Pre Course Assignment- Business and Global Society - Adnan Ahmed

Collaborative Innovation by Tesla

One sector that has contributed the most towards CO2 emissions worldwide is the

transportation sector. Automakers are mostly powered by fossil fuel. Moreover, because of

the environmental constraints levied by governments and the impending depletion of oil

reserves, automotive companies are seeking to implement new environmentally friendly

technologies.

One automotive company more than any other recognized this gap in the market, and it

was Tesla. Also, turned to collaborative innovation to achieve success. They have achieved a

lot in 16 years since their inception in 2003. Tesla’s success so far is not its electric car but

rather the collaborative innovation practices it has followed. Tesla manufactures its Electric

Vehicles but also acts OEM (Original Equipment Manufacturer), the production of power

train components that other companies can buy and use under their own brand names.

Tesla Motors has set up collaborative partnerships with many firms. Firstly, some of its

supplier alliances are Lotus Cars and Panasonic. Also, the R&D departments of Tesla Motors

and Panasonic cooperate for the developing of more efficient batteries.

Tesla did not develop its vehicle from scratch; it held a design competition for it. The

winning team in the competition was Lotus. Since then Lotus and Tesla have a close

relationship. There was a reason for Tesla to pursue this route because, at the time they did

not have a manufacturing facility of its own, they could use the factory of Lotus which Tesla

could use to produce its first electric vehicle. Tesla also avoided the storage cost of the new
Pre Course Assignment- Business and Global Society - Adnan Ahmed

cars. In addition to this since the Lotus Elise shared the same platform as the first Tesla

Roadster, Tesla was able to reduce the cost by using the same platform which also means

they did not have to invest time in crucial safety systems and structures of creating a new

platform themselves. Using the Lotus platform saved them valuable setup resources and

also sped up the process of launching a new car in the market. Lotus has continued to help

Tesla innovate and design new platform’s for

In addition to an alliance with Lotus, Tesla also collaborated with Panasonic to produce the

battery, one of the most critical components and core innovations of its electric vehicle.

After signing a supplier agreement in 2009, Panasonic invested 30 million dollars in Tesla.

The collaboration between Panasonic and Tesla Motors has also lead to an agreement of

R&D collaboration for the developing of next-generation automotive-grade battery cells.

This new battery cell is based on nickel chemistry, and it is specifically optimized for EVs.

The partnership of both of these companies led to the most efficient and longest range

battery pack on any electric vehicle on the market.

Tesla has proved that to be successful a company should collaborate with entities on the

outside and inside in order to make the best use of the ideas and innovations available

outside and inside the company. Furthermore, in a globalized market where competition is

very high, it is challenging for a new entrant to enter the market and succeed. By

establishing these collaborative partnerships, Tesla was able to share their know-how and

also innovate on existing technologies in collaboration with these companies.

Pre Course Assignment- Business and Global Society - Adnan Ahmed

Bibliography

Chiaroni, D., Chiesa, V., & Frattini, F. (2009). The Open Innovation Journey: how firms
dynamically implement the emerging innovation management paradigm. Technovation , 31
(1), pp. 34-43.

Chesbrough, H., & Crowther, K. (2006, June). Beyond high tech: early adopters of open
innovation in other industries. R&D Management , 36 (3), pp. 229-236.

Belderbos, R., & Faems D, L. B. (2010). Technological activities and their impact on the
financial performance of the firm: Exploitation and exploration within and between firms.
Journal of Product Innovation Management , 27 (6), 869-882.