” (from a distance). Car accidents in the past should not be
    ignored but, today Tesla is ahead of the automotive industry in terms of autonomous driving.

    Major challenges (as typical because of the “disruptive technology” and “industry newcomer”
    status) for Tesla are related to limited experience curve effects, efficient car manufacturing,
    and low economies of scale because of the relatively small number of cars manufactured by
    Tesla so far (with limited models/ vehicle platforms) compared to market incumbents. Critics
    target marginal quality and rather low efficiency and productivity of Tesla’s car
    manufacturing activities in recent years. Whereas the lifetime and the maintenance cost of
    Tesla electric vehicles (e.g. no exhaust systems, no engine oil, much lesser break wear etc.)
    obviously are superior to conventional cars, some customers still complain poorly fitting trim
    and car body gap mass as well as glass and paint quality issues. Consequently, Tesla
    generated losses at the beginning of its operations, while at the same time, collecting
    considerable subsidies (as for example as it was the case for its Giga-factory in Nevada).
    However, the more cars are produced by Tesla, the higher the variety of models offered (using
    the same vehicle platform) the better prerequisites for generating economies of scale as well
    as for improving the quality and, thus, generating profits.

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