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ENGI 9396
SPRING 2016
Innovation Management
Case analyzed by Mr. Chintan Rathod under the supervision of Mr. Daan Goossens
How Tesla is intellectually innovative?
Case analyzed by Chintan Rathod under the supervision of Mr. Daan Goossens
TABLE OF CONTENTS
5. Conclusion .......................................................................................................................................... 11
BIBLIOGRAPHY……………………………………………………………………………………….12
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ENGI 939 6 | Mem orial Un ive rsity of Newfoun dland
How Tesla is intellectually innovative?
Case analyzed by Chintan Rathod under the supervision of Mr. Daan Goossens
1 | ABOUT TESLA
Tesla Motors was founded in 2003 by a group of engineers in Silicon Valley who
wanted to prove that electric cars could be better than gasoline-powered cars.
As of July 2016, having 140,000 electronic vehicles (EV) on the road worldwide, Tesla
is preparing to deliver Model 3 (stylized as "☰") which is an affordable high class EV.
According to Tesla, they are not just an automaker, but also a technology and design
2 | ROADMAP OF TESLA
Tesla’s summarized strategy is…
3) Use that money to build an even more affordable car (Model 3 – design unveiled)
While doing above, also provide zero emission electric power generation options
It looks a simple strategy and so far, Tesla is doing really well. But, there were years of hard work behind
this success.
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ENGI 939 6 | Mem orial Un ive rsity of Newfoun dland
How Tesla is intellectually innovative?
Case analyzed by Chintan Rathod under the supervision of Mr. Daan Goossens
Affordability needs innovation, thus, Tesla has literally Image 1 Tesla’s patent wall at its headquarters
Image 1 shows patent awards in the name of Tesla. In June 2014, Elon Musk announced, that the
company will allow all its technology patents be used by anyone in good faith.
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ENGI 939 6 | Mem orial Un ive rsity of Newfoun dland
How Tesla is intellectually innovative?
Case analyzed by Chintan Rathod under the supervision of Mr. Daan Goossens
The electric vehicles (EVs) have long been under emerging stage. It has a history of more than 100 years,
with significant efforts in the early 20th century, followed by sequences of stops and starts and now new
enthusiasm in the last decade. The new enthusiasm comes with high oil prices, climate protection
policies, battery technology and recharging infrastructure development, and the rise of organized car
sharing and intermodality. EVs are believed to play an important part in the near future according to
policy makers, car companies and other stakeholders. Ambitious regional and national goals have
stimulated the progress of EV penetration by subsidizes for the vehicle and corresponding infrastructure
deployment. Meanwhile, most car manufacturers have added EVs in their portfolios and prepared to
make mass production with different level of strategies and expectations. However, commercialization
has been ineffective thus far, and dominant design is still dormant. Sales of EV are far from satisfaction
and lag behind from national goals. <Ref Chen and Perez, 2015>
Accordingly, there is a huge need of innovations in the EV industry. As per analysts, Innovation which
leads to economic viability of EV will take over the market. Tesla Motor, viewed as a black horse to the
auto industry, is obtaining a success as an OEM dedicated for EV, and changed people’s idea of EV as
well as re initiated the enthusiasm for pure EV. Tesla is rapidly covering the market with more than
Graphics below shows WHERE INNOVATION HELPED Tesla to grow tremendously in EV market.
Sale Asia
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ENGI 939 6 | Mem orial Un ive rsity of Newfoun dland
How Tesla is intellectually innovative?
Case analyzed by Chintan Rathod under the supervision of Mr. Daan Goossens
The company is filled with successful leaders from the top to hardworking engineers at the bottom.
Elon Musk CEO, Product Architect Space X, Solar City, Pay Pal
promotions.
120 of Tesla’s patents are related to battery and charging Image 2 Tesla’s Patent Infographics
technologies, and not surprisingly, this technology makes up
(note the signature panoramic roofs of the Model S), and user
interfaces/displays.
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ENGI 939 6 | Mem orial Un ive rsity of Newfoun dland
How Tesla is intellectually innovative?
Case analyzed by Chintan Rathod under the supervision of Mr. Daan Goossens
Here, I will discuss about some of Tesla’s leading innovation and how it propelled the company’s growth.
Chevy Volt 35
As shown in the
Nissan Leaf 73
graph 2, Tesla
highest battery
Tesla Roadster 245
capacity than any
Tesla Model S 300
other peer EVs.
0 50 100 150 200 250 300 350
As shown in graph
Graph 3 Battery Pack Cost ($) per kWh
3, battery pack
700 650
590 cost would go half
600
500 440 by 2020, that
400 320 means Tesla’s
300
dream of
200
100 affordable EV
0
would come true.
2010 2014 2018 2022
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ENGI 939 6 | Mem orial Un ive rsity of Newfoun dland
How Tesla is intellectually innovative?
Case analyzed by Chintan Rathod under the supervision of Mr. Daan Goossens
In the case of Tesla, Elon Musk set the bar high by combining what at the time seemed to be two
• High performance
• Environmental
stewardship
The second step was what has come to be known as the best car ever made – the Tesla Model S. What
was so revolutionary about the Model S is it inherited the performance and environmental stewardship of
But even with the Model S the appeal from the mass market was limited because of the steep $75,000
At $35,000 the Model 3 shows significant promise for being a dramatically successful innovation. The
At last,
I will compare Tesla’s analysis to other automakers and define, What Tesla is doing right in the EV
business?
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ENGI 939 6 | Mem orial Un ive rsity of Newfoun dland
How Tesla is intellectually innovative?
Case analyzed by Chintan Rathod under the supervision of Mr. Daan Goossens
Here, booked units of Tesla model 3 shows, the popularity and acceptability of Tesla as a brand.
Anyways, this number is nothing compared to the monthly global sales of auto giants like GM, Ford,
Toyota, Honda… But, all mentioned companies are mature in this business and they understand the
market really well. The competition in EV segment will be fruitful from a customer’s aspect. As for now, let
4.1 | DISCUSSION
Similarities Differences
transportation)
• No dealerships
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ENGI 939 6 | Mem orial Un ive rsity of Newfoun dland
How Tesla is intellectually innovative?
Case analyzed by Chintan Rathod under the supervision of Mr. Daan Goossens
Clearly, EV market is high risk, new and immature. There is limited competition and high rewards.
Still, as discussed the company who will “INVEST TO INNOVATE” will win the game.
Tesla is a good example of this and as of now, it is leading the market with unprecedented growth.
According to me, as I understood from the course, these parameters would be really important:
o Management of innovation
o Rewarding innovators
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ENGI 939 6 | Mem orial Un ive rsity of Newfoun dland
How Tesla is intellectually innovative?
Case analyzed by Chintan Rathod under the supervision of Mr. Daan Goossens
5 | CONCLUSION
Based on the data analyzed for this study, following conclusion can be drawn:
Initially, the strategy of Tesla Motors is to apply product innovation by designing innovative vehicles and
process innovation by combining multiple know-hows deriving from different companies. Therefore,
In addition, Tesla applies open innovation and its coupled process by establishing R&D collaborations
with major companies. That way, it manages to further develop its innovative technologies. Therefore, it
Tesla shows a very high level of integration of information technology into many aspects of EV business.
This helped Tesla to grow more as an IT spin-off but an automobile player. Therefore, The Tesla story is
one of singular bold vision of innovation and out-of-box thinking to ensure it stays a lap ahead of
the competition.
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ENGI 939 6 | Mem orial Un ive rsity of Newfoun dland
How Tesla is intellectually innovative?
Case analyzed by Chintan Rathod under the supervision of Mr. Daan Goossens
BIBLIOGRAPHY
1. Amit, R., & Zott, C. (2001). Value creation in e-business. Strategic Management Journal, 22(6-
7), 493–520
2. Bohnsack, R., Pinkse, J., & Kolk, A. (2014). Business models for sustainable technologies:
Exploring business model evolution in the case of electric vehicles. Research Policy, 43(2),
284–300
3. Dijk, M., Orsato, R. J., & Kemp, R. (2013). The emergence of an electric mobility trajectory.
4. Kley, F., Lerch, C., & Dallinger, D. (2011). New business models for electric cars—A holistic
5. Weiller, C., & Neely, a. (2014). Using electric vehicles for energy services: Industry
6. Tesla Motors: A Silicon Valley version of the automotive business model, Capegemini
Consulting
7. Tesla Motors: intellectual property, open innovation and the carbon crisis
9. Business model design: lessons learned from tesla motors, chen and perez
THANKS! J
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ENGI 939 6 | Mem orial Un ive rsity of Newfoun dland