BUCHAREST UNIVERSITY OF ECONOMIC STUDIES

Faculty of International Business and Economics

Master Programme: International Business Management

DISSERTATION THESIS

Scientific Coordinator :

Professor Joldes Cosmin

Author :

Nita George-Theodor

Bucharest, 2019
 BUCHAREST UNIVERSITY OF ECONOMIC STUDIES

Faculty of International Business and Economics

Master Programme: International Business Management

[Tesla Motors sale strategy]

Scientific Coordinator :

Professor Joldes Cosmin

Author :

Nita George-Theodor

Bucharest, 2019
 ABSTRACT

From the beggining of the 20th century, company Tesla has been the first and single family name of an
inventor who died almost broke after living most of his life in the mist of his biggest enemy, Thomas
Edison. It is about the brilliant man, Nikola Tesla. Nowadays, this name is equal with innovation and
technological progress, due to the hard work of another great inventor: Elon Musk. With Elon Musk
taking the wheel of charge, Tesla has almost continously preserved a growth on the field of activity,
starting with electric cars and continuing with autonomous vehicles, a true interactive objective followed
by links with some other key players from the industry. Basically, our presented company is composed
from a variety of knowledge having as main purpose replacing the well-known fossil fuel. This paper
sums up also the strategy behind Tesla as domain of interest including both a future practice and a
winning sale strategy merchandised by a true geniune CEO.

Key words:

Tesla; Elon Musk; Sale Strategy; Electric Vechicles; Sales; Alliances

 TABLE OF CONTENTS

Contents
ABSTRACT .........................................................................................................................3

TABLE OF CONTENTS .....................................................................................................4

INTRODUCTION ...............................................................................................................6

CHAPTER 1. THE BACKGROUND OF GREEN TECHNOLOGY.................................9

1.1. History of green technology ..................................................................................9

1.2. Tesla’s historical background .................................................................................10

CHAPTER 2. ANALYTICAL PERSPECTIVE...............................................................11

2. SLEPT Analysis .........................................................................................................12

2.1. SOCIO CULTURAL ..........................................................................................12

2.2. LEGAL ...............................................................................................................12

2.3. ECONOMIC .......................................................................................................12

2.4. POLITICAL ........................................................................................................12

2.5. TECHNOLOGICAL ...........................................................................................12

2.6. DEMOGRAPHIC ...............................................................................................13

2.7. GLOBAL ............................................................................................................13

2.8. PHYSICAL .........................................................................................................13

3. Industry analysis ........................................................................................................13

3.1. Competitive rivalry .............................................................................................14

3.2. Buyer Power........................................................................................................14

3.3. Supplier Power ....................................................................................................15

3.4. Treat of entry.......................................................................................................15

3.5. Treat of substitutes ..............................................................................................16

4. INTERNAL ENVIRONMENT ANALYSIS ............................................................17

4.1. Key Resources ....................................................................................................18

 4.2. Capabilities .............................................................................................................19

4.3. Value Chain Analysis .............................................................................................23

4.4. SWOT Analysis ..................................................................................................26

CHAPTER 3. STRATEGY ...............................................................................................13

5. Core competencies .....................................................................................................28

5.1. R&D of EV Powertrain Components .................................................................28

5.2. Ability to vision the engrowth of the EV ............................................................28

6. Competitive advantage...............................................................................................29

6.1. Proprietary EV Powertrain Component Patent ...................................................29

6.2. Design skills Used to Make Quality Products ....................................................29

7. Strategic competitiveness...........................................................................................29

8. Strategy implication ...................................................................................................31

9. Strategic partnerships .................................................................................................32

9.1. Toyota Motors .....................................................................................................33

9.2. Tesla Motors ...........................................................................................................34

9.3. Battery manufacturers .............................................................................................35

10. Collaborative networks and alliances ......................................................................36

10.1. Networks ...........................................................................................................36

10.2. Alliances - all patents are yours! ...................................................................38

References ..........................................................................................................................41

ANNEXES .........................................................................................................................42
 INTRODUCTION

Our today’s constantly changing economic environment is also expanding it’s margins,
meaning that business companies must ensure a creative process that becomes significant in the
attempt to survive and to come up with some advantages. After a revolution brought by internet,
new markets and technological set-ups, the overall economy has encountered a new tendency,
becoming wide-opened rather than keeping borders closed.

In this newly formed environment, most companies pursue innovative ways in order to
master novel sources of competitive advantages. Some circumstances led the present
environment to quickly evolve from the last century industrial old based economy to the newly
formed economy, the knowledge-based economy. This type of economy has a major role on the
use and dispersion of knowledge, likewise, the innovation process. We use knowledge in all its
present forms, we just know how important is its role in the global economy, and the innovation
process is the main application and apparatus of using knowledge at its best, starting with
research and finishing with development. These terms are somehow adoptions of novel
applications.

However, in today globalized world, companies cannot rely on internal knowledge

anymore, but they need to collaborate with actors from the external environment.

The subject of this thesis is going to reveal the sale strategy of the American electric
vehicle company Tesla Motors, Inc. (TSLA).

My motivation for writing this thesis stems from several factors, pointing out that I really
enjoy technology and someday we could encounter an oil extinction.

The automobile industry is a highly cyclical business. Personal, I never knew the initial
value offered by the craftmanship in the automotive industry. Guess I’m not the only one but
this is not the main point of interest.

The industry is closely tied to economical cycles and prices, and macro factors need
therefore be analysed carefully to determine the future potential of the industry. Compared to
the traditional segment, the alternative fuel segment benefits from increasing oil prices but are
highly dependent on the political and technological environment in terms of supporting
government initiatives and innovations that can drive down vehicle prices.

Tesla is the youngest automobile company publicly traded and has outperformed many
players in the industry. If Tesla’s technology can challenge the notion of a “car” while also be
socially beneficial, I believe the company will be an interesting contribution to a rather mature
industry.
 CHAPTER 1. THE BACKGROUND OF GREEN TECHNOLOGY

Green technology is a recent phenomena, it developed when humanity found out that
the environment is vital for our existential way. „Green” means zero-emissions, it’s a less
known fact that the automobile industry poured tons of money into a campaign to diminish
carbon dioxed emissions. This is how they would like to compensate for the fossil fuel
extinction. We still use fossil fuel, but it will vanish completely by the year 2050 (the author
Paul Roberts argues this in his book called „The End of Oil” ) and everybody will then plug-in
their cars and any automatization made possible by fuels will become electric, at least this is
how my future view resembles.

1.1. History of green technology

I choosed Tesla as main subject for our case study, technically for two reasons, one of
them is the majority and dominance gathered in the electric car industry and, more valuable,
because of the important role it plays in transmuting the world to the sustainable energy area.
After December 2016, Tesla had sold over 190,000 electric cars around the globe (as visited the
official website Tesla n.d.), transforming it in the main and largest rival of genuine electric car
manufacturer of the group Renault-Nissan new-alliance. Here we have to consider, that the
transportation sector is contributing to 15% of the worldwide greenhouse gas emissions in 2011
and almost 26% of the total US greenhouse gas emissions. Tesla is reponsible for almost half
of the global EV battery consumption and whose objective is to produce zero-emission vehicles,
will help reduce greenhouse gas emissions and stop climate change—one of the greatest threats
to humanity in the 21st century. (Burns, 2015)

Back in mammoth-days and way before the industry revolution, most of people were
using the sun as the main source to generate the needed heat. Also, they have used other
energy sources to assist their daily tasks, sources like horses as their mean of transportation,
cows and donkeys as labor force, and phenomena like the wind to move the sails and generate
some sorty of energy. Anyway, since the first introduce of modern steam engine, credited by
James Watt in the 1732, our ancestors found the means and usage for steam. One single steam
engine was very soon becoming a powering locomotive, also a factory and a farm implement,
right after the coal dug and usage in the British mountains.
 Orbiting in the 1800s, people have founded useful and new energy sources, some of
them were able to bring us a billion of convenience, such as the oil and petroleum usage in
processed gasoline as machine fuel and for right back in our days. However, this ease has
brought a lot of energy crisis all around the world today due to the unlikely consumption and a
very-fast end of oil, coal and natural gas resources. They teached us to use them, not to
generate above what we already own. This remembers me of the inventor Tesla, whose tower
was hammerd down, a 1926 invention that could bring free energy and the concept of Wi-Fi,
fully integrated by this genius man, just because some corporate guy couldn’t mount his index
for the consumed energy.

In our days, this clean green technology concept can refer to some different things,
such as sustainable energy, energy conservation, clean energy and waste management.
Anyway, it is hard to search a history specify for green technology in the past. In the 1900s,
there were some energy crisis in the Iraqian zone and things were getting worse in 1973 when
the embargo imposed by the oil producers of Iraq on US led the price of pure oil to rise from
$3 per barrel to a staggering $12 in just one year. At the final of 1974 the average price of 12
$ tripled and almost quadrupled to $45 in 1980.

1.2. Tesla’s historical background

Tesla Motors Inc. is now the number one producer of electric vehicles in the US. This
company is an automotive one, established in the year 2003 by two best Silicon Valley
engineers who got as main objective to develop electric vehicles (Musk, 2006 as cited in
Karamitsios, 2003, p. 16). As one author mentioned, Tesla Motors Inc. is a hybrid formation of
Martin Eberhard and Marc Tarpanning (co‐founders of the electronic book company
NuvoMedia) and Elon Musk (founder of PayPal). We also have as board direct stakeholders
Sergey Brin and Larry Page,the founders of Google and rumored to be the highstake investors
of Tesla. Judging by the circle of influencers who orbit around Tesla, we can say that both
financial and the knowledge sectors are conjured to achieve the main purpose, which is
switching from fuel to electric before reaching 2050 (also correlated to the end of fossil fuel)
(Lehman, 2009, p. 29).

Looking at the strategy of the company, the CEO Elon Musk pointed out in 2006 the
following "The starting point is a high performance sports car, but the long term vision is to
build cars of all kinds, including low cost family vehicles" (Hamilton, 2006 as cited in
Karamitsios, 2013, p. 16).
 Our same author well classified our company strategy in three easy steps. These are
production steps especially. The first step is to introduce the „Roadster” model to the market
and consequently establish a milestone for electric vehicles. As following, in 2012 the new
“Model S” was unveiled to the market and it was pointed in the direction of middle to upper-
middle class consumers. The last step was to produce and market a new model named “Model
X”, designed to break all conventional rules of today’s combustion vehicles” (p. 16 ).

We see that the growing revenue of our company in 2007 it was $ 0.07 million and jumped to
a whooping 116.74 millions after just three years, meaning that Tesla has an enourmous
potential and it is a big fish company. (Aulicino, Waratuke, Williams, & Elliott, n.d.).

Tesla's revenue in 2011 was approx. $205 millions and $413 millions in 2012, waiting to
increase year after year due to necessary imposable costs implied by the giant oil companies.
As it can be observed in one of the annexes (Annex 0), there is a graph regarding how the future
will look for the Tesla Motors company, but this is not mandatory, as just with observatory title
only (at this time only, we cannot predict the future, we can take part of it)

This is an indication that there is a possibility for a new car company like Tesla to become
successful new electric manufacturing company in an already well developed auto industry.
This success can exemplified by the companies first profit record in 2013 on revenues of $561.8
million (Mclvor, 2012). In the same year the company produce a record breaking number of
cars which put the company's shares to be more than $100 mark for the first time. On top of that
a blue print in the success of the organization can be witnessed by the company's ability to pay
its a nearly half billion-dollar loan to the Department of Energy nine years earlier (Hall, 2013).

This ability of the company comes from the successful sale of its new shares in the stock
market (Kershiner, 2013).

CHAPTER 2. ANALYTICAL PERSPECTIVE

We will analyze all aspects of Tesla's affiliation to the true values followed by the current
society. Here is also the environment in which a business can grow harmoniously. That is why
we will observe the key issues followed by Tesla through a SLEPT analysis. Let’s see how
Tesla visualize the world around.
2. SLEPT Analysis
In spite of the fact that there are numerous natural examination models, the SLEPT
methodology of Doole and Lowe (2008) will be pursued to break down the socio/social, lawful,
conservative, political, and mechanical components of Tesla.
2.1. SOCIO CULTURAL

For the most part there is expanding consciousness of ecological wellbeing by individuals
in various pieces of ithe world. Exuding from this mindfulness, ecologically cognizant
individuals are at present utilizing open transportation, biking, and strolling. Such example of
expanding ecological mindfulness prompts expanding enthusiasm for green transportation
which will have a positive condition for Tesla. (Aulicino, Waratuke, Williams, & Elliott, n.d.).
In spite of the positive effect of ecological mindfulness as of now the enthusiasm for EVs is by
all accounts slipping. Refinements in auto carbon discharge and execution notwithstanding the
high cost for EVs among others are the reasons (Hall, 2013).
2.2. LEGAL

In various places on earth, governments are stipulating laws in carbon discharges

guidelines, and guidelines increment cost of gas automobiles. These legislative moves are an
unmistakable sign for the need of elective advances like electric vehicles les (Aulicino,
Waratuke, Williams, & Elliott, n.d.).
In August 2009, former President Obama declared a $2.4 billion give program intended
to make an electric vehicle battery industry in the United States (Bullis, 2012).
2.3. ECONOMIC

Taking a look at the Economical condition it is described by irising fuel costs, expanding
interest for green transportation, expanding reliance like U.S. exceptionally subject to outside
oil. furthermore, U.S. auto imports dwarf trades. These conditions are Causing shift toward
green transportation (Aulicino, Waratuke, Williams, & Elliott, n.d.).
2.4. POLITICAL

Looking the US government move for $7,500 assessment credit for EV buys and the
development to lessen outside oil imports resulting in expanding buy of EVs (Aulicino,
Waratuke, Williams, & Elliott, n.d.)
2.5. TECHNOLOGICAL

Innovatively there are headways to reduce the price of building a fully electric vehicle.
EV battery life expectancy expanding, and key collusions enable firms to join upper hands.
These will enable lower costs and higher quality item (Aulicino, Waratuke, Williams, & Elliott,
n.d.).
Notwithstanding the SLEPT examination it merits thinking about the statistic, worldwide
and common ecological factors all together for having an exhaustive comprehension of the
general condition.
2.6. DEMOGRAPHIC

Demographically, there are developing business sector fragments for green innovation
and expanding interest for green items. This will have a positive effect for the EV market
(Aulicino, Waratuke, Williams, & Elliott, n.d.)
2.7. GLOBAL

Worldwide collusions and fast globalization that outcome in Economies of scale will
lower cost of green advancements. (Aulicino, Waratuke, Williams, & Elliott, n.d.).
2.8. PHYSICAL

Physically, there are increasing interest for automobiles, expanding requirement for
natural insurance and expanding requirement for green advancements. Which have their
positive effect for the improvement of EVs. (Aulicino, Waratuke, Williams, & Elliott, n.d.).

CHAPTER 3. STRATEGY

This chapter is a collection of data, links and ideas that are implied directly into our
company’s sale strategy. Today’s economy is strictly relying on people. Any company must
invest in their customers needs and they need to hear their opinions, like what could be
improved, what could statisfy clients when they use a related product or service or any other
viable source of improvement. Tesla engaged into an innovative project and invested most of
the energy and resources into creating a brand new car, friendly with the envrionment,
affordable in most cases, giving a new perspective to the automobile industry.

3. Industry analysis

To break down the EV business Michael Porter's Five Forces Model will be utilized as
explanatory structure. For Porter (1979) the five Forces are focused competition, purchaser
control, provider control, treat of section, and treat of substitutes.
3.1. Competitive rivalry

As per (Lehman, 2009, p. 42) "Since there aren’t that many EV manufactures on the
market yet, the competitive force exerted by rivals are low. This scenario can change fast. Many
car manufactures are thinking of making EVs. Even though the entry barriers are very high,
there are still car manufactures that got a lot of the same technology to manufacture EVs. The
big difference, and also the key to EVs, is the batteries and the electric engine". With regard to
the battery technology the competitive rivalry could be tough in the future for Tesla since

Product Major players (or Competitiveness

upcoming)

Electric Vehicles Think Direct

manufacturers

Hybrid cars Toyota Prius, Lexus, Audi Direct

Conventional cars GM, VW, Porsche Indirect

lithium-sulfide batteries are believed to have more ability in storing energy than lithium-ion
ones (Bullis, 2012).

In order to look at the competitive landscape of the EV industry Karamitsios (2013)

listed out the direct and indirect competitors of Tesla as illustrated in the following matrix:

The other test as anticipated by Lehman (2009) is "the batteries should most likely hold a
lot of energy as well as being recharged fast. The electric motor has been available for quite a
while and the innovation can be purchased from various manufactures. It is obviously
imperative to get a motor with high performance and which is able to use the power as well as
possible"
3.2. Buyer Power

Regarding the bargaining power of buyers Lehman (2009, p.45) outlined the circumstance
as follows "Even though the customers are the ones who bring the money, their bargaining
power is still low". A similar creator distinguished the EV market has little market specialty
described by clients who are rich and concerned increasingly about green innovation to spare
the earth. Genuine aggressive EV in this market has been acknowledged by Tesla Engines which
is one of only a handful couple of automakers to do that. Such automakers like Tesla have been
distinguished as aggressive in view of their capacity to satisfy the necessities of driving reach,
structure, speed and quickening as adjusted blend in the EV showcase. In opposition to this is
the standard vehicle industry that makes clients more joyful and ground-breaking for a lower
by and large expense. Out there is a spread scope of vehicles with various highlights, better
exhibitions nad focused costs give buyers capacity to influence benefit and consequently
system. For Lehman (2009) the haggling intensity of clients will fundamentally increment from
where it was before (low dealing force) if the EV business will develop in an expanding
rate.(Aulicino, Waratuke, Williams, & Elliott, n.d.)

Accordingly "it is important for Tesla motors to be able to adapt to a higher demand from
the customers. If Tesla Motors want be an exclusive they have to expect the customers to
become more demanding as this market turns from being a niche market into a real market. This
is just like Porsche or Ferrari customers who have a higher expectation to the product than a
normal car a customer has" (Lehman, 2009, p. 45).
3.3. Supplier Power

One of the providers of Tesla are Battery Organizations. As Tesla purchases Li - particle
cells from numerous providers, these organizations are described by low dealing Force. The
other provider is Chassis/Engineering (Lotus) which is known for its high bartering force
exuding from from exclusive partnership and no clear alternative for current market.
Beforehand providers of Transmission like Magna had high bargaining power as Tesla started
in-house production their bargaining power has failed.

As Tesla creates engines, control hardware, and so forth utilizing air conditioning's tech.
the bargaining power of Sotira – body boards has reduced. At long last providers: Lotus –
Chassis and Borgwarner – Parts has high and lowlow bargaining power respectively. (Aulicino,
Waratuke, Williams, & Elliott, n.d.)

3.4. Treat of entry

As per (Lehman, 2009), "the complementors of the EV business are the power industry
just as the oil company. The power inudstry has an incredible enthusiasm for the EV becoming
a success – this will sell more power. Then again is the oil inustry not excessively inspired by
this new vehicle. This will influence one oftheir main sources of income" (p. 44).

The potential new participants and their separate power as shown by Aulicino, Waratuke,
Williams, and Elliott, (n.d.) is that new contestants with comparative advances has low power.
Then again new participants with problematic advancements have high power, these include:
Huge mass-advertise producers (Chevrolet, GM, Toyota), Extravagance execution sports
vehicles (BMW, Porsche, Mercedes), other boutique makers (Italians and Aston Martin). Other
than that Tesla is additionally confronting a few difficulties from the as of now coming none
non-renewable energy source advancements like hydrogen and gaseous petroleum. (Hall,
2013).

The difficulties referenced above are additionally exacerbated by elements like key
move towards gas electric mixtures; the promising belives for power modules than battery
electric vehicles; and the undeniable weaknesses for example driving ranch, cost and recharging
time of electric vehicles is putting them not to turn into a natural replacement for the
conventional cars. (Shirouzu, Kubota, & Lienert, 2013)

A similar creator held that the difficult apparent reality of the market for electronic
vehicles and the declining request that they are confronting is forcing organizations like Nissan
to make key move from progressively green EV speculations into cross breeds. (Shirouzu,
Kubota, & Lienert, 2013)
3.5. Treat of substitutes

As indicated by Lehman (2009) "The other force which is extremely solid is the substitute
items. The biggest business is the vehicle business, yet other alternative vehicles like the half
breed vehicle are likewise substitutes. The vast majority still purchase a typical vehicle, which
of cause makes the vehicle business the biggest contender. It is a result of the substitute items
that the focused power all together is high and still makes the business less appealing. Firm in
the business should at all time pay attention to competitive force, since it can change at record-
breaking" (p.46).

All the more explicitly as pointed out by Aulicino, Waratuke, Williams, and Elliott (n.d.)
half and halves (module and something else), Toyota FT-HS, BMW 1 and 3 arrangement (gentle
crossovers), little execution turbo diesels, little non-mixture sports vehicles, Mazda Miata,
BMW Z4 and Honda S2000 are a portion of the substitute for Tesla. Similar creators
demonstrate the degree and greatness of the bargaining powers of its particular substitutes as
pursues: Tesla faces high bartering force for its $110,000 Roadster from BMW and Mercedes.
A similar circumstance delights in its opposition with Toyota and Honda which register with
$50,000 Model S.

Over the previously mentioned circumstance coming up next are a portion of the
significant signs for the expanding treat of substitutes for Tesla's EVs: First there is a proceeds
with advancement on sun powered cell plan and vehicle power supply necessities like warmer
or cooling (Bellis, 2014). Second there is a key move via car officials in Asia, Europe, and
North America to new alternative energy sources like hydrogen. At long last the move by Nissan
to pursue its adversary Toyota in changing its capacity age for the following huge green-tech
advancement of hydrogen to power and the new unions of Toyota and BMW to create hydrogen
controlled energy component vehicles are the real pointers of aggravated treat for new
innovation. (Shirouzu, Kubota, & Lienert, 2013).

To take credit, there it goes the analysis of the five powers to look at the mechanical
condition of EVs, the three sorts of contenders specifically Immediate, Impending and invisible
contenders of Tesla are concisely summarized by Aulicino, Waratuke, Williams, and Elliott
(n.d.) in the following illustration:

Immediate Competitors
• Think, Aptera, Fisker, Coda, Zap – Direct competitors in EV market
• BMW, Mercedes, Ferrari – Luxury brands, comparable prices
• Toyota – Hybrids successful but not completely green
• Smart – Successful but not intended for luxury or enjoyment

Impending
• Ford, GM, Hyundai, Honda, Etc. – Potential competitors but also potential customers as
Tesla contracts to produce EV components to other manufacturers.

Invisible
• As EV industry grows, more competitors will enter market
• New startups will appear
• Disruptive technologies will appear

Source: (Aulicino, Waratuke, Williams, & Elliott, n.d.)

4. INTERNAL ENVIRONMENT ANALYSIS

A strong strategy comes from the core of the company. Elon Musk anticipated the end
of the oil industry and he dedicated fully to build a strong and reliable electric vehicle. Some
aspects mentioned below are giving him the whole needed credit to get involved into business,
in different sectors on which he operates. Credit is used to build a strong partnership, a long
lasting company and is the core of the business. Some facilities offered by Tesla got noticed by
people who wanted to help Tesla on a common goal: replace fossil fuel with viable electricity.
The global-mobile-social platform got involved, big companies got involved and it seems that
Tesla got the attention of various potential links in order to keep productivity at a high standard.
Here is how the CEO Elon Musk achieved numerous objectives by simply being himself.

4.1. Key Resources

One of the key resources that Tesla possess is the culture of innovation that the company
is identified with from its inception. This kind of culture placed Tesla in a position to have in
custody various patents for EV components. This is best noticed by Tesla's ability to get over
140 patents awarded and over 250 Patents Pending (Witt, 2013).

The other critical asset of the organization is related with its honor winning CEO and Chief
Executive Officer and Product Architect of Tesla Motors, Mr. Elon Musk Chairman of the
Board. He has filled in as President since October 2008 and as Administrator of the governing
body since April 2004. Mr. Musk has likewise filled in as CEO, Chief Technology Officer of
Space Exploration Technologies Corporation ("SpaceX"), which is a company that developing
and launching advanced rockets for satellite and eventually human transportation, since May
2002. Mr. Musk has likewise filled in as non-official Director and primary investor of Solar
City, a main supplier of sun based power frameworks in the US, since July 2006.

Thanks to the contribution of its Chief, Tesla has earned overall acknowledgments for its
accomplishments in its effective activities to be the principal EV organization on the planet
among others. Coming up next are a portion of its honors:

 Automobile Magazine's 2013 Car of the Year, a unanimous decision.

 Motor Trend 2013 Car of the Year, also a unanimous decision.

 Popular Science's Auto Grand Award Winner Best of What's New list 2012.

 Time Magazine Best 25 Inventions of the Year 2012 award.

 Yahoo! Autos 2013 Car of the Year.

 CNET Tech Car of the Year for 2012

 Green Car Reports' Best Car To Buy 2013

 2013 AutoGuide.com Reader's Choice Car of the Year

 Natural Resources Canada 2013 EcoENERGY for Vehicles Awards in the full-size
category (Tesla Motors Model S, n.d.).
 Tesla had its first sale of stock (Initial public offering) on July 2010 and is currently stepped
on the NASDAQ trade as TESLA (Boyke, Cheng, Clevers, Schroeder, & Strupp, 2010)

In addition to the previously mentioned vital assets starting at 03 October 2013,Tesla has
worked a system of 42 stores and exhibitions in the US and Canada (Tesla Engines Inc. profile,
n.d.). Past that Tesla has in excess of 4,000 Representatives around the world (Tesla Engines,
Inc. Profile, n.d.).

Looking at the llustrations: Annex-I (Summarized Financial Statements) Annex-II (Stock

Price History), and Annex-III (Financial Ratios vs Industry Averages)the money related state
of the association can be quickly summarized as follows:

• Not yet accomplished huge benefit

• Stock cost is relied upon to ascend to $70 per share from the current $25..

• Strength of its stock cost is because of desires for future profit or procurement by a larger
firm.
• Tesla has acquired significant assets valued over $400 millions
• R&D has been a huge cost for Tesla, and may not diminish even after take off of the
Model S. (Aulicino, Waratuke, Williams, & Elliott, n.d.)

Concerning the operational facilities of Tesla, it fabricates the Model S at the Tesla
Production line in Fremont, California. For the European market, Tesla is collecting and
disseminating the Model S from its European Dispersion Center in Tilburg, the Netherlands
(Tesla Motors,Inc. Model S n.d.).

At last, to guarantee long separation drive for its clients Tesla is building the quickest
and most far reaching universal system of charging stations (Witt, 2013). Accordingly, in 2012
Tesla Engines started assembling a system of 480-volt quick charging supercharger stations so
as to encourage the Model S cars to make long separation trips.

In June 2013 Tesla declared that every current station in the supercharger system, and
every new station, would progress toward becoming Tesla stations, and have offices to help
under-two-minute battery pack swaps for the Tesla Model S, and for all future Tesla models
(Tesla Engines, Inc. Model S, n.d.).

4.2. Capabilities

Tesla Motor Company has some following capabilities in addition to the above
mentioned valuable resources:
 Design skills used to make quality products

Concerning the structure aptitudes important in making quality items MacKensie (2013)
has depicted Tesla's capacity as pursues: The first advantage of Model S is that it provides
packaging opportunities resulted from the compact EV powertrain.

Notwithstanding that the lodge is distinguished by a similar creator to be open, however

the raked roofline power on back seat head room. "With no motor in advance, the "hood" covers
a valuable baggage space, and the back incubate opens to a huge burden region that gets
considerably greater when you crease the back seats level. All out burden limit is 63.4 cubic
feet, not excessively far short of the 63.7 cubic-feet in a Chevy Equinox, and regardless of its
dashing looks, the Model S is the primary hatchback on the planet to offer third-push seating".
Notwithstanding these Tesla structured and built up its very own framework since it exceeds
expectations in both equipment and programming building capacity" (MacKensie, 2013, para.
3).

Over that Tesla structured its Model S to permit quick battery swapping, and this
component has encouraged the amassing procedure (Tesla Engines, Inc. Model S, n.d.)

Engineering Excellence

From the engineering perspective, Tesla produces vehicles with light bodyweight because
of its everything aluminum development, yet solid and firm. The front and back suspension are
additionally for the most part made of aluminum. Taking a look at the back, there are expelled
back suspension connects that give the quality of forgings at less expensive rate, while in
advance there are empty cast front knuckles that gauge 20 percent not exactly a traditional
knuckle of comparable quality. The electric engine is situated between the back wheels,
contributing incredibly to the 47/53-percent front/back weight appropriation (MacKensie,
2013).

R&D of EV Powertrain Components

Being a innovation leader is a a great advantage when endeavoring to position an

organization in an up and coming business sector like the EV showcase. Be that as it may, there
are likewise various perils when being so. The primary development at Tesla Engines is their
battery pack, which is their very own blend advancements and parts from joint effort
accomplices. (Aulicino, Waratuke, Williams, & Elliott, n.d.)

Cooperate With Partner Firms to Achieve Synergies

 Likewise, the Research and development divisions of Tesla Engines and Panasonic
coordinate for the creating of progressively effective batteries. At long last, Tesla Engines
coordinates with some OEM makers like Toyota and Daimler".The sorts of Tesla Engines'
associations as indicated by Holmberg (as refered to in Karamitsios, 2013, p.18) are recorded
as follows:

Source: Holmberg, 2011 (as cited in Karamitsios, 2013, p.18)

Efficiency
 For MacKensie (2013) (Proficiency, para. 4) the proficiency part of Tesla has been
depicted as pursues "The best vitality utilization figure we've returned is 118 mpg-e for a 212-
mile keep running from the eastern edge of the Los Angeles spread to Las Vegas, Nevada. For
the 313 miles of street circles amid the COTY assessment, where the vehicle was driven at
ordinary speeds by every one of the judges with the cooling running, it arrived at the midpoint
of 74.5 mpg-e.

Amazing numbers, particularly considering the 4766-pound Tesla Model S Mark

Execution adaptation will nail 60 mph in 4.0 seconds and the quarter in 12.4 seconds at 112.5
mph, with a top speed of 133 mph" (MacKensie, 2013, para. 4)

Safety

Tesla Motors has been recognized by a similar creator as top positioning on the grounds
that the Model S is a truly steady stage and the vehicle is fast and responsive amid high traffic.
The benefit of its security control and non-freezing stopping mechanisms and the standard
supplement of latent wellbeing gadgets has been distinguished as run of the mill qualities of the
vehicle as for its wellbeing precautionary measure measures. Notwithstanding that MacKensie
(2013)... (Security, para. 5)... held that "shrewd designing, for example, the double octagon
extrusions front and rear, and the tremendously solid rooftop structure, is attempting to secure
you. Tesla asserts the Model S beats government crash benchmarks, having been sway tried at
50 mph (the obligatory standard is 35 mph) and surpassing the rooftop squash prerequisite by a
factor of 2".

Value

When contrasted with Mercedes-Benz E-Class, BMW 5 Series, and Audi A6 the 40-
kW-hr Model S is aggressive at cost of $58,570 (before a government expense credit of $7,500).
taking a look at "a stacked 85-kW-hr signature execution arrangement, similar to the $106,900
(before expense credit) vehicle Tesla organizer Elon Musk drives, is valued ideal on BMW M5
and the Mercedes CLS63 AMG - autos of comparative execution, recollect. Tesla purchasers
likely don't have to watch their pennies, yet the figuring merits doing all the equivalent: At a
normal of 74.5 mpg-e, the Model S costs around 6 pennies a mile to run, in light of California's
13 pennies for every kW-hr" (MacKensie, 2013, para. 6).

Performance of Intended Function

Concerning execution of proposed work a similar creator called attention to that "The
Model S will effortlessly deal with 200 miles of blended city, rural, and turnpike driving with
no hypermiling strategies. For the ordinary day by day diet of driving and short outings (the
normal American drives around 40 miles per day), the Model S is a convincing
recommendation" (MacKensie, 2013, para. 7).

4.3. Value Chain Analysis

In analyzing the value chain we will take into account, in particular, the producers of the
parts that make up an electric vehicle. We will then see how Tesla is accustomed to improving
its sales and strategy using a narrow production technique to better accommodate the market.
At one point the sales stagnated and the company needed a new start.

So Tesla has limited the production of electric cars to a smaller number than the
previous one, coming with significant improvements for the S model. The selling technique is
the same with Apple’s, where sales outlets are full of recent models and they all shine together.
There are often generous discounts and it looks like the state is interested in providing
considerable help for an electric car. Certainly, Tesla made an intelligent move when relying
on electricity, so we'll look into the chain of values that make up the company and define it.

4.3.1. Suppliers

As indicated by the former mentioned author, Tesla changed its obtaining practice to vital
worldwide association from its strategic decentralized element. Be that as it may; there is no
enough acquirement collaboration in Tesla's task with sister organizations like SpaceX.

A similar creator kept up the speed and adaptability of the organization by referring to the
accompanying from the Acquisition Officer discourse " We're telling our providers that the two
gatherings need to think proactively and buckle down at essentially decreasing tooling lead-
times," he includes, " ensuring they're capable and willing to assemble designing help groups
for us willing to work with the speed and adaptability we're requesting" (Hall, 2013, Building
its very own inventory network, para. 13). At long last the relationship of Tesla with its
providers has been depicted by Diminish Carlsson as pursues: " I think the providers who were
early adopters and who were ready to take a bit of a risk , most likely have a profile that fits us
somewhat superior to a progressively preservationist type. We're the daring individuals"
(Lobby, 2013, Building Its Own Production network, para. 16).

4.3.2. Marketing & Sales

Tesla utilizes remarkable acquirement for its model S infotainment framework planned
by the organization from the beginning. In addition to that as it has been stated by Tesla's Chief
Procurement Officer Peter Carlsson they are moving toward their greatest market and are
winding up close in their improvement, at the end of the day they can drive, plan and execute
the innovation simultaneously in rapid way (Hall, 2013). Then again the objective market of
Tesla's Roadster has been little a direct result of the staggering expense related with the Roadster
Model. Be that as it may, there is lack of supply for the Model S in light of the fact that there is
intense interest from clients that even brought about a five-month holding up rundown when
we seeing explicit cases Model S advertise in Norway (Tesla Engines, Inc. Model S, n.d.).

In 2013 Tesla worked around 20 retail locations so as to suit its arrangement for expanded
Model S creation (Hall, 2013). The business routine with regards to the organization has been
additionally clarified by (Tesla Engines, n.d.) as pursues: "Deals amid 2013 totaled around
18,000 units, enabling the Model S to rank as the third top selling module electric vehicle in the
U.S. in 2013, after the Chevrolet Volt (23,094) and the Nissan Leaf (22,610).

Additionally in 2013, the Model S was the top selling vehicle in the full-measure
extravagance car classification, in front of the Mercedes-Benz S-Class (13,303), the top selling
vehicle in the Series (10,932), Lexus LS (10,727), Audi A8 (6,300) and Porsche Panamera
(5,421). As of December 2013, around 20,600 units have been conveyed in the U.S. since the
Model S initiation in June 2012" (Tesla Engines, Inc. n.d., Deals and Markets, North America,
para. 5).

Regarding the sales strategy of the organization it pursues comparative style to Apple.
This is on the grounds that they are following a similar kind of stores that are "both tastefully
satisfying and take into consideration the firm to make an exceptional purchasing knowledge.
Tesla's stores change the whole vehicle purchasing knowledge and remove the motivation of
both the purchaser and merchant to contend on cost. Moreover, Tesla's stores enable the firm to
accomplish working efficiencies just as catch deals and administrations incomes that
commonplace car producers don't" (Schwartz & Xia, 2013, p. 3).
4.3.3. Repair Service

• Dedicated completely to the electric vehicles niche, Tesla also posses a great
rating regarding service & maintenance.

• New advancement inside the project department

• A commited R&D derpatament

• Tesla owns at least 250 original patents

• Recently formed organization that can starting with no outside help, yet they

have to manufacture their own remarkable picture.

• Focus on plan, execution and proficiency. Tesla is the main auto organization
that give similar accentuations on zero discharges, execution and feel of the
vehicle.

• Battery Technology: The organization has better battery innovation than other
car creators in the business. Tesla has built up its very own center
innovation—the batteries, the electric engine, and the frameworks for
controlling them.
• Supplier of EV parts: Tesla not just advantages from lower costs for its very
own autos, it's likewise had the option to pitch its innovation to different
automakers, giving an increase in income that helped it make due in the time
between creating its first vehicle, the Roadster, and the present Model S.
 Tesla is pioneering a new approach to vehicle servicing that we believe will
revolutionize the customer experience. An announcement about this will be forthcoming
shortly. A complete inspection, tire alignment, new brake pads, hardware upgrades, and
miscellaneous other maintenance items as needed are among the repair services (Tesla Motors
Model S, n.d., Vehicle warranty & maintenance, para. 1).
4.4. SWOT Analysis

In view of intensive examination of the organization's inside and outside ecological

circumstances, this part incorporates the SWOT investigation that are accepted to be basic for
the achievement of the organization and which will give indicates on key ramifications.

4.4.1. Internal Strengths

 First organization committed completely into the electric vehicle specialty

 Brings advancement in the inside culture.

 A very much created R&D division.

 Owns in excess of 250 licenses.

 Enthusiastic speculators because of the promising stock cost of Tesla

 Young organization that can begin starting with no outside help to

manufacture its own remarkable picture.

 Partnerships with producers. like Toyota, Mercedes, Daimler and Panasonic

have given the organization the chance to help their battery innovation
innovative work.

 Focus on plan, execution and proficiency. Tesla is the main auto organization
that give similar accentuations on zero discharges, execution and feel of the
vehicle.

 Battery Technology: The organization has better battery innovation than other
car creators in the business. Tesla has built up its very own center
innovation—the batteries, the electric engine, and the frameworks for
controlling them.
4.4.2. Internal Weakness

• Tesla is another organization set against set-up auto organizations.

• Tesla has constrained creation office.

• Possible provider issues if request increments definitely.

• Tesla has modest number of workers contrasted with entrenched organizations
like Toyota.
• Delay in arrival of anticipated models.

• Logistical disservices

• Lack of brand name acknowledgment

4.4.3. External Opportunities

• Fruitful in European markets and sees extraordinary potential in Asian and
Canadian markets
• Alliances with different producers to get cooperative energies in circulation
and administration.
• Rising gas costs will expand the interest for EVs.
• Government guidelines and endowments just as financial motivating forces
support EVs over gas automobiles.
• There is good faith in the stock cost of Tesla.
• Innovative deals channel models
• Sourcing providers in the domain of intensity circulation and high flow or high
power applications
• There's additionally a solid case that upgrades to the lithium-particle batteries
that power the flow age of electric vehicles might be sufficient.
4.4.4. External Threats
• Problems of monetary and money related emergency comprehensively, may
experience difficulty creating income to get back their arrival on speculation.
• There is a lot of competition
• The finish of appropriations and duty credits.
• Sleepy purchaser surveys
• The EV market is still little, mostly because of the cost
• Partnered firms may figure out Tesla's protected innovation.
• Disruptive innovations from contending firms.
• In spite of huge interests in battery innovation and vehicles, even the most
vigorous EV followers appear somewhat conflicted about the eventual fate of
battery autos (Shirouzu, Kubota, & Lienert, 2013).
• The progressive fixing of worldwide eco-friendliness guidelines from 2020 on
is compelling automakers to survey their choices, including the utilization of
trend setting innovation (Shirouzu, Kubota, & Lienert, 2013)

5. Core competencies

Herein are some of the most important aspects that place Tesla above other auto
providers. Instead of burrowing a battery technology from other companies, Tesla decided to
build its own autonomous battery, long lasting and friendly with our environment. This is one
of the main aspects that helps Tesla selling numerous amounts of products. This car is the
ultimate gathering of speed, aerodynamics, comfortable interiour and a novel battery, developed
within Tesla’s opened space.

5.1. R&D of EV Powertrain Components

Tesla is referred to for its better battery innovation as thought about than the other
producer's in the business. This competency of Tesla radiates from long stretches of innovative
work so as to understand the general thought of its establishment which "depends on its trust
that a similar Li-particle innovation utilized in PCs could be utilized to make completely electric
vehicle that isn't just eco-accommodating yet additionally appealing and enjoyable to drive"
(Boyke, Cheng, Clevers, Schroeder, & Strupp, 2010, p. 3).
5.2. Ability to vision the engrowth of the EV

This is imagined by its executive, item designer and CEO Elon Musk. This individual is
the genuine chapmen and image of the brand of the organization. Because of his long vision,
capacity to make vital association, essential investor and his capacity to verify DOE (depending
on experience) advance empower the organization to end up fruitful electric vehicle producer
(Boyke, Cheng, Clevers, Schroeder, & Strupp, 2010).

6. Competitive advantage

In the section below, there are some vital aspects which promoted Tesla among various
industries and gained them a crucial advantage. This company learned other companies and in
return they got credit and all the help they needed. A shared goal can be achieved easily when
both parts accept to share some insights, but Tesla has an enormeous aid coming from industries
where it contributed with ingeniousity. This is where production insights and free patents
converge into something that gives Tesla

6.1. Proprietary EV Powertrain Component Patent

Tesla has more than 150 licenses granted and more than 250 Patents Pending. A large
number of Tesla's licenses were given in the United States, Britain, and Canada, yet numerous
different licenses were endorsed in nations around the world. (Witt, 2013). Numerous creations
created by Tesla were not put into patent insurance (Tesla Motors, Inc. Patents, 2014).

6.2. Design skills Used to Make Quality Products

The organizations focused separation originates from its capacity to convey the most
naturally dependable vehicles available having every single quality measurement and
advantages of a top notch vehicle: speed, taking care of, solace, and enterntainment (Boyke,
Cheng, Clevers, Schroeder, & Strupp, 2010).

7. Strategic competitiveness

Beginning from the very foundation of the organization, we can see that the key intensity
of the organization depends on its greatness in R&D. Such a dedication of the organization can
be obviously comprehended by taking a gander at its fiscal summaries. From the earliest starting
point till present the most astounding cost of the organization is R&D (Journal, 2014).

Yearly Financials for Tesla Motors Inc. R&D

2009 2010 2011 2012 2013

51.69M 18.23M 95M 204.60M 280.78M

Source: (Journal, 2014) FactSet Fundamentals.

 Initiator (First-Stepper) and Soft Competition: As the primary organization to offer
a completely electric games vehicle (the Tesla Roadster), Tesla constructed a notoriety for being
a green-innovation goliath and gained faithful clients.

Likewise, because of the few number of electric carmakers, Tesla sells at high costs and
still keeps up a lot of the electric vehicle showcase.

Support by Governments for Environmentally Friendly Vehicles: Because of the

expanding worry about environmental change (and explicitly an Earth-wide temperature boost),
Tesla, as a producer of zero-emanation autos, profited by endowments and tax cuts set up by
different governments through module electric-vehicle motivating force projects intended to
energize the generation of naturally inviting vehicles.

For instance, in nations like Malaysia and Hong Kong, zero-emanation electric vehicles
like those offered by Tesla are completely expense exempted. Without these endowments and
expense exceptions allowed by outside governments, Tesla would presumably not have made
the progress level it has. The Singaporean disappointment case best demonstrates the
significance of these tax reductions to Tesla's achievement in the outside market: Without duty
exceptions, the Tesla Roadster would have retailed somewhere in the range of $500,000 and
$600,000 in Singapore, double the cost of $300,000 it had anticipated to sell at with tax
reductions, making Tesla stop its activities in the nation only a half year subsequent to moving
in (Radu, 2011)

Focused Differentiation, Low Bargaining Power of Buyers, and Inelastic Demand:

Our presented company has a conventional business system called engaged separation. It offers
interestingly structured high-11 execution electric vehicles and targets clients with high salaries.
In light of this uniqueness of Tesla's vehicle models, its clients have low bartering force.
Moreover, because of Tesla clients' high incomes and the way that Tesla vehicles are an
extravagance decent, its clients are happy to pay high costs and, hence, have an inelastic interest.
The above contentions clarify very well why Tesla can meet and even outperform its business
goals.

Direct Selling: Other impetus of Tesla's accomplishment in the remote market is its
immediate selling system. Through direct selling, Tesla is nearer to its clients, rapidly gets their
criticism, and adjusts its vehicle contributions to their preferences and inclinations on time
before it ever loses any of them. It likewise disposes of extra expenses related with businesses.
8. Strategy implication

 Tesla should apply inventive limited time battles to further upgrade its image as the
primary mover in the EV business

 Tesla should further benefit from its imaginative corporate culture and solid R&D
abilities to diminish charging time for batteries and to build the range that their EVs can
go in a solitary charge.

 Tesla ought to consult with other built up auto organizations to limit the inconveniences
that it faces like postponement in the dispatch of new items and its low dimension of
brand acknowledgments.

 Tesla ought to arrange administration concurrences with organizations like Toyota so as

to handle issues of after deals administration fixes which is trying to be overseen by
Tesla versatile administration teams on occasion of expected extreme interest for
medium sized cars that Tesla plans to venture into.

 Tesla ought to extend its generation limit so as to provide food the future expected
extreme interest by expanding its money related base both through sell of values and
obligation financing.

 Tesla should endeavor to limit conceivable provider issues to suit the future anticipated
critical increment popular through in reverse joining.

 Through the utilization of favorable human asset the board like the presentation of
efficient learning the executives it should endeavor to draw in information laborers from
various pieces of the world.

 Tesla ought to incorporate its operational exercises so that it will be in a situation to

build up extra models on the Model S powertrain and secure the EV specialty in the
 extravagance vehicle advertise; in the meantime it ought to submit assets to create and
fabricate economy EVs.

 On the off chance that battery pack costs are going to fall later on Tesla could dispose
of Model S 160miles alternative and diminish the cost of the 230 and 300miles choices
so as to further improve its upper hand.

9. Strategic partnerships

In order to acquire benefits and form relationships on the international business market,
along with other companies, Tesla decided to shake hands with the synergy of „kaizen”
burrowed from Toyota, developed their own creation departament and decided to create a new
type of battery, a type that is expected to reach the market and have a great impact on the electric
vehicles market. Personally, I belive these types of partnerships are technically the main way in
which a company could climb up into the hierarchy.

Getting links with industry players will often bring fruitful results and sometimes there
are some improvements seen exclusively from the outside of the company. Tesla took advantage
of numerous feedbacks and they started to develop themselves. They offered so many patents
for free and now they seem to have an important friend in the Toyota company.

Toyota adopted some of the patents and their returns are at a high level, eager to share
their battery technology with Tesla. At this point, Tesla is still searching for a custom made
battery, completely charged in 15 minutes and ready to use.

Business can grow between companies that share the same goal. Here is an eloquent
example of dedication, inspiration and a trustworthy communication system.
9.1. Toyota Motors
Toyota Motors Corporation is a noteworthy Japanese car maker. Its auxiliary, Toyota
Motors U.S.A., works in the U.S. advertise since 1957. Its present base camp, situated in
California the same number of other car organizations in U.S., however Toyota is currently
moving its backup to Dallas, in Texas. Toyota Motors is one of the significant producers in the
EV business: it is the world-driving selling of crossovers with a. piece of the pie of more than 1
million units for the entire Prius family since 2000; in any case, in 2013, over 23.000 units were
sold in U.S. making Toyota the third real player in the business. As has been stated, the Toyota
Prius is the most celebrated half and half vehicle sold by Toyota Motors, declared back in
December 1997, which got nonstop redesigns with different variants discharged amid the most
recent decade. Toyota Motors built up another framework called Toyota Hybrid System (THS),
which is prepared on the Prius family. THS is a progression of parallel crossover frameworks:
both the fuel controlled motor and the electric engine drive the wheels while the driver can switch
between the two sources and, for instance, utilizes the electric engine as a generator to charge
the battery and drives the vehicle through the motor or straightforwardly through the flow from
the battery. In THS, a gadget isolates the power in two ways: in one way, the power from the
motor drives the vehicle's wheels while in the other way, which is electrical, a generator changes
over the power from the motor into power to charge the battery. Through this framework, Prius
can accomplish eco-friendliness and high power exhibitions. . Latest advancements from Toyota
Motors brought to THS II. As indicated by THS II, the framework has two power sources: a fuel
motor and a magnet AC engine associated through the controller to a NiMH battery.

At the point when the vehicle begins moving, the vehicle keeps running on the electric
engine; under typical conditions, a gadget isolates the power in two ways turning on a generator,
which drives the engine and the wheels straightforwardly. At the point when the quickening
pedal is pushed, the additional power is provided from the battery while the motor and the electric
engine gives the increasing speed. Quickly, THS II embraces high-voltage power circuits and a
NiMH battery; the engine's capacity and motor's capacity give an all the more dominant
presentation by plunging the ability to the haggles generator, which drives the engine and
energize the battery.
Toyota grew more advancements, which drove the development through the crossover vehicles
industry and enabled this organization to be one of the fundamental players in the overall EV
industry. Toyota Motors grew likewise an all-electric SUV: the Toyota RAV4 EV.
 This vehicle will be examined in the Tesla Motors study case since it is the consequence
of a joint effort between the two organizations. Other than that, the original of this vehicle
wound up accessible in 1997 for restricted premise, while a noteworthy access to this vehicle
was permitted distinctly in 2001. It utilizes NiMH batteries with a scope of 240 km. The RAV4
EV is practically identical to a standard motor vehicle, with the exception of the way that it
utilizes a power electric source. (Luca, 2014)

9.2. Tesla Motors

The organization was established in 2003 and from that point forward, delivered two
models with another two coming in the following years. Their first item, the Tesla Roadster,
is a game EV vehicle, ready to accomplish superior exhibitions however coming at mind-
boggling expenses. Their second vehicle, the Model S, is an extravagance car EV, ready to
accomplish the most noteworthy exhibitions in the business and coming at mid-high cost. The
organization fabricated its techniques on coordinated efforts with different players in the
business and is currently searching for eager ventures separating 2015 and 2020.

“Technology leadership is not defined by patents, which history has repeatedly

shown to be small protection indeed against a determined competitor, but rather by
the ability of a company to attract and motivate the world’s most talented
engineers. We believe that applying the open source philosophy to our patents will
strengthen rather than diminish Tesla’s position in this regard.” (Elon Musk,
2014)

The technique of Tesla Motors about opening its licenses may seem questionable,
particularly alluding to the words utilized by Elon Musk in 2012, when he guaranteed "Our
business will be unfavorably influenced in the event that we are unfit to shield our Intellectual
Property Rights from unapproved use or encroachment by outsiders". Undoubtedly, as has been
stated, a major piece of the incomes created by Tesla Motors originated from the permitting
advancements particularly until 2013. Moreover, the organization dependably contended that
their structure, advancements and designing abilities, have empowered them to defeat the
components that ordinarily constrained the reception of EVs. Be that as it may, the vision on
which the organization is established is a long way from the truth.
Deals were not high true to form and the general enthusiasm toward the business is rare
yet. What's more, Elon Musk clarified in his blog, his developing separation from the patent
framework. As indicated by the CEO of Tesla, the present status of licenses includes complex
legitimate frameworks and claims with surprising expenses that are scarcely moderate by a
"little organization".
 Moreover, different organizations can create comparable innovations autonomously and
dodge their licenses. In this day and age, where the monetary advancement is accomplished
through quick developments, and organizations regularly advance quicker than what licenses
can cover, licenses appear as far as possible this procedure: the incentive to trailblazer of
licenses is diminishing after some time. This contention is clearly not substantial in each
industry (pharmaceutical, for instance), yet it can unmistakably clarify what's going on in
numerous enterprises (particularly IT).
The primary concern to comprehend, is that Tesla Motors isn't contending with other
electric vehicles producers however with gas controlled vehicles. When you are by then of an
industry, in its initial days, you need to take a gander at participation with different makers to
set new principles, grow new advances, lessen the general expenses behind the business and
build up the entire environment with its framework. Now of an industry, there is just a little
punishment, financially, on sharing advances and not benefitting from it, in light of the fact that
the challenge isn't straightforwardly in your industry.
The utilization of licenses protectively to reject your rivals, basically, does not bode well
now. What's more, Tesla wants to pull in the best architects into the business and make a solid
connection between the organization and different producers. Without a doubt, Tesla will be
the association player between its licenses and the genuine item; this may prompt make
increasingly community systems, which are one of the most grounded components in the
organization's methodology.
Additionally, if various associations will use Tesla's advances and learning, the
association will set its own one of a kind measures to the business. Tesla seems to benefit
substantially more from all of the effects that its sharing patent framework may make than a
mindful use of its licenses could have made. In any case, we can explain this procedure as a
way to deal with change Tesla's weakness, fundamentally related to the general business, into
characteristics.

9.3. Battery manufacturers

Like any purchaser item, various crude materials are expected to fabricate an electric
vehicle battery. . The worldwide interest for lithium has been minor in the most recent decades,
yet the ongoing development of the electric gadgets industry has caused an expansion of the
interest for lithium. An electric vehicle battery requires considerably more lithium than an
electric gadget battery, affecting and delivering real consequences for the worldwide interest
for this material. The majority of the stores of lithium are found separately in Bolivia, Chile,
Argentina, United States and Afghanistan. The "Sociedad Quìmica y Minera de Chile" is the
real lithium organization, which supplies the real battery makers in Asia. Without a doubt, Asian
organizations are the real producers of batteries for electric vehicles. LG Chem, the well known
South Korean organization, gives its batteries to General Motors and Renault. For instance, the
Volt keeps running on a battery provided by Compact Power, an auxiliary of LG Cherm.
Panasonic Corporation gives batteries to Tesla Motors and is currently attempting to fabricate
a Gigafactory in the U.S.

10. Collaborative networks and alliances

This section has a major importance on how the company developed links and promoted
itself among international working partners. Here are the most influential relationships formed
between our disscused company and any other key players from the auto industry. There are
some interesting facts on how Tesla developed long term relationships with companies like
Panasonic, LG and key producers from electronics industry. Our company encountered from
time to time some flaws, be there technical or production flaws. They all gathered to build an
unique prototype of what we know today as Tesla Model S. Musk knew how important small
details are, so he dedicated resources to build a complete interiour, a long lasting one. Here is
how he build an affordable electric vehicle.

10.1. Networks
With their alliances oriented systems, associations and coalitions, organizations consent,
they all team up so as to accomplish a shared objective by staying free and self-governing.

In the EV business, the innovative improvement is a fundamental issue that

organizations need to confront. As has been stated, electric vehicles have various parts like the
electric engine, the battery, the product yet additionally the charging stations. These
components should be created so as to accomplish better mechanical norms to fit the purchasers'
need. An association can't depend without anyone else advancement and build up these
advances independent from anyone else. Building up the business is the primary objective for
those organizations; it isn't just about the offers when you can expand the general market
measure. An industry development can profit standard EV makers yet in addition their providers
and numerous different associations related with this industry. This is the fundamental reason
that can clarify why there is such a tremendous measure of coordinated effort in this industry.

Initial, a concise clarification of the contrasts between these three types of systems will
be given. Cooperative systems represent a lot of connection among free and independent
associations both flat and vertical, while key partnerships are understandings between
organizations to accomplish a shared objective, frequently through mergers and acquisitions.
 The greatest systems are made in the batteries business. Automakers can't build up the
batteries inside without enormous interests in R&D and aptitude. For the most part, automakers
want to assemble systems and collusions with batteries makers so as to get to the best
advancements accessible and increment the scope of their vehicles since, as has been stated, it
is a fundamental issue for purchasers. In 2007, after the idea of Chevrolet Volt, General Motors
was searching for an accomplice to assemble the Volt's batteries. Smaller Power, a backup of
LG Chemical and Continental Automotive Systems was build up this innovation. LG Chemical
is currently the principle accomplice of General Motors in the improvement of the batteries for
the Chevrolet Volt, particularly after that LG Chem and Compact Power, with a speculation of
$300 million, constructed a manufacturing plant to create batteries for 200.000 vehicles.
A123Systems produces the monophosphate lithium-particle battery pack for the Chevrolet
Spark EV and Chrysler. Portage Motors collaborated with Compact Power for the generation
of the lithium-particle batteries for its Ford Focus Electric while Sanyo Electric gives NiHM
batteries to Ford's cross breed vehicles. Samsung SDI have an organization with BMW Group
for the enhancement of its batteries to models i3 and i8 since 2009 and in 2014, after a
Memorandum of Understanding (MOU), Samsung SDI and BMW Group consented to build
the general enhancement of batteries after the development of i3 and i8 deals. Since batteries
are a primary issue for automakers, numerous makers constructed joint endeavors with the
fundamental batteries makers, as we will find in the following section.

Building up the general business is another enormous advance and a significant issue
for organizations working in the EV business. Organizations teaming up to grow new
advancements or offer the R&D speculations to build up the business and its foundation. BMW
was at that point opened to impart battery advancements to rivals. The Nissan-Renault union
for the Zero-discharge vehicle is a case of this case. The Alliance spread numerous components
and joint endeavors, as we will find in the following passage. In any case, the Alliance has made
associations with in excess of 100 open and private associations to make customer purchasing
impetuses and EV foundation speculation. Nissan secured the battery creation for the Alliance,
yet it is currently considering a joint effort with LG Chem for the generation of the batteries
since they appear to be unfit to accomplish the equivalent mechanical dimension of the Korean
organization. Nissan needs to keep the creation of the batteries in-house building up another
age of batteries however top to bottom data are not given yet.
 An increasingly definite perspective on how the work is part among vehicle batteries
producers is exhibited in the addition IV of this paper. Practically identical by a full
understanding, Tesla's organization with Panasonic may seem to undermine other enormous
key players.

Renault and Nissan sold more than 118.000 electric vehicles in the course of recent
years and in the event that we think about the Alliance as one player, it is the significant player
in the worldwide business. The Leaf was the principal EV created by the Alliance. In 2015,
the Alliance will supply EVs to Orange, one of the world's biggest media transmission
administrators, generally for vehicle sharing reason. The Alliance is accomplishing significant
outcomes and joint efforts: with Daimler, another plant will be worked in Mexico with a
venture of $1 billion for each organization, ready to deliver 350.000 vehicles every year and
utilize 6300 specialists (Luca, 2014)
10.2. Alliances - all patents are yours!

These days, Tesla Motors shows up as a noteworthy player in the business. The Model
S deals are expanding, its vehicles spread a significant piece of the most cutting edge
innovations in the business and its cooperation system is growing step by step. Other than that,
the vision of Elon Musk looks far yet. The business is still little, considered as a specialty and
there is a full biological system to create. In mid-2014, the organization contended that the
offers of its Model S were high and were expanding yet at the same time a long way from the
desires. Tesla is covering enough enhancement to work over 600.000 vehicles however the
interest does not outperform the 80.000 vehicles. A noteworthy stun was required.

In June 2014, Elon Musk declared on Tesla Motors' blog another shock choice to move
a major advance in the business:

“Tesla Motors was created to accelerate the advent of sustainable transport. If we

clear a path to the creation of compelling electric vehicles, but then lay intellectual
property landmines behind us to inhibit others, we are acting in a manner contrary to that
goal. Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use
our technology.” (Elon Musk, 2014)

As per this choice, Tesla Motors was opening the majority of its licenses to the
contenders. (Luca, 2014)

Tesla could most likely benefit by giving its reviving support of clients who does not
possess a Tesla's vehicle under a little expense, yet as we presented in the past passage, BMW,
Nissan and Tesla entered in converse with construct the charging foundation together and make
a standard in the links and the connectors.

Nissan guaranteed that they respects any activity to extend the volumes of the electric
vehicles, while BMW contended that they are keen on the Tesla's responsibility to the
achievement of EVs and they might want to cooperate to make it a reality. This joint effort will
presumably be a vital advance to the vision of Elon Musk: BMW, Nissan and Tesla covers
practically 80% of the EV showcase deals and the American organization quickly turned into
the fourth player in the business.

Regardless we don't have the foggiest idea if reviving stations will be where the
organizations will contend, or where they will work together. In any case, constructing a
biological system around the EVs will most likely be the principle challenge between the EV
makers, even before the challenge, and the ongoing talks might be an indication that the
organizations are moving toward this path. (Witt, 2013)
 CONCLUSIONS

Tesla Motors whose principle target is to change the current transportation industry
into a practical completely electric industry is flooded of a 'progressive procedure'. A
'progressive system' since the modern transformation, that photos intense initiative, that puts
stock in the association's capacity to cause change and adjust to even more current ones.
(Reeves, 2012).
Tesla's real system has increased great rating because of its troublesome advancement
and particular situating. The association's methodology to successively dispatch contributions
that are superior to contenders and are making a need in various market portions is remarkable.
Today, with driving Powertrain innovation, the honor winning extravagance Model S car and
the most recent moderate Model 3 car, Tesla has the energy and chance to develop as a
worldwide innovator in the developing Electric Vehicle industry. Elon Musk's brave key
moves like interest in Giga Factory and opening Patents demonstrate a hopeful and intense
vital position.
Regardless of picking up notoriety because of its imaginative practices, Tesla has
additionally pulled in pundit from the business and media. The organization isn't yet gainful
and presently can't seem to demonstrate its generation ability. Having said that, its goal-
oriented key objectives has welcomed rivalry and has driven the sparkle in the beginning
Electric Vehicle industry.
In the midst of all the energy and hypothesis, the inquiry is that are we nearly another
time in the transportation business or will Tesla change its 'Molding technique' to a 'Versatile
methodology' because of the permanent condition of car industry (Tillmans, 2012)
 References

Aulicino, S., Waratuke, J., Williams, S., & Elliott, C. (n.d.). Tesla Motors case study.

Boyke, D., Cheng, J., Clevers, J., Schroeder, M., & Strupp, K. (2010, December 14). Tesla
tomorrow: The future of Tesla motors. University of Wisconsin-Madison.

Burns, M. G. (2015, July 28). A Brief History of Tesla. TechCrunch.

Hall, J. (2013, June 20). /electronics/articles/tesla-builds-supply-chain-own-image/. Preluat de

pe http://www.mypurchasingcenter.com.

Journal. (2014, February 13). Market Watch. Preluat de pe http://www.marketwatch.com

Kershiner, I. (2013, May 26). Israeli venture meant to serve electric cars is ending its run. New
York Times.

Lehman, F. V. (2009). Collaboration with future competitors and partners beyond your current
industry : A case study on Tesla Motors. MSc. MIB Masters's Thesia. Copenhagen:
Cand. Merc. MIB Copenhagen Business School.

Luca, C. (2014). BMW opened to share battery technologies with rivals. Automotive News.
United States of America: USA Today.

MacKensie, A. (2013, January). oftheyear/car/1301_2013_motor_trend_car_of_the_year_tes

a_model_s. Preluat de pe http://www.motortrend.com.

Mclvor, A. (2012, December). Electric Vehicles: A New Industry (slowly) Emerges. Top
Capital www.topcapital.com.cn.

Radu, M. (2011). Tesla Motors is Leaving Singapore. Autoevaluation.

Reeves, M. ,. (2012). Your strategy needs a strategy. Harvard Business Review.

Schwartz, C., & Xia, C. (2013, April 18). Investment thesis. University of Oregon Investment
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Shirouzu, N., Kubota, Y., & Lienert, P. (2013, February 04). Electric cars head toward another
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 ANNEXES

Annex – 0 Tesla Motors Future

(https://1reddrop.com/tesla-inc/tesla-worldwide-annual-revenue-from-2008-to-2017/)
Annex- I Summarized Financial Statements

Year Year Year Year

In Millions of USD ending ending ending ending
12/31/10 12/31/09 12/31/08 12/31/07

Total Revenue 116.74 111.94 14.74 0.07

Total Cost of Revenue 85.01 101.01 15.28 0.01

Gross Profit 31.73 10.94 -0.54 0.06

Selling/General/Admin. Expenses, Total 84.57 42.15 23.65 17.24

Research & Development 89.3 19.28 53.71 61.95

Total Operating Expense 263.58 163.84 93.25 80.01

Operating Income -146.84 -51.9 -78.5 -79.93

Other, Net -6.58 -1.45 -0.96 0.14

Income Before Tax -154.16 -55.71 -82.69 -78.05

Income After Tax -154.33 -55.74 -82.78 -78.16

Net Income -154.33 -55.74 -82.78 -78.16

Diluted Weighted Average Shares 50.72 7.02 6.65 3.44

Diluted EPS Excluding Extraordinary Items -3.04 -7.94 -12.46 -22.69

Dividends per Share 0 0 0 0

Diluted Normalized EPS -2.98 -7.81 -12.4 -22.54

Annex-II Stock Price History

Source: (Aulicino, Waratuke, Williams, & Elliott, n.d.).

Annex-III Financial Ratios vs Industry Averages

Source: (Aulicino, Waratuke, Williams, & Elliott, n.d.).

Annex-IV Tesla Panasonic

https://evobsession.com/wp-content/uploads/2013/07/Navigant-Research-Leaderboard-
Lithium-Ion-Batteries-for-Electric-Vehicle-Batteries.png
Tesla Motors – examples used in this article

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